Is offering a 4-month "deposit" a smart idea for new iPhone contracts?

I have to say I was very surprised to see Orange offering a “deposit” for iPhone contract purchases. What is the point? I’ve not seen this approach anywhere else. I suppose it bridges the ‘free’ gap. Huge chunks of the UK customer base still demand free phones — so a 4-month refundable deposit could be a nice way of getting around this.

Still, if it helps encourage people upgrade from feature phones to smartphones, good news.