Is it Worth Switching to a New Phone Contract with a Smartphone? Navigating Costs and Benefits
Is a mobile phone contract including a smartphone cost-effective or a pricey offer?
Let's cut to the chase: Are smartphone deals worth it or should you pocket the savings by buying your device separately? It's all about the numbers, and luckily for you, we've cracked the code.
Many phone plans promote themselves as bargains, offering a free or heavily discounted smartphone as part of the package. Hold up, don't be fooled! You ought to do the math to ensure you're getting the best bang for your buck. Before jumping on a bundle plan, perform a simple calculation: compare the cost of a plan without a smartphone and the lowest-priced device on the market.
According to the consumer advice portal "Finanztip," monthly plan costs without a smartphone exceeding €9 are deemed too high by experts. Typically, all-net flat-rate plans without a smartphone will cost between €5 and €9 per month, providing a sufficient data allowance for most users, from 1 GB for light users to 35 GB for heavy users. Finanztip advocates staying within this price range when considering a contract including a phone.
Sizing Up Your Savings
To compare the costs, follow these three steps:
- Calculate the average monthly price of the combo offer by:
- Multiplying the monthly base fee by 24 (the minimum contract term in months),
- Adding all costs such as one-time payments, setup fees, or shipping,
- Subtracting all discounts such as a switch bonus, and
- Dividing the total by 24. Comparison portals like "Check24.de", "Teltarif.de", or "Verivox.de" often display the average monthly price directly.
- Research the cheapest market price of the smartphone, using price comparison websites like "Geizhals.de", "Günstiger.de", or "Idealo.de." Divide the price of the smartphone (including shipping) by 24.
- Subtract the calculated smartphone value from the average monthly price.
The outcome (step 3) represents the monthly effective price of the contract without a smartphone. According to Finanztip, it's advisable to evaluate this result as follows:
- A result above €9 suggests a better deal when purchasing the phone separately.
- A result of between €5 and €9 is considered fair.
- A result below €5 is a good deal.
- A result of zero or negative indicates you're practically getting the plan for free or the smartphone is cheaper over the contract term. These outcomes are rare, but they happen!
Keep Your Options Open
Good bundle deals are worth it if you require a new smartphone. However, don't forget to cancel after the minimum contract term (usually two years) and switch to a cheaper provider to avoid long-term expenses.
Source: ntv.de, awi/dpa
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- Before deciding on a smartphone bundle deal, it's crucial to compare the cost of the plan without a smartphone against the lowest-priced device on the market, by following steps like dividing the total monthly base fee multiplied by 24, adding all costs, subtracting discounts, and dividing the total by 24.
- Consumer advice portal Finanztip recommends staying within a monthly plan cost without a smartphone of €9 or less for optimal savings, suggesting that a result above €9 indicates a better deal when buying the phone separately.
- When contemplating a contract that includes a phone, it's advised to review the result from the comparison calculation as follows: a result below €5 is a good deal, a result between €5 and €9 is considered fair, and a result of €9 or more may be more cost-effective to buy the device separately. Results of zero or negative suggest the plan is virtually free or the smartphone is cheaper over the contract term.
