Save £270 On Your Mobile Phone Bill!

By Szu Ping Chan | 20 March 2008

| 17 Comments

My life is full of dilemmas.

A few months ago I was faced with yet another predicament. When renewing my mobile phone contract, I was forced to choose. Do I get a new mobile phone or take a loyalty discount?

Ok, triviality may be my specialty, but these days if you want the latest phones then you'll almost certainly have to sign an 18- or 24-month contract. And if you're upgrading, then the options may be much less appealing.

In the end, I opted for the discount. Although I love my gadgets, there were no phones which appealed to me, and I thought I'd be better off with £10 off my phone bill each month.

However, I should point out the pitfalls of choosing a so called ‘loyalty discount'. One of my friends recently discovered that her discount expired after a year, and after 12 months her bill reverted back to her old rate.

Not so loyal after all.

So, as the consumer is once again squeezed by the mobile phone companies, is there a cheaper alternative?

No Frills Phone Calls

Another option slowly becoming mainstream in the mobile phone market are SIM-only contracts.

Ideal for people who don't mind keeping their old mobile phone, they work on a simple principle. You usually get a new SIM from your mobile phone provider, pop it in your phone, and are free to make calls as normal.

The beauty of SIM-only contracts is that you get many more minutes than you would do on an ordinary monthly contract, or on Pay As You Go (PAYG) without being tied to a lengthy deal. With a SIM-only contract, you never have to sign up for more than 30 days.

As well as people who aren't gadget conscious, SIM-only contracts may be beneficial for students who are on a course which takes them abroad for a year or more, and don't want to be tied to a contract while they're away. Also, anyone who is more than just the occasional user but wants to get the best value out of their deal.

In addition, contrary to popular belief, if you switch to SIM-only, you can keep your old phone number.

If you are currently with a different network to the one you wish to switch to, all you have to do is request a Porting Authorisation Code (PAC) from your old provider and the switch will be made for you. If you're on the same network, simply tell your current provider to transfer you over.

Bear in mind that if you're currently on a contract you will need to be outside your contract period or be eligible to upgrade to qualify.

Here's a quick look at the SIM only deals currently available on the market:

*I conducted my research on 14th March. Prices and plans may have changed since. **O2 customers can get double texts if they sign up to a Simplicity tariff online (apart from Online 30 where you get 1200 minutes and 1000 texts).

As you can see the range of deals vary, depending on what you're looking for. In general though, you can get a lot more value for opting for a SIM-only deal.

For example, if you want a new mobile phone and opt for Orange's Dolphin £25 tariff on an 18 month contract, you'd only get 100 minutes and 300 free texts for your £25 a month, compared to 700 minutes and unlimited texts with the SIM-only option.

If, on the other hand, you wanted a traditional contract with a similar amount of minutes as the SIM-only deal, then you'd have to opt for Dolphin 40, which gives you 750 minutes and unlimited texts. But it costs you £40 a month. That's a whopping £180 more than the SIM-only deal every year -  or £270 over the 18 month term that you're committed to (though if you sign up online you get £5 off your monthly bill).

It all adds up, doesn't it?

Not So SIMple Deals?

However, while SIM only deals have their appeal, there are also some things you should consider before taking one out.

Firstly, sometimes the charges outside your contract can be quite high. For example, T-Mobile charges 30p per minute for every call made outside your call allowance, whereas you'd only pay 20p per minute if you were on a Flext call plan. So if you are going to opt for SIM-only, make sure you know how many minutes you are going to use.

In addition, although SIM-only contracts require you only to have a 30 day commitment, until you cancel your contract, you will be obliged to pay at least the minimum subscription fee, which can be anything from £15 each month.

For this reason, infrequent users may be better off just sticking with PAYG.

In fact, you shouldn't knock PAYG altogether, as there are some good add-ons at for these customers.

For example, Orange PAYG customers can enjoy 300 free texts if they top up by £10 a month. With call charges at 15p per minute, that works out as just over an hour's calls and 300 texts, with no obligations to pay a monthly charge.

Also, Vodafone offer free weekend calls and texts if you top up by £5 during the week. Great for the occasional user who wants to natter away at the weekend.

Driving A Hard Bargain

If you want a good deal but are not happy with what your current provider is willing to offer you when renewing your contract, bear in mind that every mobile phone provider has a ‘customer retention unit' designed to try to keep defecting customers.

Be prepared to negotiate or even threaten to leave - I did this once and got the phone I wanted for free! More often than not, you will end up with a better deal than what they first offer you.

SIM-only deals may be like a no frills airline, offering a good, simple deal at a great price. But, if you want a swanky new mobile phone, many are often only available with a contract, and if you know where to look for a good contract deal, you could still end up bagging a bargain. On the other end of the scale, if you don't use your phone that much, PAYG may be the better option.

Finding the middle ground is tough, but if you know roughly how long you natter for, don't mind using your old mobile phone to natter with and are looking for a simple deal without the frills, then you may well find yourself in SIM-only territory.

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