01 September 2009

Should I buy a phone SIM-free and pay the full price for it, or should I get it on the cheap with a contract?

In Europe, the overwhelming majority of mobile phones in circulation are phones that were supplied to the users with a contract or pay-as-you-go SIM, up to 90% in the UK and probably similar figures elsewhere in Europe. In the Far-East, however, things are the other way round. Most people buy their phones directly from the manufacturer's outlets or from third-party retailers and get just the line and communications from the mobile network operator.

The aim of this small article is to outline the pros and cons of each method so that you can make an informed choice based on budget and on your thirst for a regular technology fix.

Initial cost:

This is about the only area where a contract phone wins hands down. Many operators will have huge flashy signs all over the place touting a "free" phone with the contract. Of course, the phone isn't free at all, you're paying for it over the duration of your contract, but you have no initial expense over the cost of your contract itself and any usage not included in your bundle. If the phone isn't "free" it is certainly at a price considerably lower than that of the SIM-free version of the phone from Nokia themselves or other retailers.

Contract cost and flexibility:

In most countries, if you take out a SIM-only contract with the operator, the monthly payments will be lower than if you took out a phone with a contract. In the UK, there's usually a £15/month or so difference.

Not only that, but you are also legally bound to stay on that contract with the operator until its expiry, which is usually 12, 18 or 24 months long. Assuming an 18-month contract that's £15/mo cheaper SIM-only, you've just saved £270 over the course of your contract, and that could pay for a pretty decent phone.

With a SIM-only subscription, you can jump ship to another operator at less than a month's notice with no penalty incurred. If you want to do so on a contract with a phone, you have to pay the full subscription up until the contract's expiry before they'll let you go.

So, in short,

Contract with phone: more expensive contract that you're locked into until its expiry 12, 18 or 24 months later.

SIM-only subscription: cheaper monthly payments that can save you enough to cover the SIM-free phone, and you can switch providers whenever you want.

Locking issues:

Most contract phones are locked to the networks that supplied them. This means that you can only use a phone locked this way with SIM cards from the operator that enforced the lock. If you want to use SIM cards from competing operators you have to obtain the restriction code from the original operator.

The policy of giving out restriction codes for locked phones varies from one operator to another. Some will give it for free once you've been with them for a certain number of months, some will make you pay for it while you're still in the contract period but will give it for free thereafter, and some will flat out refuse to give it inside the contract period.

Note that lifting the SIM-lock on a locked phone by entering the restriction code will NOT remove the network branding (see "Features and updates" below).

If you buy a SIM-free phone then that's exactly what it'll be: SIM-free. You'll be able to use SIM cards from ANY operator in it and you won't have to go through the hassle (and cost, albeit small) of getting the restriction code if you want to switch operators.

Features and updates:

Phones supplied by network operators are network-branded. This means that they alter the features of the phone to suit their marketing needs and basically turn it into a semi-functional device used to advertise to you. Features that they don't want you using are removed, their logo is plastered all over the place and links to their services are stuffed into the menus.

In some cases, they add a few features that are required to take full advantage of their subscriber services.

Given that the firmware in these phones is something based on Nokia's original firmware but subsequently modified by the network operator, any updates that the operator is planning on releasing will become available to your branded phone AFTER they've been made available to generic, SIM-free phones. You will have to wait for your network operator to modify the firmware and release it, and this can often take a very long time, if indeed the operator bothers doing it at all. You may well be left with buggy firmware while users of SIM-free phones have already updated theirs and thus eliminated the bugs. Not to mention bugs introduced by the networks themselves during the branding process.

When updating a network-branded phone, you are not "debranding" the phone, ie. turning it into a generic, SIM-free phone. You are installing a newer version that has been branded by the network operator, hence the wait for operator approval.

With a SIM-free phone, you get a phone as it was originally intended by the manufacturer and you have access to updates as soon as they are released by the manufacturer. You are no longer being told by your operator what you can do with your phone and whether you can update it (and get rid of software bugs) or not.

In conclusion:

If your only consideration is the initial cost of the phone, then by all means get one from your operator at a cut-down price. Just beware that you may end up paying more in the long run if the value of your phone SIM-free is less than the premium you're paying on your contract for the privilege of getting a phone that's been messed around with.

In all other areas, the SIM-free phone wins comprehensively. Your contract is cheaper (in most countries), you're not tied to the operator for months on end, you get a fully-featured phone without bugs added by the networks, and you get firmware bugfixes before anybody else.

3 comments:

Anonymous said...

It's always worth seeing what you can negotiate when you're renewing your contract. Last time I renewed with O2, in return for signing up for another 18 months they not only gave me more minutes and texts for less money (plus free data), they also gave me £150 credit for not taking a new phone... which helped pay for my sim free N79.

Of course that sim free N79, far from getting the latest updates, is now stuck two firmware versions behind the latest release, but you've covered that story in another post...

lara tomb said...

good post

Dorothy jacob said...

Thanks for the post