A guide to the payment plans of mobile phones (Buyers Guide: Mobile Phones)

Member Name: iamasadlittleboy

Product:	Buyers Guide: Mobile Phones
Date:	24/08/09 (24 review reads)
Rating:

Advantages: Planning to save yourself money

Disadvantages: You might end up on the wrong deal as your life changes

The piece is solely about mobile phone PRICING plans, it doesn't take into account network signal quality.

Mobile phones have come a long way in the past 3 or 4 years, both in technology with things like the Iphone and the XTC and with pricing plans. About 5 years ago you either had a Pay As You Go (PAYG) or a Contract, but with modern day being about more options and selections, menu's that are never to big phone dealers have started to offer more ways to have a phone plan.

The obvious two are still PAYG and contract which can easily be summarised as Pre-pay and Post Pay. With a PAYG you pay in advance for credit that you then use any way you want, the credit you buy is in the form of "top ups" and purchased in one of several ways including by switch over the phone, by cash in a retailers (which sees you purchasing a code to enter) or by switch in at an ATM. The credit can then be spent on calls, texts, internet access and purchases of things like content or "services". When the credit is used up the customer must purchase another batch of it for their network or provider.

Contract is the opposite and is one of (what is now 3 forms) the post pay phone deals, in which you make your calls, send your texts and use the internet all you want. You will be sent an invoice at the end of the month for your usage and any extras (such as insurance or bolt ones) you've requested. What you often find with this sort of a deal is that you get a phone (often of your choosing) to go along with your deal and you get given a "free" allowance. Often something like 600 minutes, unlimited texts for £30 a month with a a Sony Ericsson C902 for example. If you stay with in your allowance you just pay the monthly tariff, go over and you pay more.

In recent years there's been 2 other post pay types of deal, one of them it mainly run by T-Mobile and is called "Flex" in which you pay the same way as a contract except your credit usage is more like that of a PAYG. You're not tied down to having X minutes and Y texts they are flexible inside the credit that you get so if one month you're needing to send more texts you can with out penalty, whilst if another month you need to make more calls you again can do. Usually with a flex type of plan you will buy £60 of credit for £20 a month meaning you get more than you would if you were to remain on PAYG. However with the advent of "unlimited" text deals the actual practicality of flex plans is seemingly numbered.

Also available is the final form of post pay plans, a "SIM only" which is a short term rolling contract. Usually the length of these are 1 month at a time, with the ability to cancel giving just 28 days notice with no penalty and can be considered a contract-lite deal. They have a similar concept to a contract deal you pay X every month for Z minutes of calls and W texts, however with these you do not receive a phone as part of the deal.

There is also a form of "super SIM's" on PAYG that sees you getting rewarded bonuses for topping up, though this at one point used to be quite unique and made the SIM's quite valuable. Now a days these have taken over from regular style PAYG deals as every network seems to offer a bonus reward (often an amount of free texts) for topping up a specific amount or spending a specific amount during the week/month. The original deal with the 3 Network was that you'd put an amount of credit on your phone, get slightly better value for money than a normal pay as you go, but you'd also have to use your credit by the end of a 28 day cycle or you'd lose it, rather like a pre-pay SIM only.

So which is the cheapest?
Well this more depends on how you intend to use your phone, for those that intend to have it "in case of emergencies" you'd be far better off on a PAYG plan and topping up as of and when needed. With the ability to top up by switch you've always got the ability to put money onto your phone if the emergency arises in which it needs to be done.
If your the sort of person that uses the phone a lot but never sure of what their doing that month then a flex deal maybe ideal for you if you can find one at a good price. Though in all honesty these are likely to be a dying sort of things as company's begin to try and undercut each other in the contract market the "flex" of the texts part is a moot point.
If your a heavy end user a contract deal would be the best for you, though whether you go for a SIM only or a "true" contract depends on a secondary need. Do you already posses a phone you're comfortable with using? If not are you happy to be tied in to a deal (often either for 12, 18 or 24 months). If you have a phone you like already (or you're buying a handset outright anyway) then there is going to be no appeal in a full contract that has you tied into a deal. The flexibility of a SIM only plan allowing you the change providers (as long as you're phone is unlocked) is hugely appealing to some.
If you're wanting a new phone however and don't mind being tied to one dealer a contract is your best bet. They do cost a bit more than a SIM only for the same amount of time and texts but you do get a phone for effectively the difference multiplied by the months of the contract.

It's also often a clever to be wise, look at all the deals available and see if anyone will match it or even beat it. When it comes to renewal time for a contract this is where the customer gets the upper hand and can play Vodafone for example off against O2 and Orange and see which is willing to undercut the other by the most. This often sees you getting a much more personalised deal than you may have gotten if you'd gone to the company with out mentioning anything else.

Also remember that for some internet browsing limit's need to be looked into just as much as minutes of calls and number of texts.

The cheapest plan, is the one that suits the person getting it more than the others, as no single plan is cheaper than all the others. Having a PAYG and making 600 minutes of cross network calls and sending 2000 texts every month will see you financially ruined, where as paying £25 a month on a contract and not using the phone at all is just as wasteful (but less costly). Only you know what you're going to do with your phone, so shop around and look at what you need, not at what the sales people are trying to tell you.

Summary: Get what suits you