Ditching traditional mobile phone deals could mean the end of being tied into long contract and could also save you money. Emma Lunn finds out what’s on offer.

Ditching traditional mobile phone deals could mean the end of being tied into long contract and could also save you money. Emma Lunn finds out what’s on offer

If you want to reduce your mobile phone expenditure, or avoid tying yourself into an 18-month contract, a SIM-only deal could be worth a look. During 2008, all the major networks have been pushing SIM-only deals and there are also new entrants to consider – household names such as Ikea and Tesco have also joined the market.

Experts say mobile users could double the amount of inclusive call minutes and texts they get for their monthly fee by switching to a SIM-only tariff.

What is it?

As the name suggests, with a SIM-only deal you just get a SIM card and have to provide your own handset. The SIM card, or Subscriber Identity Module, stores data such as a customer’s mobile phone number and address book contact information. It allows you to easily transport your phone numbers and contacts to a new phone simply by removing the card from one phone and inserting it into another.

Standard monthly contracts include a SIM card and a handset, which can usually be upgraded to the latest model every 12 or 18 months, depending on the length of your contract. By offering SIM-only deals, networks don’t have to cover the cost of new handsets so they can offer cheaper deals.

James Parker, commercial manager of mobiles at moneysupermarket.com, says consumers are spoilt for choice with new SIM-only deals appearing every week and the networks fast dropping their prices to compete.

“One of the main attractions to these deals is the great value on offer,” he adds. “Invariably the mixture of minutes and texts is much cheaper than if you were tied into a contract as the network is not subsidising the cost of the handset as part of the monthly contract.”

Parker says a SIM-only deal could double your inclusive allowance, and are perfect if you do not want to be tied into a lengthy contract as typical SIM-only contracts have a minimum term of just one month.”

Pay-as-you-go

SIM-only deals are also available on a pay-as-you-go basis. These deals don’t have a fixed monthly set cost but instead you provide a handset, buy a SIM card and pay set prices for calls and messages. Customers are required to ‘top-up’ their credit with vouchers instead of receiving a bill.

Ernest Doku, technology editor at mobile phone comparison site OMIO.com, says: “SIM-only mobile deals generally come with excellent tariffs and offer great flexibility, such as allowing people to keep their existing number and phone and requiring them to give only 30 days’ notice.

“Pay-as-you-go SIM-only offers are even more flexible as they work on a top-up basis, and are an alternative to get cheap international calls.”

For example, according Doku a Vodaphone pay-as-you-go SIM offers landline calls to 16 countries, including Poland, India and Nigeria for 5p a minute. The same calls can cost as much as £1.65 a minute on a standard Vodafone pay-monthly contract.

Ikea’s and Tesco’s SIM-only offerings are pay-as-you-go. Ikea’s Family Mobile tariff is open to people who join the Ikea Family, the store’s loyalty scheme. Customers who sign up receive a SIM card but have to provide their own phone. UK calls, routed over the T-Mobile network, cost 9p a minute and texts are 6p each. Ikea claims the deal is at least 25% cheaper than other pay-as-you-go deals.

You can also get a free SIM card on Tesco’s pay-as-you-go tariff. Calls are 20p a minute and texts are 10p with half-price calls and texts to your five favourite numbers. You also get 500 texts or 150 free minutes if you top up with £15 or more each month.

Keep your number

Switching to a SIM-only deal doesn’t necessarily mean you need a new phone number. If you are switching to a SIM-only deal with your current network and are not tied into a contract, your provider will be able to switch your number to a SIM-only deal.

If you are switching networks, then your supplier will have to follow Ofcom’s rules on mobile number portability. You will need to ask your existing mobile company for a PAC (Porting Authorisation Code) before you cancel the service. This is a reference number which you will quote when moving to another provider. Tell your new mobile phone company that you want to use your existing mobile number, then quote your PAC.

SIM-only deals are suitable for many people but anyone who wants to save money will find them particularly beneficial.

And if you want the latest handset as soon as it comes out, a SIM-only deal could also prove your best option. By opting for a SIM-only deal, you can buy a new handset as soon as it’s available, rather than wait for your contract to expire so you can upgrade or switch to a deal offering the handset you want.

The cons

However, there are downsides to SIM-only deals. The most obvious is that a handset is not included so you will have to supply your own, either by using an old one or buying a new one. Using a phone more than a year old will often mean it’s out of warranty and you’ll have to pay for any necessary repairs.

You will also need to make sure the handset you want to use is unlocked. When you buy a handset it’s normally ‘locked’ to the network that supplied it and will not accept SIM cards from rival networks until it has been unlocked.

You might see a message saying “invalid SIM card”, “phone restricted”, “enter network lock code” or something similar when you insert another SIM card. Your phone company may unlock your handset or you could try a phone shop on the high street, which will do it for £5 to £10. There are also websites that can unlock your phone, normally for a small fee.

Negotiate, negotiate, negotiate

If you don’t fancy a SIM-only deal but want to reduce your bill, negotiating with your supplier at the end of your contract often does the trick. Sales or customer service departments only offer a limited number of tariffs but customer retention departments, also known as disconnection teams, usually have more power to offer better deals.

Customers who threaten to switch to a rival provider can often negotiate a cheaper rate by contacting one of these departments.

In some cases, you can negotiate a higher minutes and texts allowance, or you might be able to reduce what you pay each month. If you’re coming to the end of your contract and aren’t bothered about upgrading your handset, some networks will offer you cashback on your line rental instead of giving you a new phone.

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