Thinking of buying the latest mobile but unsure how to cut costs? Moneywise has compared the price of two of the newest and most desired handsets on the market - the Samsung Galaxy S7 and Apple’s iPhone 6S - bought directly, versus buying from your mobile provider.
Both of these devices and their larger cousins, the Samsung Galaxy S7 Edge and iPhone 6S Plus, come with a price premium, but for many, that’s not a deterrent.
We’ve looked at prices at each of the big UK networks for the 32GB Samsung Galaxy S7 costing £569 directly from Samsung, and the 16GB iPhone 6S costing £539 directly from Apple.
The networks don’t all offer matching tariffs, so for each one we’ve used the closest to either 3GB or 4GB of data, with unlimited texts and minutes.
Phones paid for within contracts are all for 24 months. For SIM-only prices we’ve chosen 12-month contracts, but worked out the cost over two years to ensure a fair comparison.
At the time of writing, some providers had said that they planned to raise prices by Retail Price Index (RPI) inflation (1.1%) later in March or in April.
- the price of buying the phone on a contract with a small one-off fee;
- the price when you choose a SIM-only deal and buy the handset elsewhere; and
- where available, the price when the network offers you the option to buy the phone outright directly from it.
What we found
You might already know a few tricks to bring down mobile costs. Negotiating with your network may bring a discount on your monthly tariff, though that’s harder to pull off with high-end handsets.
Another way to save is to buy the handset upfront and to move to a SIM-only contract. Here, instead of paying for your phone each month, you are just paying for your calls, texts and any internet use. Just ensure you buy what’s known as an unlocked handset, as this gives you the flexibility to shop around to get a SIM-only tariff from any provider.
Our research found that this is generally the cheapest way to buy a mobile phone as the tables opposite reveal.
However, there is one exception, which proves it’s important to compare total costs. The Samsung on contract with Vodafone is actually £12 cheaper than buying the phone direct and getting its SIM-only tariff.
When upfront costs aren't upfront
One key finding to highlight is O2’s price when buying the handset upfront. Its online homepage features a “Pay for your device in full” banner, which promises you “a lower monthly bill”. You might presume this is the SIM-only option. But you’d be wrong.
Under this offer, the upfront cost for the Samsung is £639.99, rather than £569 directly from Samsung, and for the iPhone it’s £609.99, rather than £539 from Apple. O2 has added a £70.99 premium on to the retail price for these handsets, and you’re then locked into a contract anyway.
Here, you’re also paying £60 more over a two-year period for the Samsung and £70 more for the iPhone compared to the regular O2 price for taking out a handset with a monthly contract and paying a partial upfront handset fee.
You’d save even more if you bought the handset direct from the manufacturer. The Samsung paired with O2’s SIM-only tariff over 24 months is £142.99 cheaper, and the iPhone is also £142.99 less (though from 21 March, this cheaper option will only come with 2GB of data).
An O2 spokesperson confirms that customers paying for a device outright might pay more than the recommended retail price set by the manufacturer.
As our research shows, it’s always worth checking to see whether a bundle can save you money compared to paying for a handset upfront and getting a SIM- only deal.
You might also be better taking a contract if you’re already paying for bonus extras offered for free by some mobile providers, such as six months free Netflix with Vodafone or free international calls and data with Three.
Also, check retailers such as Mobiles.co.uk and Carphone Warehouse, which offer different – often cheaper – prices on deals from the main networks.
Plus, once you’ve found a deal, hunt for cashback from sites including Quidco and TopCashback.
And when buying a phone, consider your needs – don’t pay for unlimited minutes and 4GB of data, for example, if you rarely make calls or use the internet and you only want a phone for texting.
Prices correct as of 4 March 2016.