Well i didn't know this, since May 2011.
http://somobile.uk.com/news/2011/01/...acts-from-may/

I'm not sure it will make a massive difference.

12 month contracts will give a minimal subsidy once you get to top end smartphone prices, and those who like changing their phone probably already just buy them SIM-free and then get a 30 day or 12 month SIM only contract anyway.

Some people like 24 month contracts because it means the latest shiny iPhone or hot Android phone is "free". Even if they're paying £35 a month for a ton of minutes/texts/data they'll never use.

Handset leasing is the future for our telecoms market anyhow... look at the phones4u product they sell now...24month contract but you can change your phone whenever you want.

The most cost-effective way forward is just to outright buy the device you want when you want it, and just have a cheap sim-only deal that you plonk from device to device as and when you get a new one. No more fixed contracts for me.

By sim-only deal, do you mean a pay as you go?

You can get 12 month or rolling sim only contracts, you don't get a free phone but you get a better deal on minutes/texts/Internet than pay as you go.

Not everyone has the cash outright though and don't mind spreading the cost.

Edit: redoing maths

This is what I do, although occasionally deals do beat this, particularly if you are willing to mess around with cashback deals or buy from the network that happens to have the deal on when you see something on hotukdeals etc, rather than the network you'd prefer.

Buying outright and then getting a sim only deal gives you a load of flexibility too.

* - An unlocked handset - use other sim cards if you want to, get updates faster than the network firmware.

* - 30 day contract means you can change plans or have the freedom to move when you want

* - Upgrade when you want or keep the phone for longer and save money on paying expensive contracts if you decide to keep the phone longer

* - Sell the phone when you want and upgrade, putting the cost of the sale towards your new handset, you can't do this if you are still paying a contract on the phone

There are more, but those are the main reasons I buy this way, although you do need to have £400 up front, but you would be paying the same or more over the next 24 months anyway, it's just if you have the money up front.

Always save and pay up front for things if you can, I save money on my car insurance by doing that, money on my car tax by buying a year instead of 6 months, and lots of other things. You save money all over the place by saving money to buy things first.

It also means that if you lose your job or fall on hard times that you don't have big £40 a month commitments just for a phone, only £10 a month, and your tax and car insurance is paid for a year, and all the other things.

I just think it's a better way of doing things in my opinion, taking a phone on a 2 year contract is just like taking a loan out or HP on something, it's best not to if you can pay for it outright why not.

Not everyone has the cash outright though and don't mind spreading the cost.

Not sure is always true anyway, if you shop around for the cashback deals..

I got the original Galaxy S when it was not long out, £27 a month for 24 months = £648 minus £150 in cashback I got, my total outlay for the phone and 2 years supply being £498.

Had I bought the phone outright (£400?) and paid for 2 years worth sim only contract (say £10 a month) would of cost me well over £600 in total.

Even without the cashback it works out around the same as buying the device outright + sim only.

Can't really say mobile phone companies are ripping people off with 24 month contracts, in some cases you can get a better deal that way by committing to one network.

The 24 month maximum contract length is good- otherwise we will soon see 36 month ones.......

I don't see contract phones as bad if you're after a new handset and don't mind things like cashback, it worked out cheaper for me. I'm going to sim only though as my phone is fine and don't want to upgrade. I would consider a contract phone again when I want/need a new phone and can find a deal that works out cheaper than buying outright...bit of a no brainer.

Personally i will always look to see what ends up cheaper, and i'll go for that. I put a bit down on my wife and my iphones when we got them. But i didn't do it for a cheaper monthly, i did it for a cheaper overall cost.

The only thing stopping me going for a sim only though, is that i want it on three (for the excellent 3g coverage) with an unlimited data plan. I cant find a sim on three thats cheaper than a contract anyway if you use lots of data.

It's more like interest-free credit really.


That strikes me as being completely backwards to be honest.
If you can spread the cost out over a longer period at no penalty, then why would handing over more money up-front possibly be a better solution?

Why owe money if you don't have to even if it is interest free? Should you lose your job or have some unforseen circumstances like illness I'll be in the brilliant situation of only having low outgoings per month, whilst others who are in debt up to their eyeballs will be struggling with all sorts of things.

People stuggle every month because of all the silly things they do, here's some examples.

Paying car tax every 6 months instead of 12 - you are paying a more to do this.

Paying insurance every month instead of once a year, normally 5% on top.

Extra insurances on small things like appliances or phones, usually they are paying over the top in the long run.

Paying for premium bank accounts, but never really taking advantage of the benefits or even pricing up whether what they are getting is worth £180 a year, breakdown insurance is £40, holiday cheap, but people still buy these premium accounts which are not often the best deal.

