People are rejecting mobile “bundles” that include a new phone and data contract, and are increasingly turning to sim-only deals that offer better value for money.
A growing number of consumers are not getting a new phone when they change their mobile contract and are instead holding on to their existing handset or buying a secondhand one, according to analysts.
The trend towards opting for sim-only deals, which often offer more flexibility, is a reversal of the trend of recent years, when the majority of people had bundled phones and contracts.
Research from the tech analyst CCS Insight shows that more than 40% of people now have sim-only deals – more than have traditional bundled deals or pay-as-you-go plans. A decade ago, sim-only deals were far less prevalent, it says.
Joe Gardiner, an analyst at the firm, says moving to a sim-only deal allows consumers to save a significant amount of money as they don’t have to pay off the value of the bundled device.
“In 2024, 4.4m new phones were sold sim-free in the UK … because more customers are buying phones from non-carrier channels such as direct from the manufacturer, like Apple or Samsung,” he says.
So as mid-contract price rises come in for many, how can you take advantage of a sim-only deal?
Why should you change?
Although it has been the norm in the past, people are realising that buying a mobile phone and the contract for minutes and data allowance together does not usually make the best sense. As you are tied to a contract for up to two years, you are restricted when it comes to moving to a better deal, and you can be paying off the handset for three years.
At the time of writing, Vodafone was offering an iPhone 16 Pro as part of a bundle with 5GB of data and unlimited calls and texts for £37 a month. But after the cost of the phone is taken away, the usage fees were £13 a month. A sim-only deal with the telecoms firm Lebara, with similar allowances, cost £1 a month for the first seven months and £4.90 after that, as part of a deal with the website MoneySavingExpert.
Research from the comparison site Uswitch found that the savings from switching can stretch to up to £350 a year if you are happy to continue using your current phone.
“Many deals offer flexible one-month contracts with generous data allowances, so you can use your data stress-free without being tied in long-term,” says Simrat Sharma at Uswitch. “You can also get some great perks with a sim-only deal, like free EU roaming and entertainment packages.”
More people are now buying their phones straight from the manufacturer, says Gardiner. And an increased consumer focus on sustainability means the secondhand market is thriving, he says, while others simply don’t think they need to keep changing handset because improvements in successive generations of smartphones are now relatively small.
“Recent research found that the average replacement age of a mobile phone is four years,” he says.
More players, more value
There are more providers in the market for people to choose from, thanks to so-called mobile virtual network operators (MVNOs): these are third-party companies that offer services via deals with the biggest operators. Companies such as iD Mobile, giffgaff, Lycamobile and Tesco Mobile all operate on the infrastructure of the main networks such as Vodafone and O2.
These smaller players are eclipsing the bigger ones in terms of flexibility and customer service as well as price, according to a survey by the consumer group Which?
Smarty, which does not offer handsets or fixed-term contracts, came out top, followed by Voxi and Talkmobile. Which? found that while rolling contracts from the big four networks – Vodafone, O2, EE and Three – started at £19, consumers can get more data from the smaller operators in deals costing from £5.
Natalie Hitchins at Which? says: “Many offers include EU roaming and rolling monthly deals so you have the flexibility to switch and, unlike the big providers, most smaller providers don’t impose mid-contract price hikes, so you won’t have any unexpected changes to your bill.”
The best offers on the market
Uswitch reckons the best-value sim-only deal on the market is one from Talkmobile with unlimited data costing £16 a month, with a contract length of one month.
In second place was one from O2 which offers 175GB a month for £14 – but you have to sign up for a year. iD Mobile has a deal costing £9 for 108GB, again on a one-month contract. Talkmobile has a deal that costs £7.95 for 60GB, and Three has a one-year deal at £7 a month offering 40GB.
People looking at switching would be wise to focus on how much data they use – the details are available on the settings of your phone – as the amount you require may be far below the capacity you are paying for.
How to switch
Check if you are still in contract by texting “INFO” to 85075. If there are early exit fees, it will probably be sensible to wait until the end of the contract before switching.
If you are in a “split contract” deal, where the data and phone contracts end at different times, know when the usage deal finishes so that you can have the freedom to move.
Not everyone can afford to simply shell out for a new phone when they need or want one, but there are other options apart from buying via a bundled agreement. Some retailers such as Apple offer interest-free finance on repayments, and there is the possibility of using a 0% credit card. Avoid contracts that charge interest.
