Buying phone = far more upfront cost, it can be the difference between paying £0 and £200 or £90 (rough phone price on contract if it's high-end) and £400-500 (iPhone 5 / most high-end Android phone outright prices)
But, buying up front means you'll pay less in the long run, but even then depending on the phone you may only end up spending an extra few hundred £££ which over 24 months is not that big a deal, getting the phone far cheaper or for free upfront is mighty enticing, sometimes you can get other stuff too such as free consoles.
I imagine it'd be kind of similar to the U.S, but I hear you guys get fucked over by SMS plans and nearly all phones being on contract only.
Well you have to do the Math yourself. basically If you have some sort of awesome third party simcard that costs you like £5 a month for everything you need. However you want a cool phone to go with it. Then it will be worth your time to buy it outright. The math is.
(Cost of contract per month * length of contract in months) + cost of phone.
versus
Cost of whatever sim card pay as you go deal you have per month * length of time you are going to keep the phone) + cost of the phone.
That's your cost benefit analysis right there. Other factor to consider is the sheer smug awesomeness of just being able to do whatever you want. Pick any sim card deal any time you feel like it. Stick it to those fuckers. yeah.
Other things to consider. Can you afford £500+ outright to buy the phone? I know I can't right now. However I can afford my contract at £20 a month.
Is there any benefit to paying the full retail price for a phone? Do you get access to better plans? Or is signing a contract okay?
Contract = Subsidized Pricing on a phone but you are then stuck with no upgrade from anywhere from 20months *sprint* to exactly 24months *verizon*. The plans are the same, pricing is alot less on the initial device but thats why there is a contract for 2 years to pay it off and to force you to pay alot to leave early.
Full retail = No contract, expensive one time payment, Can upgrade later if needed since you did not use it originally. Can leave your carrier whenever you wish, BUT if your phone is not GSM then it wont work with other carriers.
Of course this only works in the US as I dont know how phones work in other countries besides the fact that most of the time its non-contract pricing.
A few contracts are actually good value- I pay £30 a month for my Galaxy S3 on 3 with unlimited everything. When you take away the cost of the phone when I signed (450) from the overall cost on the contract (720 over 24 months) I'm only paying £11.25 a month for unlimited data, texts and thousands of minutes.
With the contract plans I've looked at you usually end up paying 5-10% interest on your phone. In the case of something like an iPhone this can end up being as much as 100 euros during two years.
I've always bought my phones at full retail price and then made providers compete for my data/cellular plan. I just changed providers again a few months ago, and got a 10 euro drop in my phone bill while at the same time making a jump from 3G to LTE.
It seems like it's really hard to buy phones off-contract in the US and that makes me sad.
If you can't afford a phone at full price, you should not buy a phone at all. If you do the math, you'll see that it's way cheaper in the long run. Buying through contract just helps your cell provider making money.
Other than the attractiveness of being able to switch carriers on a whim, I've yet to see an advantage in the USA for not signing a contract. The carriers don't offer different plans if you are off-contract and they still require data plans for smartphones and iphones. Since I have no desire to switch carriers, I just re-up, every couple of years and get my new, cheapish phone.
I personally always sign a contract simply because I can't afford to pay the phone outright. Of course they will take a tip out of it but the fact remain that it's the only way for me to get it.
So really it's up to you, if you can afford the phone cost, then by all means do so, you'll feel free to do whatever you want with your phone and change the provider anytime you want. But if you can't afford it, then contract it is.
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