Buying phone contracts where you are committed to 2 years, it really can be cheaper to go sim free. 2 years at just £25, which would be a dirt cheap contract is £600, I only pay £10 per month sim free, which is £120 + whatever phone I buy.

I could give you a list as long as your arm and you could save £100's and put it towards holidays, buying phones outright and you're in so much of a better place then rather than being tied into expensive multi year contracts on everything, which means if your situation changes you aren't in a big mess.

It's just not a nice situation to owe thousands of pounds to various people, money you can't afford to immediately pay back if you needed to, you're relying on the hope of future continued work, health and income to be able to pay it back. I just think we all take credit far too lightly these days and sim free contracts are usually slightly cheaper, although not always, but with the flexibility I mentioned in my last post, i.e change provider, upgrade when you want, get software updates quicker, etc etc.

But if it were interest free and you didn't spend everything every month, then you would still have the remaining amount of the loan in the bank available to pay your monthly instalments.

I'm mostly with you tbh Thine Wonk, but unfortunately its very difficult to even get a mortgage if you like me who "had" never had a credit card or loan of ANY form before buying my house.

Its crazy but having debt means you can pay it back, which banks favour more than having never owed a penny.

I specifically said 'If you can spread the cost out over a longer period at no penalty' and these two examples clearly do result in the customer being penalised for spreading the cost, so whatever point you were trying to make hasn't really worked.

As for the other things like the bank account, that's just such a completely different situation that it has no bearing on the discussion at hand.
Yes, of course paying for something and not using it is a waste of money but that's not what we're talking about here.


It can be, no-one's disputing that - that doesn't mean it's automatically cheaper though.

You pay £10/month, so do I but I get a subsidised handset every 2 years.
Even if I choose to sell that handset and buy a new one partway through my contract, I wouldn't've paid full price for the first handset so I'd still be ahead.



Anyway, all of this completely misses the point.

If the total cost of ownership across the term of the contract is the same as buying the handset outright and taking a SIM-only for the same period then people taking the handset on contract are no worse off than those buying it up-front - in fact initially they're arguably better off because they haven't had a large outlay at the start, they still have that money at their disposal.
Yes they're tied in for a period of time but that's hardly the end of the world.

Thine Wonk, i think i'm going to hire you as my personal financial advisor! Could do with some help! Lol.


Is that really true?

Yep. It means no credit history which isn't good.

Someone posted this deal in the "Contract plan similar to giffgaff £10" thread.

Works out at £5.74/month over 12 months for 200 mins, 5000 texts, unlimited data. It's on Three too.

I might go for this deal myself if i ever decide i need data.

I think it depends on the circumstances/deal at the time, take my choice for example last May. My contract was up and I wanted one of the new Sony Xperia P mobiles as it suited my needs so I compared going sim free + sim only deal and getting one on a 24 month contract and the contract proved the cheaper option.

Sony Xperia P Sim Free £330
30 Day Sim £10 pm (were cheaper but no data) so £240 over 24 months
Total cost = £570 over 24 months

Sony Xperia P on a 24 month contract @ £20.50pm = £492 over 24 months

I went through a 3rd party dealer rather than the network so also got £30 cashback from quidco and the phone is sim free unlocked with no network branding so get manufacturer updates, it's costing me £462 over the 24 months which is a saving of £108 over buying sim free + sim only.

To buy the mobile sim free with a sim only deal for the same overall cost as buying on contract, would have mean't I needed a sim only deal for £5.50pm that offered 100 anytime mins, unlimited texts, 500Mb data per month + I also get Sky Sports free to watch on the mobile and there wasn't one of those - yes I'm tied into 24 months but I save £108 and get extras.

I have just finished a 12 month contract and took out a 2 year deal. This will cost me £1.67 a month after sellng the Lumia 710 and getting the £50 Quidco. For this I get 250 minutes and 5000 texts and 500 mb on Talk Mobile which suites my usage.

I like to change my phones, 8 in 2 years, but the thing is to never go for the latest model. My GNexus, SE Arc and X10, GNote all were bought a few months after release for much less than the initial price. You pay to be first!

It is more a price maintenance mechanism.

People pay £800 over two years for a contract when in fact they might be able to make do with £200 PAYG over two years.

How many would stump up £600, even if they had it?

this is why i like the thing Phones4U are doing, you get a 24month contract but its at a SIMO pricepoint, then you get the handset on a separate agreement so you can pay it off over time and upgrade whenever you want.

http://support.phones4u.co.uk/pe/act...nt?id=10205676

Which deal is this please - is it on a particular network?

Its JUMP.