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Sim-only tariffs: how I saved £234 on my mobile bill

Emma Lunn
by Lovemoney Staff Emma Lunn on 15 April 2012  |  Comments 11 comments

As new research suggests we are wasting £5 billion a year as a result of being on the wrong tariff, Emma Lunn looks at how she managed to slash her own mobile costs

Sim-only tariffs: how I saved £234 on my mobile bill

We are wasting the best part of £5 billion a year as a result of not being on the right mobile phone tariff for our use, new research from Carphone Warehouse suggests.

Its research found that on average being on the wrong tariff costs each person £194 a year.

It’s not surprising that mobile users are getting it wrong when you consider that there are more than seven million mobile phone deals on offer in the UK.

You read that right, seven million. That’s a lot of searching and comparing to do if you want to find the best tariff for your needs.

The staggering figure has been fuelled by the recent rise in smartphones with internet access - which has added an additional layer of complexity to the already baffling arena of mobile tariffs.

My mobile bill

I recently came to the end of a two-year iPhone contract with O2 costing £30 a month, which gave me 300 minutes a month, unlimited texts and unlimited internet.

I was happy with my existing iPhone with no urge to upgrade it to the latest all-singing, all-dancing version, so I decided to opt for a SIM-only tariff. And because I was also happy with O2’s coverage in my flat and local area I decided to stick with O2 rather than risk switching to a network that might have blackspots where I live.

O2’s Simplicity tariffs are SIM-only meaning you just get a SIM card and you provide the handset yourself.

The cheapest Simplicity deal offered 300 minutes a month, unlimited texts and 100MB of data for £10.50 a month – so almost identical to what I had before for £30 a month except the data allowance. A quick check of my bill confirmed that I usually use no more than 25MB of data a month so 100MB looks more than enough.

So I’m saving £19.50 a month, or £234 a year, and not much has changed: same phone and a near-identical tariff.

Why are SIM-only deals so cheap?

Traditionally mobile phone firms offer contracts that include a handset and a set number of call minutes and texts each month for a monthly fee. Handsets are the expensive part of the deal for networks, so by offering SIM-only deals they can offer much cheaper tariffs.

Another advantage of SIM-only deals is that in some cases you only have to commit to a minimum of a month or 12 months rather than 18 or 24 months as required by most handset-included deals.

Potential downsides

The obvious downside to SIM-only deals is that you have to provide your own handset. You’ll also need to make sure the handset is not locked on to a particular network. If it is – and you want to use a SIM card from a different network – you can pay to have it unlocked.

If you have a SIM-only deal and your handset breaks down, it will be up to you to buy another one, whereas if you’re on a contract and the handset breaks down you can usually ask the retailer or network to repair it.

Saying that, don’t assume all handsets that form part of a mobile contract will last as long as the contract. iPhones, for example, are regularly sold on two-year contracts, yet Apple offers just a one-year guarantee.

What do the other networks offer?

There are some real bargains around if you’re happy to go SIM-only. Here are a handful of the best:

For £7 a month Orange will give you 150 minutes, 500 texts and 500MB of data on a 12-month deal.

For £8 a month Vodafone offers 300 minutes and unlimited texts but no data on a 12 month contract, or 100 minutes, unlimited texts and 100MB of data on a three-month deal.

For £10 a month Three will give you 300 minutes, 3,000 texts and 1GB of data on a 12-month contract while if you just want to commit for one month it will give you 100 minutes, 3,000 texts and 1GB of data for the same price.

Compare mobile phone deals at Recombu

More on mobile phones:

Which mobile phone insurer is the best value?

Avoid this mobile phone bill shock

Landline vs. mobile: time to ditch the home phone?

Cheapest ways to use mobile broadband abroad

Call 0800, 0808 and 0870 numbers for free from your mobile

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Comments (11)

  • rabb5it
    Love rating 13
    rabb5it said

    Save even more by throwing your mobile away!

    Report on 15 April 2012  |  Love thisLove  1 love
  • brcoombs
    Love rating 3
    brcoombs said

    Try Giffgaff- £10 a month for 250 minutes, unlimited texts and unlimited data.

    Report on 15 April 2012  |  Love thisLove  0 loves
  • MK22
    Love rating 141
    MK22 said

    Yes, go for Giffgaff. O2 coverage and works in an O2 'phone without unlocking ('cos part of O2 but much cheaper).

    Report on 15 April 2012  |  Love thisLove  0 loves
  • Mike10613
    Love rating 599
    Mike10613 said

    If you have a Pay as you Go and use it when actually needed rather than phoning to hear the latest gossip, you save even more. Women used to gossip over the garden fence, it was much cheaper. I see people standing outside their own homes making calls or walking along the street. They walk into the road texting and one moron was making a call driving down the dual carriageway in the outside lane last week; oblivious to the Jag coming up behind him at 70 miles an hour. He passed on the inside! People now need to become thrifty and frugal and mobile phones are a good place to start. I would like to see politicians, national and local, setting an example. Pigs will fly...

