iPhone 4S Price Comparison: giffgaff Goodybags VS Contract

[kenlo]

The Apple iPhone 4S goes on general release in the UK on Friday. Sporting a new dual-core 1GHz A5 processor, an improved 8 megapixel camera, the updated iOS5 operating system and the new Siri voice control system, the iPhone 4S is set to be a big hit in the UK.

The iPhone 4S can be purchased in one of two ways: with a contract from one of the major mobile operators or without a contract when you buy directly from Apple (your iPhone will be SIM-free and unlocked). The latter route means paying more for your handset upfront but it also means you can save money by taking advantage of cheaper SIM only deals such as giffgaff goodybags. In the long run, it can often work out to be better value to go down the latter route: you can buy a SIM-free iPhone 4S directly from Apple and then use a giffgaff SIM card with a suitable giffgaff goodybag.

iPhone 4S price comparison

Mobile phone tariffs aren’t always easy to compare – the iPhone 4S in particular is available on a range of different networks and different tariffs with varying upfront costs, monthly costs and different contract lengths. The easiest way to compare tariffs is to calculate the total cost of ownership. This gives you a single figure for comparison which takes into account both upfront costs and monthly costs.

The total cost of ownership is calculated as:

Total Cost of Ownership = Upfront Cost + (Monthly Cost x Number of Months)

This figure essentially tells you how much the contract will cost over the entire 24 months of your contract (or 12 months/18 months if you’re looking at a shorter contract). In this post, we’ve calculated the “total cost of ownership” of owning the iPhone 4S on giffgaff compared to purchasing the iPhone 4S on a contract.

Light users – 200 minutes per month

If you are a light user (about 200 minutes each month), the cheapest iPhone 4S deal on contract comes from Tesco Mobile. For £235 plus £25/month, you’ll get a 16GB iPhone 4S with 250 minutes, 5000 texts and 1GB internet to use each month. The total cost of ownership over 24 months comes to £835.

For comparison, giffgaff offers the same amount of minutes for £10/month with the addition of unlimited texts and unlimited internet. A SIM-free 16GB iPhone 4S costs £499 upfront from Apple. Taking into account both the upfront and monthly costs, the total cost of ownership over 24 months is £739 – a whole £96 cheaper than the cheapest contract deal on Tesco Mobile.

The following table shows the cheapest tariffs on each network suitable for somebody making 200 minutes of calls a month. The total cost of ownership over 24 months is shown on the right of the table.

Medium users – 400 minutes per month

If you use around 400 minutes each month, giffgaff’s £15/month Goodybag offers 400 minutes, unlimited texts and unlimited internet. With £499 upfront for the 16GB iPhone 4S, the total cost of ownership over 24 months comes to £859.

For comparison, Three’s “Text 500” tariff is the cheapest contract deal. Three offer a 16GB iPhone 4S with 500 minutes, 5000 texts and 1GB internet. You’ll pay £35/month plus £49 upfront for the phone. Although you’ll pay less upfront for the phone compared to going down the SIM Only route, you’ll spend the next 24 months paying an extra £20/month compared to the giffgaff goodybag route. The total cost of ownership over 24 months of the “Three” contract is £889: £30 more than going down the SIM Only/giffgaff route.

Heavy users – 800 minutes per month

For heavier users (800 minutes per month), Three offers the 16GB iPhone 4S on “The One Plan” for £99 plus £35/month (£939 over the 24 months).

Giffgaff offers a competitive alternative with the £20/month Goodybag. After paying £499 upfront for a SIM-free 16GB iPhone 4S from Apple, the total cost of ownership over 24 months on Giffgaff is £979.

Price comparison to shorter contracts

A comparison to contracts offering at least 400 minutes over 18 months:

Note that Three, Orange and T-Mobile are not currently offering the iPhone 4S on an 18 month contract.

