Are contracts a bad deal?

richpb7

Hi all,

I've been with Orange for a long-long time now - probably about 15 years if memory serves. I thought it was time to try the "batter down your contract" lark and sure enough they offered me the phone I wanted for free rather than £80 and increased my text allowance. But it made me wonder whether my monthly pay plan with Orange was really any better than my girlfriends pay-as-you-go with Virgin ...

I've worked out that in November 2004 if I was with Virgin I would have spent half what my contract with Orange cost, and that was a pretty standard month for me, including voice to many networks, texts and data via GPRS. By my calculations I'm paying about 32 pence per minute for Orange, when Virgin, for example, would only charge 15 pence per minute initially and then only 5 pence per minute.

Am I missing something or do these monthly contract deals suck?

Rich Osborne

andy88_2

Orange was launched in May 1994.

It depends on your contract really; if you get special offers or cashbacks to start with, good. But if you then stay there ... who knows?

Irishorangutan

again i think it depends on the person and what you get out of it. I was on 02 for years, then switched to 3. Better price, much worse service, although o2 wasn't all that hot.

Then i got one of these free sims with 300 texts a month, and, although i call less from my mobile, you'd be amazed how much i'm saving, and how little i need to use my phone. plus loads of free texts!!

gk172

I started on pagt and had one for about 2 years (various networks) putting sometimes £30 a month in then i noticed a deal 1000 off peak mins for £9.99 a month and a free phone this is when my opinion changed i got all this talk time and a free phone for much less than i was spending, then i realised most of my calls were peak so i jumped to a 100 mins anytime contract again free phone and only £20 a month and then found certain networks rollover unused mins and i stay with them now as i dont loose mins i havent used as some moths i can use more than allowance but that is covered by whats rolled over. And latest contract is ideal 100 mins 50 texts for £15 a month ok i paid £25 for the phone but on that low a tariff i cant complain and the mins rollover, so looking back from payt to now i am far better off with contract than i was buying a handset then topping up.

grumbler

richpb7 wrote:

...Virgin, for example, would only charge 15 pence per minute initially and then only 5 pence per minute...

As far as I know 15/5p is only for landlines and the same network calls. Cross-network calls are 35p, but you can cut this to flat 15p.

I do not use my mobile a lot and use PAYG though.
There was some message here recently about good PAYG rates at TESCO mobile.

Umer

If you are like me and you spend around 400 mins on calls (per month) to other mobiles, contracts are really the only option. The good thing about them though is that you often get a free phone or cashback in order to help bring the cost down, and with the ability to port you number between networks - if you don't get a good offer on an upgrade you can simply just find another network.

Beninio88

When you are on a contract, a portion of your monthly bill goes towards paying for the handset. Thats why they are cheaper (a lot cheaper if you look at the top end handsets) then the handsets on PAYG. Have you included this factor in your sums?
For example:
On virgin mobile a a Sony Ericsson K700i cost £199.99. This comes with £30 of credit. Total cost could be £229.99
On Orange contract you can get the same phone for FREE if you pay £25 a month which gives 120 min EACH MONTH . Total cost for the year could be £300 but gives you a lot, lot more "credit".
It all depends on how much you use your phone I guess, and if you want a new handset every year. Even if you are happy with your old handset you could always get a new one and sell it, saving you even more money.

richpb7

Interesting replies - many thanks. I hadn't spotted that most Virgin calls are at 35 pence - that's rather well hidden in their long list of tariffs. One thing I did find out though is that Orange charge twice as much when you're in Europe compared to Virgin, £1.20 per minute as opposed to £0.60 per minute.

I'm certainly learning that the pricing structure's that these companies use seem to be designed to confuse the hell out of customers and make comparisons as difficult as possible!

The cost of phone isn't really an issue at the moment, as I'm quite happy to keep my mpx200 and just drop in another SIM.

normski_2

I'm having the same thoughts as my wife needs a new phone. Totally agree with Beninio88, you have to factor in the cost of the phone. I have generally found that the batteries only last a couple of years so historically we've had a contract for twelve months (cheapest going, cashback etc.) and then put a PAYG sim in for the second year. After two years we find a new contract to get a new phone and start again.

Can't see anything much better than the Sony Erricson T610 at talkworldonline at the moment. The same phone will cost you £89.97 from Tesco.com and that before any calls.

Happy hunting

Normski

andy88_2

richpb7 wrote:

One thing I did find out though is that Orange charge twice as much when you're in Europe compared to Virgin, £1.20 per minute as opposed to £0.60 per minute.

Both depend on whether you're on prepaid or postpaid. Your comparison should be 70 v 60 or 120 vs 95. All Virgin calls are 1 min minimum charge

richpb7

Well I don't want to start an argument here, but here's exactly what it says on their websites:

Virgin PAYG w. Direct Debit
Making a call £0.60
Receiving a call £0.30
Sending a text message £0.25

Virgin PAYG wout. Direct Debit
Making a call £0.95
Receiving a call £0.60
Sending a text message £0.35

Orange PAYG
Making a call £1.20
Receiving a call £0.60
Sending a text message £0.40

Whatever you say Orange is a bad deal. Virgin specify that there is a 1 minute minimum charge on the appropriate page of their website. Orange do not give an indication as to what their policy is on their website page.