How SIM Only Contracts Work
SIM Only deals and how they work
If you have heard a lot of buzz over the last few years about SIM only contracts, then you may not have considered what they actually involved. We will discuss how they work and how they could save you money in the long run.
As everyone knows, there are usually two types of mobile phone buying scenarios. You either buy a specific handset that comes with a SIM card, ready to be slotted into it. Pay As You Go or PAYG is how it’s normally described and it does as it says. After buying your mobile handset that is connected specifically to one company, you then can use the phone after you top up, or buy credit. This will normally pay for whatever services you require, whether it is talk time, texts or internet time. You pay for what you use.
The other best known method of purchasing a phone is to not only buy a handset with a SIM from a particular company, but to buy it with it exclusivity to that company. People like this option because they can often get a decent handset at a cheap initial cost, but the downside is that you will have a monthly payment, regardless of how much you use your phone. Nowadays contracts range from 12 to 24 months, with the latter becoming more of the standard time frame.
So essentially with contract phones you end up paying more than you would if you had just bought the handset outright in the first instance. This is why O2 came up with the ingenious idea of SIM only deals. This was introduced in 2007 as a way to give more flexibility back to the customer and for them to save a hefty amount of money.
They work almost immediately out of the box. You buy your mobile phone and SIM card separately and then once you have chosen your particular company, you then can decide on any length of completely flexible contracts. You could for instance commit to as little as 30 days, with a view to changing at the end of the month, without any hassle.
This works and people love it because, it gives the power back to them. The customer is fully in control and if they aren’t enjoying the 30 days with a particular company, they can get a different SIM card from a different company and try them out. So it is the ultimate in trial and error deals. It’s a win win situation, as this idea tends to drive more customers to the participating network providers, and the customer gets the aforementioned flexibility and savings.
As people are looking to distance themselves from one company and being locked down, they are choosing this way. It is also a good way for people to get a decent deal, even with bad credit. Whatever the reason, it seems like UK SIM only contracts will continue to rise in popularity over the next few years.
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