The UK phone market has altered radically in the last few years, with larger and better-quality screens, improved cameras, faster internet connectivity and more choice all helping to shake things up for consumers.
However, technology hasn’t been the only driver of change: equally important has been the increase in options consumers have when it comes to financing their mobile phone purchase.
Research by YouGov shows that back in December 2015, 67% of mobile phone owners in the UK financed their mobile phone deal with a traditional contract which covers both the handset and airtime.
Four year later by December 2019, the picture had changed radically: fewer than half (48%) chose a traditional contract, with more and more opting for an outright phone purchase to go along with a SIM-only deal.
So why are people are increasingly shunning the traditional method and opting for a contract-free mobile phone and a SIM-only deal?
What is the difference between a traditional deal and a SIM-only deal?
With a traditional mobile contract you enter into an agreement that requires you to pay a fixed fee on a monthly basis.
The length of the deal can vary, between 12 – 48 months and the average duration is two years.
In some instances, to reduce monthly payments – normally when purchasing a recent model – customers pay an upfront fee in addition to the monthly payments.
Together, the fees cover the cost of the mobile tariff and payments on the handset and at the end of the contract’s duration you will own the phone outright.
With a SIM-only deal, you buy the phone upfront and then are only paying for minutes, texts and data.
What are the advantages of a traditional contract deal?
Although a traditional mobile phone contract might work out as more expensive in the long run, the main advantage is that you can get a deal where you don’t have to pay anything upfront.
As long as you can cover the cost of the monthly payment, you can get a new device immediately and at the end of the deal, you can get another new mobile phone immediately (assuming you sign another fixed-term contract).
What are the advantages of a contract-free mobile phone deal? Freedom to change!
A contract-free, SIM only deal gives people much greater flexibility. Often, you are locked into a traditional deal for 24 months and this makes changing your device more difficult (although not impossible in certain instances).
But with a contract-free, SIM-only mobile phone deal, you are free to change your device whenever you want – as long as you have the cash to pay for your new phone up front. Choice can be greater, too, as you are not locked into a particular network (you can choose the best SIM-only deal for you) and are free to pick whatever device you wish.
The other main advantage is that contract-free, SIM-only deals work out cheaper. So while the barrier to entry might be higher, it’s worth it in the long run.
Which one should I choose?
More and more people are seeing the value of a contract-free, SIM-only deal of late, as evidenced by the YouGov research referenced above.
However, many people will already know that purchasing a phone outright will be pretty far out of their budget. This is where Communities such as NIX come into their own.
There are many advantages of a SIM-only deal and before deciding that this route is out of reach it’s worth shopping around. Because just as the SIM-only deal has revolutionised the market, a new route to mobile phone ownership promises to do the same.
It is now possible to significantly reduce the cost of purchasing a mobile phone outright by trading in your existing device and securing a discount.
In fact, the latest development in mobile management allows you to trade in more than one device to get your outlay as close to zero as possible – making the choice between a SIM-only deal and a traditional contract all the easier.
Remember, for the best price possible, recycle your old phone with NIX and sign-up to our Premium Membership at NIX.
