Sim Only Deals Explained

Posted by Steve on the 1st June 2010 | Topics: Guides

Making the switch to a Sim Only Deal can signal the end of being tied into long contracts and can save you a stack of cash. As the name suggests, a sim only deal provides you with a sim card contract without a mobile handset, whereas standard mobile contracts offer the customer both a sim card and a mobile handset for a fixed minimum term of around 12 to 24 months.

Sim only deals, on the other hand, do not tie customers down to lengthy contracts, and all major mobile networks provide plans with a minimum contract length of just 30 days. By providing sim only plans, operators do not need to cover the cost of supplying a new handset, so the cost saving is passed on to the customer through cheaper tariffs, more inclusive minutes and texts, and many other services such as mobile internet and international calls.

When Were Sim Only Deals Introduced?

Sim only deals were introduced by O2 in April 2007 as a more affordable and flexible alternative to long-term mobile phone contracts – a move that was very quickly copied by all the major operators. According to market sales analyst, GfK Group, sales of SIM only contracts soared by an enormous 95.9 per cent between January 2008 and January 2009, and sim only contracts now represent 20 per cent of all new mobile connections in the UK.

How Do They Work?

Sim only contracts are designed to work straight out of the box: the customer signs up to a new sim only plan, slots the sim card into a mobile phone and then registers it with the network. Customers can sign up to 30 day rolling contracts (or 12 and 18 months options) with any one of the major network providers: Vodafone, T-Mobile, Orange, O2, Virgin or Three. As a sim only customer, you can expect to enjoy plenty of inclusive texts and talk-time from as little as £10 per month. Furthermore, all of the major networks provide the sim cards free of charge.

What Benefits Are Provided by SIM Only Deals?

There are several advantages to choosing sim only deals over standard monthly contracts:

Flexibility - Unlike conventional mobile contracts, customers can sign up to 30 day rolling contracts. This means that you are no longer locked in to an expensive lengthy contract and have the freedom to switch deals or networks as often as you like. With a sim only deal, you have the flexibility of pay-as-you-go with the convenience of being on a pay monthly plan – you will never need to top up your credit again.

Value for Money - Sim only deals are significantly cheaper than conventional mobile contracts. When taking out a new sim only deal, you can expect more minutes, more texts (unlimited with most) and lots of other goodies such as mobile internet. If you spot another sim only deal that looks more attractive, simply switch!

Multiple Tariffs - With networks competing so heavily in the sim only market place, there are oodles of monthly price plans to suit all budgets, and networks offer lots of incentives to new and existing customers. If you're unsure what's best, you can test which deal is right for you without committing yourself to any one particular network. If you need more bang for your buck, simply switch!

Credit Problems? - Sim only contracts are more readily available to customers than conventional mobile deals. You will still need to be credit scored, but because of the shorter contracts you are far more likely to be accepted if you have had a poor credit rating in the past. This also makes sim only deals more attractive to younger customers who have a limited credit history. Credit companies like to see lots of green ticks as it indicates sensible management on your report. A sim only contract, paid in full month after month, goes towards proving you are a responsible borrower.

Environmentally Friendly

Every time a mobile phone is disposed, special practices have to be put into place to avoid contamination and pollution of ground water. By reusing your mobile phone with a new sim only contract, consumers can reduce their ecological footprint and help preserve the environment while saving money into the bargain.

Can I Keep My Number?

Yes. Customers who wish to keep their existing mobile phone number can ‘port’ their number when switching to a new network. Provided you have completed your contract, all you need to do is obtain a PAC (Porting Authorisation Code) from your existing provider before cancelling the contract. The PAC must then be quoted to the new service provider who will then deal with the transfer. The whole process should take no longer than 3 to 5 days.

If you plan to use a locked handset with sim only deal from a different network you will need to ensure your phone is unlocked and free to use any network. With conventional mobile contracts, the phone is usually locked to the network that supplied it. However, you can usually unlock the phone free of charge by contacting your network. Most high street shops will be able to unlock your phone for a nominal charge of around £5-£10, and there are a number of websites that offer unlocking for a small fee.

What Does The Future Hold for SIM Only Deals?

Sim only deals have become well established in the mobile phone market as networks continue to seek new ways of attracting customers. Several years ago, sim only contracts were new, untested and relatively expensive. Nowadays, sim only deals are the cost effective choice and this upward trend is likely to continue long into the future.