Mobile Phone Contracts Vs. SIM Only Contracts

Mobile phones have become a necessity that most of us wouldn’t dream of doing without. Many people take it for granted that a mobile phone and contract go hand in hand but this need not necessarily be the case. Thankfully with SIM only contracts it is possible to get better value for money than what is offered on either pay as you go or a pay monthly mobile phone tariffs.

Most people know that mobile phone contracts offer better value for money than Pay as you Go but when it comes to choosing a mobile phone on contract there is so much to take into account. Contract length, quantities of minutes, text, data, the monthly cost, upfront cost, the specific handset value as well as any extras that get thrown in to sweeten the deal all make choosing the right contract a mine field.

The truth of the matter is that many of us make an ill-informed decision when buying handsets because we don’t actually know how much we are being charged for the handset and how much we are paying for the service provided by the network. This vagueness is a deliberate ploy by mobile phone networks.

Contrary to common belief, you never get a mobile phone free with a mobile phone contract because you actually always pay for the device within your monthly payment over the duration of your contract. The actual price of a handset purchased with a contract is rarely a very competitive one. If you shopped round for the same phone on Amazon or Clove, you might be able to get it a lot cheaper. With this in mind it makes more sense to buy your phone outright.

It can be very difficult to distinguish what portion of your monthly payment corresponds to the handset cost versus your contracted mobile usage allowance. Just to give you an idea, let’s take a look at one example. Below you will see a comparison chart which pits Vodafone’s best selling Samsung Galaxy S3 against the same networks equivalent SIM only deal.

Minutes Texts Data Length Cost
Galaxy S3 Unlimited Unlimited 2 GB 12 Months £52 p/m +

£59 up front

SIM Only Unlimited Unlimited 2 GB + 750MB BT Open Zone 12 Months £26 p/m

Over £12 months you would pay £371 for you’re the galaxy S3. If you shopped around for the galaxy s3 you could buy it outright for just £310. This is a saving of £61. The figure of £310 was quoted from a retailer on Google shopping.

Independent retailers such as Clove provide unlocked handsets as standard. Unlocking is a service that networks charge an additional £15 fee for. So not only can you save money shopping around for the best price handset, but since if its unlocked it means you have the freedom to change network provider more easily and without any added expense.

For maximum monetary benefit, mobile phones and mobile phone service contracts should always be purchased separately because it gives you, as a customer, the power to shop around separately for each component resulting in more bang for your buck and more freedom to change network or handset.

SIM only offers you a way of having the contract that is perfect for your needs coupled with your choice of mobile network providers – no strings attached. With 30 day rolling SIM only contracts you are free to change your mind about your provider or change your tariff, all with just 30 days notice.

Getting a great value SIM only deal couldn’t be easier. Just as with buying a handset, the key is to shop around for the best deal. However, shopping around for a SIM only contract couldn’t be easier. With dedicated SIM card comparison sites such as Comparisim. You need only visit a single website to compare all UK SIM only deals across all major network providers. Simply input your requirements into their comparison engine and in seconds you get a shortlist of all deals matching your criteria.

To sum things up, always buy your contract separately to your phone. Shop around for both and make it easy on your self and always use comparison sites to find SIM only contract deals. If you find yourself over spending on your SIM only contract you can simply upgrade or downgrade your deal. If you find a better deal on an alternative network and you are on a 30 rolling SIM only deal then consider switching networks or changing over to a 12 month deal on the same network as they typically offer better value. Always buy unlocked phones to make changing easier as network representatives can sometimes put up resistance when you ask them to unlock your phone, especially if they think you are leaving.

This is post comes courtesy of Fion McCormack, a mobile news technology writer. Based in the UK, Fion has a strong background in telecommunications. He has worked closely with some of the UK’s biggest mobile telecoms networks and has written for a wide variety of tech news sites. If you found this article of interest join on Google plus.

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Comments

  1. Mike Paterson says:

    With Contract deals add to the fact:-
    1. You are at the mercy of when the carrier pushes out Android OS updates.
    SIM only are raw ROM files direct from the manufacturer released straight away with no additional time wait from a carrier.
    2. You get carrier added software and other needless files wasting space and battery performance.
    SIM only has nothing but Android and the manufacturer’s branding.
    3. You are tied with the same phone for the period of the contract.
    With SIM only you can change the handset whenever you feel the need. Heck you could even have several phones and change your SIM only card as and when the fancy takes you.

    SIM only for me and that will never change
    Mike

  2. Bugblatter says:

    Also you get tied into a contract for up to 24 months and the operator can increase their charges and you’re still stuck in the contract.

    Have to say I doubt that £310 price for an unused S3 though; I looked the other day to make a point elsewhere and the cheapest I found (excepting ebay) was around £375.

  3. Hrmm, not convinced. First off, that £310 price is not right. Some dodgy seller on Google Shopping or any other site is not a great suggestion to your readers IMHO.

    So, take £380 as a much fairer price and there is nothing in it, in fact, if you lay all the money out up front, you lose interest on your money, (or a lot of people will put it on a credit card at high rates).

    An S3 on Affordable Mobiles is £26 a month for 24 months, and that is with a “proper” Contract deal, Three AYCE data loads of mins and SMS AND tethering included, so, is the same price as the Vodafone SIM only deal, BUT you get a completely FREE S3 and a much better contract…..

