Until recently, when the latest smartphone hit the shelves fans would queue around the block to be the first to get their hands on it.
But now sky-high prices mean people are hanging on to their mobiles.
Experts say those who have paid a lot for an expensive handset are choosing to keep them for longer than the traditional contract renewal terms of one or two years, taking out a cheaper Sim-only deal.
Experts say those who have paid a lot for a handset are choosing to keep them for longer than the traditional contract renewal terms of one or two years, taking out a cheaper Sim-only deal
This is where customers buy a package of minutes, texts and data which can be paid for monthly, without purchasing a new handset.
The latest iPhone X Max will set you back up to £1,449 while Samsung’s latest Galaxy S10+ phone costs as much as £1,399.
Both companies are now offering deals that trims hundreds off the price of a new handset, but the cost is still too much for many customers.
- If you are a low data user, go for the Tesco Sim-only 1GB deal. It costs £7.50 a month and gives you 500 minutes and 5,000 texts.
- Standard data users should opt for the Three Advanced, which has just been given a boost from its normal 4GB of data for £11 a month to 8GB (with unlimited calls and texts, like the two deals below) for £10 a month.
- High data users can choose Three’s Advanced deal for 12GB at £14 a month.
- If you don’t go abroad often, you will not need data roaming. Try Vodafone basics 1GB deal for £8 a month. They are currently running a promotion that will give you 3GB instead of the usual 1GB.
In a survey last year, 40 per cent of people over the age of 30 said upgrading was too expensive, according to research by Comparemymobile.com.
Klaus Henke, managing director of consumer website Billmonitor.com, says: ‘With handsets becoming more and more expensive, many customers may be questioning whether they need to spend so much money on a new phone or whether they can squeeze some extra life out of their existing handset.’
Telecoms watchdog Ofcom and Citizens Advice have helped to raise the profile of Sim-only deals, highlighting how millions of customers are continuing to pay for their handset after their minimum contract period has expired and the handset has been paid for.
According to Ofcom, approximately 1.5 million people may be paying an estimated £330 million more for their mobile phone bills than necessary.
The communications watchdog this month announced that mobile and broadband firms must, from next February, inform customers when their contract is due to expire and what other deals it offers.
Furthermore, research by Citizens Advice revealed 34 per cent of users are paying this ‘loyalty penalty’, costing them an average of £264 a year.
Until then, Citizens Advice is warning people to check their phone bills to see if they can save money with a Sim-only deal. Customers who own their handset can save money by opting for one of these deals.
Once they own a handset, customers can save more than 70 per cent on monthly bills by switching from a costly contract to just the price of the Sim card.
If you buy an iPhone 8, with 64GB of storage, you can get a two-year deal with O2 for £24 month and an upfront charge for the handset of £150. The real cost of the phone is £599, and the monthly bill will also include some of the handset charge.
Once they own a handset, customers can save more than 70 per cent on monthly bills by switching from a costly contract to just the price of the Sim card
But if you already have a handset, a Sim-only deal with Vodafone with 3GB of data costs just £8 a month.
However, if you need a new phone, paying for the handset and Sim-only deal separately will be more expensive than buying them together over a 12 or 24-month contract.
But many users continue paying for the handset even once their minimum contract term ends.
A number of new players have entered the growing Sim-only market. High Street chemist Superdrug launched a £10-a-month Sim-only deal last summer for customers with its loyalty card.
Sim-only network Smarty, which is part of Three, also launched last year as did Vodafone’s Voxi, which offers a 30-day rolling Sim.
However, some experts are warning that not all Sim-only deals offer great value for money.
Klaus Henke says: ‘We have seen a move towards networks offering expensive Sim-only tariffs, but they are a red herring.
‘They offer, say, £20 for 20GB knowing that the customer is going to use only 2GB.
‘It is cheaper for the network to offer this deal because it reduces the cash they have to lay out upfront for the handset.
‘But the customer is still paying for data they do not need.’