A comparison to contracts offering at least 400 minutes over 12 months:

Note that Three, Orange and T-Mobile are not currently offering the iPhone 4S on a 12 month contract. O2 offer 12 month contracts but only to existing customers. For this comparison, we have used O2’s 1200 minutes tariff as the total cost of ownership over 12 months (£714) is actually lower than on the 600 minute tariff (£744) and the 900 minute tariff (£754).

Giffgaffing your iPhone 4S

If you purchase your iPhone 4S directly from Apple, it won’t be locked to a network so there’s no need to unlock it. You’ll only need to unlock your iPhone if you purchased it from another mobile operator.

As the iPhone 4S accepts smaller micro-SIM cards rather than full-sized SIM cards, you’ll need to cut one of our SIM cards down to size with our Micro SIM template. Alternatively, you could order one from our microgaff community.

Once you’ve got an iPhone 4S and a giffgaff micro-SIM, check out the discussion on our community about giffgaffing your iPhone for more information on setting up your iPhone for giffgaff.

Tariff details correct as of 14th October 2011.

[stealthybigboss2]

i wouldnt swap an android for iphone love android lol!

[scottcollins]

iPhone's are the best and with the GiffGaff network you can use as much data as you like, it is one of the best.

[colr]

Thanks for this, nice little article

[lukester]

The Tesco deal doesn't look bad - more voice mins and 5000 texts is plenty for most in a month plus 1GB of data isn't bad if mostly used on wifi as well as BT openzone wifi, and only 12 month contract. Think all deals highlight how expensive the IPhone is though and whilst giffgaff is a good deal too, finding £499 up front could be the deal breaker.

[shrike]

@kenlo, My point is that that first contracted year or 2 may be a bit more expensive but, once you get through the length of the original contract then you can get free phone upgrades each year afterwards. So by year 3 you're still pay £35 a month, or £420 a year, but you can sell the old phone for maybe upwards of £400 meaning you only paid £20 for that previous year, equivalent to the £15/mth bag at gg. The cycles works where the past year is always largely offset by the sale of the old phone. O2 do this contract on a £35/month contract.

[lewisscally]

It definately works out cheaper to buy the i phone and then go with giffgaff if you ask me. Thats what I did and with giffgaff you also get peace of mind knowing that you have unlimited internet and tetxs and a 250 minute allowance for only £10 a month,

[fidgetyfish]

I've just signed up with GG, have to say it's positively risk free and the websites very intuitive making it a breeze to port over my old number, if after a few months they put they're prices up then leave, it's simple, no tie in period no risk and the phones your's. Better still if the iPhone 5 comes out within a year, sell the iphone 4s and upgrade. The other providers are going to have to up their game.

[kenlo]

@shrike Good point! However it's worth noting that in both cases you mention (O2 Contract & giffgaff SIM Only), you own the phone and can sell it. So you could sell your iPhone 4S after 24 months on giffgaff too. Here's an example:

The total amount you've spent after 24 months is:

giffgaff - £739

O2 - £898

If as in your example, you sell your iPhone 4S for £400 after 24 months (probably a bit optimistic in my opinion), the total costs drop to:

giffgaff - £339

O2 - £498

If you renewed your contract after 24 months with a "free upgrade" you're starting a new 24 month contract. At that point you can do a new price comparison between buying that new phone SIM-free and using giffgaff VS taking out a more expensive contract with a free phone. The flaw in the analysis above is that you're accounting for the "phone upgrade" as part of your iPhone 4S contract rather than part of your new renewed contract.

Hope that makes sense!

Ken

[iceqntrider]

I use this app everyday to access the giffgaff forum, while I'm at work, in my lunch hour.

It really is invaluable. I think everyone who gets an iphone, on giffgaff, should buy this app.

Absolutely brilliant! :smileyhappy:

[turkeyphant]

Yeah, without confirmation from GG that GBs won't go up in 2 years (at least) or any other tariff changes, it's hard to make a fair comparison.