Customers of M1's new Take3 programme, which was launched on Friday, will have to sign up for a 24-month post-paid mobile plan priced from $19 to $201 a month.

They can then pick a phone to use for the period, with higher-priced plans for higher-end handsets. Models available include the popular Nokia N71 and the premium LGKF900 Prada II phone that go for over $1,000.

Customers can turn in their borrowed handsets after 20 months to get a new loan.

'Singaporeans love their mobile phones and are always on the lookout for great phone deals,' said M1 acting chief executive Karen Kooi in a statement announcing the new service.

The new service, she added, gives customers 'the flexibility that is not currently available in the market'.

'They can now choose not to purchase any handset but yet have the privilege of using any of the latest handset models,' she said.

Users will also be able to switch to a different handset after nine months of signing up for their plans, but will have to pay a one-time administrative fee to do so. The Straits Times understands that those who lose or damage the loaned handsets will also have to pay for them.

Although profitable, M1, Singapore's smallest telco, has been bleeding in the post-paid market share to incumbent SingTel since June, when mobile number portability was introduced, and has been under pressure to catch up.

NSman Gerald Lim said the service was 'a good idea'.

'You can't get a good price for selling or trading in an old handphone today, so I may as well loan one and not have to worry about what to do with it afterwards,' he said.