should you buy the iphone 4 sim free or on contract?

iPhone 4 Some of you will be wondering whether to purchase the iPhone SIM FREE, buy it on contract or upgrade via your current contract. Much will depend on your current usage, where you use it, whether you want to save money in the long term or the short term and also whether you mind committing to an 18-month or 2 year contract. If you're like many other people including myself the you will not want to be tied down for so long. There may well be an updated iPhone within 12 months or there might be better deals available as they are always changing.

The initial cost of the iPhone 4 SIM is not cheap, it is now available SIM FREE via the Apple Store from £499 for the 16GB to £599 for the 32GB version, but buying it unlocked and without the long-term contract will give you so much more freedom. You wll be able to use a PAYG or SIM-only contract from any network and will be able to switch networks as you please. The iPhone 4 is also set up to work with micro-SIM card carriers worldwide so if you are travelling internationally you will be able to slot in a local carrier's SIM for cheaper calls.

The cheapest iPhone 4 SIM-only deal on O2 gives you 300 minutes, Unlimited Texts and 500MB of Internet data for only £15 on a 30day contract or £20 on a 12 month contract. The corresponding pay monthly contracts on 18 and 24 months are £30 and £25 respectively. That means the iPhone 4 SIM only is up to £15 cheaper than the iPhone 4 18 month contract. Over the 18 month contract that would come to a total saving of £270. However when we do the math for total costs, the cost of purchasing outright or on a contract works out to be roughly the same in most cases. See our example below:

On an 18-month contract, assuming a cost of £229* for the 16GB phone on contract and £499 for it SIM FREE:

O2 30 day SIM - £499 + £15 per month x 18 months = £769

O2 18 month contract - £229 + £30 per month x 18 months = £769

*guesstimate based on Orange iPhone 4 pricing on cheapest 18 month price plan. I'll update when O2 release their price points.

Where you're actual saving will come will be in the next after the 18 months are up and you are paying £15 per month instead of £30 thereafter. Obviously this will depend on the price you pay for the phone.

the main advantages of buying SIM FREE are:

You are not tied into a a long-term contract whether it be 18 or 24 months this allows you to:

  • take advantage of better deals on other network providers throughout the year.
  • sell your iPhone and change to the updated, latest one when it is most likely released in a year.
  • Get more money for you iPhone if you sell, it will be unlocked for more networks and it will still be worth more after 12 months than it will be after 24 months.
  • If you're situation is uncertain and you may find yourself leaving the country or jobless a SIM-only contract will allow you to cancel with 30-days notice and there won't be a long-term contract to keep paying every month.

 

 

 

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