    Poor article IMV :-(

    Kev

  4. Some good points in both comments above. An example of what Bugblatter is referring to is Vodafone recently increasing customer payments on what were originally sold as fixed price contracts!

    With regard to the price of the S3, you’re right. I have had another look to double check where I saw that price I mentioned in the article and I can’t find it anywhere now. Best price I can see now on Google shopping is £353 …and that’s from shopfotoaglow.com a Hong Kong based store which I personally wouldn’t trust. I guess the price we pay for the handset over the duration of the contract is negligible and it’s really all the other factors that make SIM a better choice.

    • Well, I think in comparison posts, you should simply use Amazon price (or, given the site its on, ahem, maybe Clove, but your argument would be dead as its £430)

      I think your OP was too simplistic, there is not a clear winner for SIM Only vs Contract, in some cases one is better, in others, the opposite may be true.

      For example, I challenge you to say my deal I just got is not a good one, and far better than any Sim Free plus SIMO deal would be?

      http://www.techtalkuk.com/2012/12/22/cheap-contract-and-note-2-deal/

    • Bugblatter says:

      Bear in mind the import duty, which I think is 20%. Plus the carrier will charge an additional fee for the hassle of collecting the duty payment from you, and that can be £10-20.

      Generally it’s only worth importing if you can’t actually get it in this country.

  5. Shaun McGill says:

    I think a few more examples would be useful here because there are multiple price points for contracts and the ones chosen here are somewhat extreme. I believe that buying a phone SIM free would make sense for many people, and likely be cheaper, but I agree with Bug. An S III for £310? Not even close.

    • Mike Paterson says:

      Yes but it’s not just about price.
      As I mentioned above there are other factors to consider which often are overlooked.

      Mike

      • Don’t agree Mike.

        1. Take a look at my example with the Note 2, and any other Android phone from people like Affordable (and others), they supply *exactly* the same Sim Free handset as do Amazon, Clove and others. All they do is buy unlocked stock and add a contract, using income from that to make handset free (or cheap).

        2. As I say, same handset, no junk added. The Note 2 I got in exactly the same as others I have had from Amazon.

        3. Absolutely not. I bought the Note 2 on Xmas Eve, and its for sale already (£390 if interested :-). When I take £390 and £40 cashback from Topcashback into account, I have effectively got a SIM Only for next 24 months for £14.08 a month, WAY less than the Three SIMO price of £25

        Sorry, but with a little research, contract can be a far better option than SIm Only.

        • Mike Paterson says:

          You and a certain percentage are probably the exception to the rule Kev….
          Most on a contract and not SIM Free will purchase their phones with all the carrier lock-ins. They do not look into what can be obtained or afforded by purchasing it on contract but unlocked.
          It is this group I am referring to.

          Mike

          • But, the point is, me and that certain percentage are most likely the only ones reading this?

          • Mike Paterson says:

            “kevwright (@kevwright)
            on January 6, 2013 at 2:28 pm said:
            But, the point is, me and that certain percentage are most likely the only ones reading this?”

            That means nothing….. and to be frank a little condescending.
            The debate is about the community as a whole not just you and the few reading this.

            Mike

        • Mentioning Top Cashback is sort of off topic here because the same cashback site who you say gives you £40 back on your Note 2 will also give you cashback on a SIM only deals (£10 – £15). Personally I wouldnt go for cashback sites with regard to anything that costs less than £500 because they are more hassle than they are worth. But that’s just me.

          • Mike: What I mean is, the general public who you say this is aimed at, will not be reading the Clove Blog at all will they?

            Fion:
            Never had any trouble with cashback sites myself. Am close to £1000 with TCB and over £2000 with Quidco. Bottom line is, if you get it fine, and if you don’t, nothing lost.

            Just paid £10 for a 3 broadband SIM and got £13.17 cashback.

  6. Hrmm, is it just me, or has “awaiting moderation” just been activated for this thread? Am fairly sure it was not on for original comments?

  7. So, just for clarity Fion, do you get a commission from every SIM sold via Comparisim website?

  8. Graham Elder says:

    There was a similar post a couple of weeks ago, where I pointed out there wasn’t really a saving to made between SIM-only and contract. I wish there was, but even switching down to a Talkmobile £7.50 sim is £180 over two years. My Tmobile contract has similar m/t/d to the 7.50 sim and costs me £20/m with a Moto Razr I or £480/2yr – so I’d need to find an unlocked Razr I £300. And then add on the fact that my broadband is also with tmobile/orange and I save £5/m (£120/2yr) for having the mobile.

    I understand the hate of 24m contracts, delayed updated, bloatware – but its not accurate to say its cheaper – the providers will make their money either way.

    • Bugblatter says:

      In most cases you do pay extra for the phone, especially with the latest and greatest.

      We had this discussion a coupld of months ago on Shaun’s site: http://www.lostinmobile.com/home/network-logos.html

      My biggest problem with it all is that it’s not transparent. You have to do a fair bit of digging and maths for each and every combination. If you’re looking at half a dozen deals from each of, say, four carriers then that’s a lot of work that most people won’t put in.

      I think the contract and SIM-free contracts need to be directly comparable and the contract price should state explicitly what the effective cost of the phone is. In every other type of hire/purchase deal I can think of you know exactly what interest you’re being charged.

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