independent

Friday 18 April 2014

Calculate total phone cost before signing up

Technology Editor Adrian Weckler helps us to understand the bewildering array of contract plans and data charges

It all adds up: Price for Samsung Galaxy S4 varies widely

Phablets, 4G, data charges: for business folk looking for operator value with their shiny new smartphone, the choice can be a little confusing.

Whereas companies used to negotiate directly with mobile operators on behalf of staff, an increasing number are now mandating their workers to get the best plan available, which is then covered in expenses.

This leads the working man and woman into the byzantine world of contract plans. But a bit of research will pay off: there are large variations in price out there. Here is a plain English guide to which plans offer the best value and what the main factors are.

Low monthly contract Vs 'free' phone upfront

One of the big factors influencing the overall cost of a smartphone is whether you opt for a 'free' (or low-cost) phone as part of the plan. In general, the more you pay for the phone up front, the cheaper the overall package is.

For example, to get a Samsung Galaxy S4 on a 24-month contract from Tesco Mobile (which uses O2's network) costs €310 upfront. By comparison, a similar deal from Vodafone gives you the handset for free.

But over the 24-month contract period that each requires, the Tesco Mobile deal is a whopping €770 cheaper than Vodafone (€1,030 for Tesco versus €1,800 for Vodafone). It's a similar story – though at much less pronounced price differences – between Meteor (€50 upfront and €1,465 over two years) and 3 Ireland (€90 upfront and €1,122 over two years). The lesson here is that if you can afford to stump up cash from the beginning towards the cost of the phone, you will generally pay less over the term of the contract.

The Established vs 'challenger' brands

A definite factor influencing price is how much business the operator already has.

Generally, Vodafone and O2 are the most expensive options when looking for monthly contract plans. This is not unrelated to the fact that they have over 70 per cent of the market between them. For business accounts, it is closer to 90 per cent of the market.

A good illustration of this is O2 and Tesco Mobile. Both use O2's network, but Tesco, with just 3 per cent of the market here, is almost always significantly cheaper than O2, which has 10 times as many customers.

The 'network coverage' premium

Aside from the 'free phone' argument, one argument that the more expensive operators make is that they have invested more in their networks. To be fair, there is some truth in this.

For example, Vodafone – cited as the most expensive plan in our table – has probably invested more in its Irish network over the past three years than its main rivals. The company claims that this equates to somewhere in the region of €500m. For business users in particular, this should translate into slightly better, more reliable coverage both in cities and around the country. Thus, it may be argued that a premium can be justified.

It's a similar situation for 4G. Only Meteor and Vodafone are aggressively pushing 4G in the market. For those looking for best smartphone connections, it's not unreasonable that there would be a slight premium attached.

Value for money in data

Data is one of the emerging flashpoint issues, especially with the advent of 4G.

While many may simply tinker with checking email or light browsing sessions now, that will probably change as more and more data-heavy services come on stream. At the moment, by far the best value resides with the 'challenger' brands of 3 and Tesco Mobile, each of which guarantees a decent 15GB of monthly data at reasonable tariffs. The bigger players have not yet compromised on this – so watch out if you're a heavy data user.

Sunday Independent

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