Phew. I feel tired just having written the title.
I recently got the new iPhone 3GS. I wasn’t convinced by previous iPhones but this one, and the release of OS3, seemed to fix a lot of the problems with old models — copy & paste, video, HSDPA — as well as being thoroughly good-looking.
The one thing I don’t want ever again is an 18-month contract. I think they’re nuts. 18 months of lock-in in a sphere of technology where improvements seem to appear every 6 or 8 months just isn’t sensible, especially in a fiercely competetive market for service providers: I guarantee there’ll be much better tariffs available for new customers in a year than there are now.
So, I wanted to get hold of the phone without the contract. The obvious way to do it is to buy the phone on Pay & Go and then take out a rolling 1-month contract. I crunched the numbers and it’s a perfectly sensible thing to do, financially speaking. Over 18 months, the total cost is almost the same:
| Tariff | Cost of Phone | Monthly charges | Total cost | Total cost/month |
|---|---|---|---|---|
| 18-month iPhone Contract | £274.23 | £34.26 | £890.91 | £49.50 |
| 1-month SIM Only Contract | £538.30 | £20 | £898.30 | £49.91 |
That’s for the 32Gb model. With the 16Gb model, SIM-only is actually slightly cheaper. But what do you get for your money?
| Tariff | Minutes | SMS | Data | Wifi | Visual Voicemail | Tethering/Broadband |
|---|---|---|---|---|---|---|
| 18-month iPhone Contract | 600 | 500 | Yes | Yes | Yes | Yes, 3Gb — £15 extra |
| 1-month SIM Only Contract | 600 | 1200 | One or the other | No | Dongle, 3Gb — £14.69 extra, includes unlimited wifi | |
My feeling is that SIM-only is definitely better. There’s no way to get visual voicemail, but that’s not a killer feature for me.
The lack of tethering is annoying, but not critical — partially since a dongle costs the same, but also because most of what I’d do with a tethered connection (email, twitter, the odd bit of web browsing) I can do on the phone almost as easily. That a dongle comes with unlimited wifi is a nice bonus, though I’m not sure how that’s managed: it might only work with the laptop, and not the phone, depending on how they authenticate people who are connecting to a hotspot.
Another nice plus is that with a dongle on SIM-only, you end up paying £35/mo — the same as what you’d pay on an iPhone contract without tethering — though the actual cost over 18 months is of course the same.
There is one caveat that’s worth mentioning: most mobile companies, presumably including O2, will actually let you change your tariff 15ish months into an 18 month contract. If you dropped down to the £20 iPhone tariff, that’d change the figures — but not by much. Also, if you’re anything like me, it’s worth making sure your phone is insured whichever route you take.
Coming up tomorrow: the saga of Harry’s phone switch, aka: “Mobile phone companies are crap“.
This post is tagged iphone 3gs, mobile phones, O2, orange, tethering, visual voicemail
Harry, at 12 months you’re £100.00 worse off on the PAYG deal and only nearly break even when you get to 18 months. Therefore other than being free of tie and able to take the hit whenever you like, where’s the benefit ? In fairness the “get out” works out cheaper on PAYG at 12 months but then your monthly cost has been £65.00 and not £49.00
True — but I can unlock the phone later and switch networks with no penalty, or switch to a cheaper tariff if my usage goes down.
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