SIM-only deals do the business

We still call them mobile phones, but in reality what we carry around today is a lot more than that. The average smartphone has taken out a lot of technology, from sat-navs, through alarms and timers to small digital cameras. That’s made them essential kit, but the pricing structure’s become complex, and as with a lot of things, inertia and misplaced loyalty to a provider comes at a heavy price.

Phone bills have two elements – the price of the phone and calls and data. You effectively pay off the phone over the term of the contract – now normally two years.

The degree to which phones are subsidised has been reduced, but the industry’s still built around getting a free or nominally priced phone and then changing it after two years. If you keep your phone beyond the contract term you’re effectively paying for a phone you’ve already bought. While they might offer an upgrade, phone providers aren’t in the business of pointing out that you’re paying too much. If you’re in this situation the best option is a SIM-only deal, where you’re only paying for calls and data. These are normally between £10 and £15 a month, and you can operate on a pay as you go or monthly basis. For £15 you can get unlimited calls within the UK and four gigabytes (Gb) of data – which is well above the 0.5Gb the average person uses.

Deals such as unlimited calls and texts have to be seen in context. We rarely make full use of these against a set amount of 500 or even fewer minutes, while texts have been superseded by free applications that use data.

A problem for people in rural areas is that monthly contract prices have been driven up because 4G, as opposed to 3G, is now the norm. Contracts are based around bigger data bundles – typically 2Gb or 4Gb, and that’s driven up contract prices. Typically these will now be more than twice the cost of SIM-only deals. This is fine if you can get 4G coverage and want to watch live television or stream movies on your phone, but in most rural areas you’ll be paying for this but unable to use it.

This makes it important to check when your contract expires. Talk to your provider and see what they’ll offer. If you want a new phone, think of getting an older model rather than the latest one full of features most of us don’t need and never use. If, for example, you’re thinking iPhone, the 6 commands a premium but the equally effective 5 will be a lot cheaper on a contract.

It’s not possible now to get data without buying a 4G package, and this is why so many are opting for SIM-only deals. If you do this it’s generally a rolling contract, so if something happens to your phone or you want to upgrade you simply take out a new contract. There are lots of online offers for SIM-only deals, but your phone, if it came on contract, will be tied to that provider. If you want to use another provider you’ll have to pay to have the phone ‘broken’ of that link. This is cheap and readily available, and once done you have independence about provider. You can transfer your number, by asking your provider for a PAC code which they must supply within two hours, and which you give to the new provider.

There are plenty of comparison sites where you can check prices, based on your phone bill. All providers will try to keep business, so if you find a better deal, contact them on the basis of seeking a PAC code to leave and insist they generate it. Then be open to financial persuasion to stay, and in most cases you’ll find a better deal can be secured, if you want to stay on contract. However, it’s worth trying the SIM-only option for a few months, even telling your provider to put you onto one, if you don’t want the latest phone and are happy with what you have.

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