People are moving away from mobile “bundles” that include a new phone and data contract and are increasingly turning to SIM-only deals that offer better value for money.
Analysts say a growing number of consumers are not getting a new phone when switching mobile contracts and are instead keeping their existing phone or buying a used one.
The trend towards choosing SIM-only deals, which often offer greater flexibility, is a reversal of the trend of recent years, when most people had bundled phones and contracts.
Research from tech analyst CCS Insight shows that more than 40% of people now have SIM-only deals – more than have traditional bundle deals or pay-as-you-go plans. Ten years ago, SIM-only deals were much less common, he says.
Joe Gardiner, an analyst at the company, says switching to a SIM-only deal saves consumers a significant amount of money because they don’t have to pay the cost of a bundled device.
“There were 4.4 million new SIM-free phones sold in the UK in 2024… because more customers are buying phones through non-carrier channels, such as direct from the manufacturer such as Apple or Samsung,” he says.
So, with prices expected to rise mid-contract for many, how can you take advantage of a SIM-only deal?
Why should you change?
While this has been the norm in the past, people are realizing that buying a mobile phone and a contract for minutes and data together usually doesn’t make the best sense. Because you’re locked into a contract for up to two years, you’re limited to upgrading to a better deal and can pay off the phone over three years.
At the time of writing, Vodafone is offering the iPhone 16 Pro as part of a bundle with 5GB of data and unlimited calls and texts for £37 per month. But after the cost of the phone was deducted, the usage fee was £13 a month. A SIM-only deal with telecoms firm Lebara, with similar premiums, cost £1 a month for the first seven months and £4.90 thereafter as part of a deal with website MoneySavingExpert.
Research from comparison site Uswitch found that savings from switching could be up to £350 a year if you’re willing to stick with your current phone.
“Many deals offer flexible monthly contracts with generous data limits, so you can use your data stress-free without committing to the long term,” says Simrat Sharma of Uswitch. “You can also get great SIM-only benefits, such as free EU roaming and entertainment packages.”
More people are now buying phones directly from the manufacturer, Gardiner said. Consumers’ increased focus on sustainability means the used smartphone market is thriving, while others simply don’t think they need to keep switching phones because improvements in subsequent generations of smartphones are now relatively small, he said.
“Recent studies have shown that the average time to replace a mobile phone is four years,” he says.
More players, more value
There are more providers on the market for people to choose from thanks to so-called mobile virtual network operators (MVNOs): third-party companies that offer services through deals with the major operators. Companies such as iD Mobile, giffgaff, Lycamobile and Tesco Mobile operate on the infrastructure of major networks such as Vodafone and O2.
According to a survey by consumer group Which? These smaller players dwarf the larger ones in terms of flexibility and customer service, as well as pricing.
Smarty, which does not offer mobile phones or fixed-term contracts, was in first place, followed by Voxi and Talkmobile. Which? found that while rolling contracts with the big four networks – Vodafone, O2, EE and Three – start from £19, consumers can get more data from smaller operators with deals starting from £5.
Natalie Hitchins at Which? says: “Many deals include EU roaming and monthly deals, so you have the option to switch, and unlike the big providers, most smaller providers don’t require price increases mid-contract, so you won’t have any surprise changes to your bill.”
The best offers on the market
Uswitch believes the best SIM-only deal on the market is Talkmobile’s unlimited data offer at £16 per month with a one-month contract.
In second place was O2, which offers 175GB per month for £14 but requires a yearly subscription. iD Mobile has a £9 offer for 108GB, again on a monthly contract. Talkmobile has a contract priced at £7.95 for 60GB, while Three has an annual contract priced at £7 per month offering 40GB.
People considering switching would be wise to focus on how much data they’re using (details available in your phone’s settings), as the amount required may be much lower than the capacity you’re paying for.
How to switch
Check to see if you’re still on contract by texting “INFO” to 85075. If there’s an early exit fee, it’s probably wise to wait until your contract ends before switching.
If you’re on a “split contract” deal where your data and phone contracts end at different times, know when your usage deal ends so you have flexibility to move around.
Not everyone can afford to simply shell out for a new phone when they want or need it, but there are other options than buying it as a bundle deal. Some retailers, such as Apple, offer interest-free financing when you pay off your loan, and there is also the option of using a credit card with a 0% interest rate. Avoid contracts that charge interest.