Paying for a mobile lifestyle

Published by Nathalie Bonney on 18 May 2009.
Last updated on 01 June 2011

Apple iPhone 3G

Back in the 1980s, mobile phones were a luxury item for the super-rich, and the thought of being able to slip one into your pocket was laughable. How times have changed - mobile phones are now wafer-thin, and the majority of Brits own one, if not two.

According to the Office for National Statistics, household ownership of mobile phones in the UK more than quadrupled to 70% between 1996/97 and 2002/03.

To keep demand up, mobile technology has become even more advanced. The latest innovation to surface is smart phones, which allow you to access the internet, as well as download and add applications. This means you can customise what’s on your phone and run multiple applications at the same time, like a computer.

Apple’s App store has set a precedent for its competitors, with over 25,000 applications for users of the iPhone (Apple’s smart phone) to peruse, from PocketGuitar, which allows you to turn your iPhone into a virtual guitar, to Lose It, which tracks your calorie count and weight loss.

Such applications have helped smart phones enter the mainstream, according to a report by research and consultancy service Juniper Research. The author, Andrew Kitson, predicts: “Next-generation devices will be led by software and content rather than hardware.”

Undoubtedly, the advanced capabilities of smart phones help set them apart from older models – but so does the price. So if you simply want to make calls and send texts, a smart phone is probably an unnecessary expense.

Choice of contracts

If you have your mind set on getting a smart phone, there are several types of deals available. If you want to avoid paying full price, or paying for your handset at all, you can opt for a pay-monthly package. These start at around £30, rising to £50, depending on the phone and network. The better monthly rates tie you into longer 24-month contracts, but some deals include free laptops.

If you don’t want to be tied into a lengthy contract, a pay-as-you-go deal might suit you better, although choosing a smart phone on a PAYG basis is considerably dearer as you have to pay for the handset. You can compare phones by price or features on mobile phone comparison websites such as and

However, technology is moving so quickly that, after their spot in the limelight, smart phones will undoubtedly become cheaper and increasingly easy to use. In fact, Juniper Research forecasts that by 2013 the sector will account for 23% of all new handsets sold each year.

It’s not just mobile phones that have developed dramatically over the past few years, though. A few years ago, mobile broadband simply meant accessing the internet from your mobile phone.

Now, mobile broadband has become truly flexible through the creation of a small device called a ‘dongle’, which looks like a USB memory stick. If you plug the dongle into your computer, you can pick up an internet signal using 3G – the same technology that mobile phones use. 3G phones are able to transfer data at faster rates than the earlier 2G or 2.5G models, and this increased speed enables mobile broadband to work as a viable alternative to fixed landline broadband.

The main advantage of mobile broadband is that you don’t need a landline, and it’s great if you don’t want to pay for broadband all year round – for example, if you’re a student or living in a short-term let. You can also get discounts if you use the same provider for both your mobile broadband and mobile phone.

With a dongle, you can access internet on the go and, unlike Wifi, with 3G you don’t need to be in a particular wireless internet hotspot. Although Wifi serves the same purpose as 3G, providing remote or wireless internet access, data is transferred over the web rather than a phone line.

Broadband speeds

Mobile broadband should be able to reach similar speeds to fixed-line broadband of 7.2Mbps, but 1Mbps is more likely. Trees, buildings and your proximity to a mobile mast can all affect how easily you pick up a signal.

Consumer website recently reviewed mobile broadband speed and connection: T–Mobile had the highest average download speed at 1.8Mbps on a one-month £20 contract, but you pay £50 for the dongle; Virgin Media’s dongle is free with its 18-month contract, and it comes second in the survey by Which?, with an average download speed of 1.1Mbps. Orange, Vodafone, O2 and 3 all delivered average download speeds of under 1Mbps.

Another disadvantage of mobile broadband is that its usage limits are still relatively low compared with landline broadband. The £10-to-£15 deals tend to offer between 3Gb-5Gb a month – 3Gb would let you browse the web for six hours a day, send and receive 300 emails a week and download 90 music tracks a week.

This is where the question of 
PAYG versus a monthly contract comes in. “If you just want to surf the net and check your email, then PAYG is fine,” says Ernest Doku, tech editor at “If you use your mobile broadband for media streaming, Skype (a service for free or low-cost phone calls over the internet) and data transfer, then a contract is best.”

You should always ensure you don’t go over your tariff limits. Some providers charge more per megabyte for out-of-tariff mobile use.  

As for using mobile broadband abroad, don’t get caught out like Will Pierce, who hit the headlines last year when he downloaded episodes of his favourite TV programmes only to return home to a £21,716 bill. Before you leave, check with your provider to see whether it offers a mobile ‘data-roaming’ bundle, such as O2’s £50-a-month package for 50Mb.

Looking ahead

Two things to look out for in the future are contactless mobile phones and ‘voiceover internet protocol’ (VOIP) mobiles.

Using the same technology as contactless bank cards, contactless mobiles will enable you to pay for small items by simply swishing your mobile over a reader. Colin Swain, head of mobiles at Barclaycard, expects them to hit the mainstream in the UK in 18 to 24 months’ time.

At the moment, contactless payment on mobiles is limited to £10 a day, but it’s hoped that we will eventually be able to use them to make larger purchases. “Their advantage is that they have a pin pad, so larger transactions should be possible in the future,” says Swain.

VOIP is basically Skype for mobile phones. VOIP’s popularity is thanks to its excellent value for money: you pay a connection charge but nothing for the calls. Nokia has announced that its N97 will have VOIP as standard, indicating that mobile calls could eventually get a lot cheaper.

“At the moment, it’s difficult with wireless networks; you can’t seamlessly hand over from one wireless to another, so conversations would have take to place in the same area,” says Doku.

The main problem is that Wifi coverage isn’t particularly widespread in the UK. But if London had blanket coverage like San Francisco, for example, calling could eventually be free – with not even a connection charge to pay.

Leave a comment