PROMOTED: The Next Generation of Phone Contracts

It's time to say goodbye to traditional phone contracts

by Promoted Content Poster Dec 7, 2016 at 2:18 PM

  • Tech Article


    PROMOTED: The Next Generation of Phone Contracts
    In the last few years, mobile phones have changed rapidly, from predictive text to touchscreens, 4G and fingerprint encryption. Each new innovation has been welcomed and pored over, on this platform and others. Smartphones, however, still remain something of an oddity in the gadgetsphere.
    Smartphones are the only gadget listed on this site that come shackled to a longterm contract. Think about it. When we buy stereo equipment or headphones, we don’t sign up exclusively to Spotify music streaming services for two years. We’re free to pick and choose. The same goes for laptops and home computers; no broadband provider steps in to tell you that you can have the latest laptop for £50 a month, but only with their network connection.

    So why does this business model still pervade with smartphones? Why haven’t phone contracts evolved alongside phone technology?

    The current state of play

    In a traditional phone contract, you’re paying for two things at once – the phone itself, and the airtime/data you use. The deal was that you could spread the cost of the handset itself out into more affordable monthly chunks, an idea that became even more appealing when premium handsets hit the market and an ever-growing consumerbase blithely agreed to lock themselves into a 24-month network contract in order to afford them.

    SIM Only contracts are getting a lot more popular these days, as more and more of us catch on to just how much cheaper they really are. However, it used to be that a SIM Only contract was only something you considered if you still liked your smartphone at the end of your two-year contract, or if you had enough money to buy a handset outright. Bundled phone contracts were the only option for people who couldn’t afford to pay a lot of money upfront, or fell for the marketing that told them they were getting the phone ‘for free’.

    Where the industry is shifting to

    The good news is, have built you a better way: buying your phone and SIM separately and paying for it in a way that suits you. Taking this option means that you can mimic the benefits old-style phone contracts gave you by spreading out your phone payments into monthly instalments, but you keep full control over who you buy your airtime from and don’t end up overpaying for the phone itself.They are the only company offering this service alongside offering SIM Only contracts and truly believe that this is the best way to buy your phone. Other companies may offer one part of this option, either the phone on finance or the SIM Only deals. But are the only retailer in the marketplace that’s fully independent from the networks and therefore the only company that’s actively fighting for a shift towards benefitting the customer as opposed to the phone networks themselves.

    This new option allows you to consider the phone as you would any other piece of tech hardware: you buy whichever has the specifications to match your needs, then sell it on and replace it when a newer, cooler model hits the market. Practically speaking, it opens the floor up to more of us becoming early adopters and takes the innovation out of the hands of the select few that easily have the funds to buy a phone outright.

    Considering the phone as wholly separate from the SIM allows you more control over how you pay and what you pay for, so you get to sidestep the charges hidden in traditional phone contracts, like the eyewatering APR. It removes this outdated obstacle impeding our ability to own whatever phone we wish to, something that stimulates competition among the phone providers themselves as we move away from being a captive audience and towards becoming a savvier consumer. More than that, it dissolves the concept of waiting to be offered an upgrade by your phone provider, paying for an early upgrade or getting stuck with a phone you’ve outgrown because you’re still mid-contract.

    Considering airtime as another utility bill

    Buying a new phone within a traditional contract has so many moving parts to try and consider even after you’ve decided on the phone itself, as you have to compare tariffs and bundles that don’t necessarily correlate to each other; it’s not always a case of comparing apples to Apples, as it were. A lot of us fall into the trap of false equivalence as we look at the monthly costs of the contract we’re leaving and compare that to how much it will cost for the new phone, convincing ourselves we’re getting a good deal because we’ve fallen in love with a new handset and have gotten used to a set amount each month as our phone bill.

    According to research, there’s an awful lot of us on the wrong tariff – 92% of us, in fact - either paying for more data than we need because we thought the bundle we were offered was a bargain, or for less data than we use because that was the bundle we thought we could best afford when signing the contract, and have been hit with extra-large bills because we went over our allowance. Collectively as a nation, we waste £5.4billion a year on traditional phone contracts, which in itself should tell you that they are no longer fit for purpose and need to be replaced with a more efficient model.

    If you split out the phone and SIM deal, considering the airtime you need to buy as you would any other utility bill, it becomes much easier to shop around for the correct tariff based on our usage, or to see the benefit of switching providers when a better rate appears in the market. This is the direction that the phone industry is shifting towards, having more comparison websites designed to let you compare SIM to SIM and help you switch between providers with more ease than is currently the norm. This unshackling of phones from these outmoded phone contracts can only be of benefit to customers as it forces network providers into competing for your business instead of thinking of you as a captive audience that they only have to convince to stay with them on a biennial basis. Just imagine how much some network providers’ customer service levels would improve if you had the ability to leave because of poor service.

    The future of smartphone industry

    While on the surface, innovation within the smartphone technology itself may appear to have slowed down of late, Samsung’s recent snafu with exploding batteries has chummed the waters more than a little. Add to this Google positioning themselves slap bang in the middle of Apple and Samsung’s territorial spat and 2017 could be a fascinating year for smartphones.

    Now is the time to keep an eye out for curveballs as the three main manufacturers duke it out amongst each other while fending off competition from the likes of LG, Huawei and the sleek, affordable offerings being imported from China. Staying contract-free allows you to take advantage of these curveballs, whether they come in the form of improved software, sleeker hardware or simply slashed expenses.

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