Top Priorities When Choosing A New Smartphone Contract

Smartphone

Findings of a consumer survey into attitudes toward smartphone use, insurance and costs found that while 50 percent of smartphone users are committed to a two-year contract with their operators, more than a third have had to replace their handset before an upgrade was due, with the majority of these being within the first six months.

As 45 percent of consumers admitted to having no smartphone insurance, this study highlights the problems that can occur when devices are lost or damaged while still under contract.

The survey explored how consumers protect their smartphones, and how they mitigate the risk of being inconvenienced by loss of their device. Interestingly, of those consumers that have insured their mobiles, only a quarter are covered for accidental damage or loss – two of the most common grievances for smartphone owners.

Unreasonable costs (40 percent) and doubt over ambiguous policy wording (20 percent) were the primary reasons for consumers opting out of smartphone insurance. However, when a replacement is needed, 82 percent of respondents feel that current offline prices – often in excess of £500 – are simply too high, and have to settle for a basic handset instead.

There is no doubt that as a nation, we are well and truly addicted to our smartphones – the devices have become an integral part of our lives and many of us would feel lost without them. Given this dependence, it is surprising that so few consumers opt to purchase mobile insurance.

They may feel that, given the relatively large investment of a two year contract, insurance costs would stretch budgets beyond their allowance. But when something goes wrong, the cost of replacement can quickly dwarf the original price of the insurance, which is why many people have to make do with inferior handset while still forking out for the expensive smartphone tariff.

Indicating the depth of the current smartphone phenomenon, the survey also found that when buying a new phone, almost 60 percent of consumers prioritise handset model over price plan, mobile operator and contract length.

The respondents also highlighted the discrepancies between advertised costs and actual monthly bills. For instance, the average monthly cost as advertised by operators was approximately £25, whereas the average monthly bill was closer to £40 once additional calls, data and SMS were taken into account, with almost a fifth of respondents reporting monthly bills in excess of £60.

With 80 percent of survey respondents finding 24 month contracts too long, consumers need to look for an alternative to such contracts that enables them to have the freedom of the handset they want, together with the price plan that they choose. For example, consumers wanting to purchase a new iPhone currently face a costly long term contract or at least £599 when buying offline in the shop.

Shop around and the same phone is available for up to half the price and free from operator contract. During the survey, 37 percent of consumers also admitted to fears over whether a used smartphone would work properly, but most products are either fully refurbished or thoroughly tested, with a 60 day warranty – offering complete peace of mind.

The survey proves that price plan and operator come second to handset model for consumers. With that in mind, a top-end handset at a fraction of the ‘as new’ price, along with a cheaper SIM-only contract seems like the perfect marriage – particularly in the current economic climate where budgets are already stretched.

Olly Tagg is the co-founder and director of Corporate Mobile Recycling (CMR), Fonebank and SmartFoneStore. CMR was launched in 2003, with Fonebank following in 2008 and SmartFoneStore in December 2011. With CMR and Fonebank now buying 90,000 handsets a month across eight different countries, SmartFoneStore aims to provide premium used and refurbished smartphones to businesses and consumers, who cannot afford new models. In the first two weeks of trading, more than 260 handsets were sold.