The mobile phone industry is a strange beast where handset costs are offset against long contracts, which over time repay the value of the initial hardware.
There aren't many tech products that fall into this type of arrangement except maybe your latest Sky box which you get for free or at a reduced cost in return for signing up to a 1-year contract.
When phones were basic and could only send text messages and make phone calls a 12-month line rental agreement was plenty of time for the mobile phone networks to recoup the costs of providing free hardware at the start of the agreement.
Today though the mobile phone is a different animal and the latest smartphones are a clever as your home PC, laptop or dare I say Mac!
In fact in many ways they are more cutting edge with all of those electrical components having to be miniaturized to fit inside a shell that can actually still be mobile.
This has of course driven up the value of such devices which has ultimately led to the 24-month contract.
In fact if we look at the handset only prices for today's smartphones it would probably shock no-one to see a price tag of between £400 and £700.
I absolutely hate the idea of a 24-month contract! It is indeed the norm but that is an awful long time to be tied to one phone as you see new mobile phones released and shown off by your family and friends.
But, having said this I think we have to get used to the idea that if we want a new product mid-contract then we will have to pay for it. After all when everyone owned a laptop, which was the prominent situation before smartphones and tablets, if you wanted a new one then you went out and paid for it, at full cost.
So, unless you use a laptop for work a mobile phone will probably have replaced this piece of tech altogether, hence one cost has been replaced by another.
If you have taken the free handset option and would like to update it mid-contract then there a few options open to you.
There aren't many tech products that fall into this type of arrangement except maybe your latest Sky box which you get for free or at a reduced cost in return for signing up to a 1-year contract.
Mobile phone contracts
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| The new Samsung Galaxy S5 |
Today though the mobile phone is a different animal and the latest smartphones are a clever as your home PC, laptop or dare I say Mac!
In fact in many ways they are more cutting edge with all of those electrical components having to be miniaturized to fit inside a shell that can actually still be mobile.
This has of course driven up the value of such devices which has ultimately led to the 24-month contract.
In fact if we look at the handset only prices for today's smartphones it would probably shock no-one to see a price tag of between £400 and £700.
Are 24-month contracts too long?
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| Win a mobile phone |
But, having said this I think we have to get used to the idea that if we want a new product mid-contract then we will have to pay for it. After all when everyone owned a laptop, which was the prominent situation before smartphones and tablets, if you wanted a new one then you went out and paid for it, at full cost.
So, unless you use a laptop for work a mobile phone will probably have replaced this piece of tech altogether, hence one cost has been replaced by another.
Buying a new phone mid-contract
If you have taken the free handset option and would like to update it mid-contract then there a few options open to you.
- Buy a smartphone SIM free at full cost.
- Take out another contract.
- Ask for an early upgrade from your contract provider.
All of these options will likely end up costing you about the same amount of money. But, if you don't want to pay up front for a new handset then taking out another phone contract is an option. You could even reduce the line rental on your old contract to the lowest possible option and then consider it as a small loan paying itself off over the remaining term.
Maybe it is time for the mobile phone networks to introduce a more sensible and ultimately helpful solution.
They could offer for you to keep the same number, re-sign a 24-month contract from the day you update to your new phone and add a repayment amount onto your existing contract.
This way everyone would win, you get your new handset, you pay for it on your monthly bill in small installments and the network gets your business guaranteed for another 24-months.
Opinions?
So what do you think about this whole topic?
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