Sunday, 30 December 2012

Mobile phone buyers UK - Read this before you buy - 1

Getting your mobile phone

There are three main ways to buy a mobile phone in the UK. Many people get their phone on a contract, as part of which the handset is usually free or heavily subsidised by the network operator. The contract means they have to pay a set fee every month.
Alternatively, you can choose to purchase a phone on a pay as you go deal. You tend to have to pay the full cost of the phone up front, and then buy top-ups to use the operator's network. These top-ups include a set number of call minutes, text messages or megabytes of data downloads.
Finally, some people purchase their phone outright as a SIM-free device. This means it's not tied into a network, and the user is free to put any operator's SIM in the phone.
The biggest decision for many people will be whether to opt for a pay as you go deal or sign up for a contract. Both options have plus and minus points, so let's look at them in more detail.

Contract deals

On a contract, you enter into an agreement with a mobile operator to pay a fixed amount every month over the duration of the contract, which usually lasts between 12 and 24 months. In return, you get a fixed amount of call minutes, text messages and data allowance that you can use each month.
You also usually get either a free handset or a substantial discount on the full cost of a phone. As a rough guide, if you spend over £10 per month on mobile calls, data and text, then you'll get better value from a contract than a pay as you go deal.
That said, there are a number of things to be aware of when choosing a contract. For example, mobile-phone companies want to retain their customers for as long as possible, so often they offer incentives for you to sign up to longer contracts.
Typically, you can save between £5 and £10 per month by opting for an 18-month or 24-month contract, rather than a shorter 12-month contract. But 24 months is a long time in the world of mobile phones and prices can change rapidly, so what seemed like a great deal at the start of your contract can look very overpriced towards the end of it.
Also, the price of your contract won't just depend on the number of minutes, texts and megabytes of data included in your monthly allowance. It'll also be greatly influenced by the handset that you choose as part of the deal.
There's a big difference between the price of an entry-level feature phone and a top-end handset like the iPhone 4 or Samsung Galaxy S2. The former will cost around £60, while the latter two are nearer the £500 mark. As a result, if you opt for a higher-end phone, you can expect to pay a higher monthly fee or receive a less generous calls and text package for your money.
Remember that you can also contribute towards the cost of your phone in a one-off payment in exchange for a lower monthly bill. In fact, you will usually end up paying far more for a free phone over the course of a 24-month contract than you would if you paid more cash up front and went for a lower monthly bill.
If your budget is tight, you may need to lower your expectations as to which handset you can get for free with your contract. Probably the best way to approach the issue is to first decide roughly how much you want to spend per month, and then shop around to find the best compromise between the quality of the handset and the call and data allowance included in the contract.
Whether you're upgrading or joining a new network, you can often get a better deal, with more minutes or texts, just by asking. So get some snacks and ring up prepared to do battle. If you have a good offer from a network but it doesn't have the phone you want, try to get another network that does stock your desired phone to match the offer.
If you can't be bothered to waste time negotiating, try using an online comparison service such as BillMonitor to trawl through the myriad deals available. BillMonitor can even analyse your existing online bills and recommend the best deals for you.

SIM-only deals

If you're happy with your current mobile phone and are about to come to the end of your contract, it might be worth investigating SIM-only deals.
Pretty much all standard contracts include costs associated with subsidising the price of your new handset. Essentially, it's like paying off a loan, except the loan costs are bundled into your monthly contract fee.
If you opt for a SIM-only deal, you're essentially stripping out this loan cost, as you'll be using your existing handset or choosing to buy a SIM-free phone yourself, rather than using one that your operator provides.
Note that buying a SIM-free phone and then signing up to a SIM-only deal will often prove cheaper in the long term than signing up to a contract.
All the major networks now offer SIM-only deals, with prices starting as low as £10 per month. If you're willing to keep your existing mobile, SIM-only deals can be a great way to cut down on your mobile-phone bills, especially as many of these deals only tie you in for one month. Note, though, that the best rates are usually offered on 12-month contracts.

Pay as you go deals

If you don't use your mobile all that often, or just want to be able to tightly regulate how much you're spending, then opting for a pay as you go deal may be the best choice for you.
On pay as you go, you usually buy your phone up front and then purchase call minutes in set blocks, usually referred to as 'top-ups'. Essentially, you pay for calls before you make them by putting money into your mobile phone account. Once you reach the limit of your account, you can't make any more calls or send any more text messages until you top up the account again.
You can buy top-ups from a range of places, including local shops and cash machines. Alternatively, you can buy them online or over the phone from your operator.
Call charges and data bundles are usually more expensive for pay as you go users than they are for those with contracts, so, if you spend more than £10 per month, you're likely to be better off opting for a contract deal.

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