Why breaking out of network contracts is a powerful experience
Stop for a second and consider how the phone in your pocket is able to communicate with others and allows messages, calls and all sorts of multimedia to flow between you and the rest of the world. The SIM card inside your phone is registered with a company that owns a computer network, or leases use of one from a larger company, and every external communication from your phone sends data across that network. It is this company that inevitably tells you what types of information and how much of it you are allowed to consume. Most importantly they tell you what price they expect in return for the service.
These major network providers are now household names in many countries and the gateway for us to utilise our mobile devices. Their prices however are a remnant of when the technology we now take for granted was almost science fiction to many of us. Creating, maintaining and adapting these networks to new technologies is an expensive business; one that I agree we should pay to access for. With scrutiny though, it seems that we don’t always receive a fair balance for what we pay for. The major reason for this, I believe, is the subsidised phone. A major source of income for a network provider is to charge far more for a contract than its worth, by offsetting the price in providing the consumer with a free or reduced price handset. This business model is key to the meteoric rise of many network providers, however it could soon be about to change.
Many of us are locked into long term contracts that charge between about £30 to £50 per month (perform your own non UK assessment – 80 US dollars is not uncommon by any means) that we signed up to primarily because we wanted, or were ‘eligible for’, a new phone. By looking around you may find that these agreements are much more expensive than ‘rolling’, or more simply ‘month-by-month’, counterparts offered by the same company or others. Look again at the actual cost of the phone in your hands and you may realise how much extra the network provider is making from you over the time of your contract compared to how much they really need for accessing their services.
By providing a device and therefore the means to access their network, the major providers have a huge amount of control. Due to the huge amount of customers they have, deals are often made between network providers and device manufacturers for exclusivity in a territory, regularity of updates, and in recent times how the device in your hands actually performs compared to the original factory specifications. For instance a whole device, particular colours, or models with more memory or power can only be sought from them. Much of this is in detriment to the consumer as either their choice of device is removed or when they can receive updates designed by the manufacturer is then in the control of the network provider.
Much of this can be removed by purchasing a SIM free device and then obtaining an agreement from a SIM free provider. By purchasing a SIM free device directly from the manufacturer or from a registered reseller, you have all the choice given back to you. A SIM free device can be used with any network provider in your territory and so you can then decide exactly how much you want to pay for the services that you want by shopping around both the major and smaller providers available.
Personally, I have been involved with a UK provider for some time, averaging somewhere about £30 p/m. I signed many years ago and have consistently upgraded to a new device when allowed. I have though, in recent times, realised just how little my money was getting me when compared to SIM free options. My contract is near its end and I have just bought a new SIM free device, so when my contract does end, I will either ask for a much lower price or move to another provider that offers more for less. Doing the maths involved has shown that over the 18 months of a new contract I would have paid around £400 more (a little bit more than the cost of the ‘subsidised’ phone) had I ‘upgraded’ through them. Multiply that by the many hundreds of thousands of contract customers they have in the UK and the excess profit is clear. Add to that the fact that the device from them would have been restricted in its capabilities and the choice seems obvious.
In short, there are many advantages to buying SIM free (see our post here if you want a more detailed explanation of what SIM free means). First of all is that you can have the choice of all your available network providers. Second, you can tailor the cost of mobile access to what you need. Then you can have total control of the device in your hands because you don’t need network approved updates. Finally, you have the complete ability to change your situation whenever you like. If a competitor provides a better network offer then you can go straight to them or hassle yours to match. If you want to adapt your device with software that the manufacturer says is OK but the network provider doesn’t then it’s your prerogative. Going SIM free puts all the power back with you.