    Report on 15 April 2012  |  Love thisLove  0 loves
  • Klawman
    Love rating 17
    Klawman said

    Giffgaff have a £5 per month SIM-only tariff, as do VirginMedia for existing (broadband, phone and/or TV) customers. Perfect if you just want to make the odd call and don't send many texts. The VirginMedia deal is a rolling 30-day contract, so you are not tied in for a lengthy contract.

    Of course, if you have nothing better to do in life than Tweet, go on Facebook and yakk incessantly, and you cannot bear to be seen without the latest smartphone*, you have to be prepared to spend a stupid amount of money for the priviledge. Like the old adage goes - "A fool and his money are soon parted".

    *I wonder how many mugs have bought an Apple iPhone 4G - especially as a) 4G is not available in the UK and b) when it does become available, it'll be on a different frequency than the one supported by the iPhone.

    Report on 16 April 2012  |  Love thisLove  0 loves
  • PDB11
    Love rating 72
    PDB11 said

    I hope it's not out of place to put in a word of warning about scams here.

    Some years now since it happened to me, but...

    I was phoned by someone offering a really good mobile phone deal. Using the Vodaphone network, so good coverage. Mataphorical alarm bells went off in my head when he said there was no contract to sign, but wanted my bank details for direct debit. I wanted the terms and conditions. He said there is no contract, so no T&C. Instead, he offered to put me in touch with other customers who could give a reference. I refused to hand over bank details without written terms and conditions. End of phone call...

    I think direct debit has better protection now, but still best to avoid such scams.

    (Hint: if there's no contract at all, they don't have to give you anything in return for your money. And if there is, you need to see the T&C. End of story.)

    Report on 16 April 2012  |  Love thisLove  0 loves
  • yocoxy
    Love rating 132
    yocoxy said

    Emma, you're not "saving £19.50 a month" you've just finished paying for your handset and decided not to get a new one just yet.

    What you're paying now is just the cost of the airtime and calls.

    Report on 16 April 2012  |  Love thisLove  0 loves
  • fenemore
    Love rating 202
    fenemore said

    If you saved £234, then I shudder to look at how much you are prepared to pay for it. Just that £234 alone would be sufficient to pay my mobile costs for an entire decade!

    One of the mysteries of the 21st century is the inability of seemingly everyone being unable to be "out of contact" for even a millisecond of their lives!

    I wonder how long it will be before manufacturers remove entirely, the ability to switch them off.

    Report on 17 April 2012  |  Love thisLove  0 loves
  • SuBo
    Love rating 2
    SuBo said

    I have an extensive family and we all have a phone on GiffGaff! Free sim. We talk as long as we like to each other, all texts are free, and as long as the credit lasts on other calls we can talk! When you get short, you buy a goodybag which also lseems to last forwever. The joy of having grandchildren able to ring you when they like from Uni, and talk as long as they want to is bliss! You can talk to anyone who is on GiffGaff in the same way!

    Report on 19 April 2012  |  Love thisLove  0 loves
  • SteveJRBailey
    Love rating 0
    SteveJRBailey said

    I agree with SuBo. GiffGiff is by far the cheapest. They also have an Auto-Top-Up on Pay-as-you-go feature for low usage users, that allows almost contract cover but without the risk of runaway charges.

    And GiffGaff is actually an O2 company using their network.

    Join today: http://giffgaff.com/orders/affiliate/nitrosqueeze

    Report on 20 April 2012  |  Love thisLove  0 loves
  • traveler
    Love rating 0
    traveler said

    several notes:

    "Apple offers just a one-year guarantee":

    Except that they recently had to agree to the EU 2 year warranty directive.

    on the positive side, they are the only supplier/shop that for 140 pounds will exchange your broken/water damaged etc iPhone for a completely new manufacturer sealed and guaranteed one.

    Have not found Samsung, HTC, Sony etc offering the same.

    Contract warranty:

    It raises an interesting issue.

    There is a widespread story that the phone shops perpertuate, that despite being sold goods and services on a 18/24/36 month contract your phone is only guaranteed for faults for the 1st 12 months (not even the contact length that it should be).

    And that all ignores UK sale of goods act (reasonable life), let alone EU (2 yr) law

    rolling your contract on at the end.

    You do need to take action even for SIM only at the end of a contract.

    I had a contract for 15 pounds/month with a phone (so some 10 pounds/mnt for that) but at the end it jumped to 26 pounds !! (sorry?). Yes, amazingly end of contract the took away a 10 pound contract length only discount even though I was not now paying for a phone (a double penalty !) - no letter of warning I was comming to the end of my contract.

    The poor guy on the help line, apologised but could do nothing unless I signed for new "with phone" contract for less than a SIM only deal - go figure.

    some companies dont understand genuine loyalty

    - often cheaper to get a with phone contract and sell the phone

    than a SIM only for the same mins/txt/ data !

    Wifi Tethering:

    All those Data allowances (unles you are on an O2 "contract") are for phone use only. There are only 2 contracts currentty that offer wifi (or USB) tethering in the deal. The full Monty from t-mobile and the One Plan (available on a 30 day SIM) from THREE.

    O2 include tethering in their much more limited data allowances as standard on contract (but not PAYG).

    Report on 14 July 2012  |  Love thisLove  0 loves

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