To cut the cost of calls and texts, first unlock your mobile

With Ikea and Tesco entering the market, Emma Lunn investigates the attraction of SIM-only deals

Mobile users could double the inclusive call minutes and texts they get for their monthly outlay by switching to a SIM-only tariff, say experts.

The past few months have seen a major push on SIM-only deals from all the main networks, as well as new entrants to the market, including some of the high street's biggest names, such as Ikea and Tesco.

Ikea's SIM-only offer is called Family Mobile. The tariff is open to people who join the Ikea Family, which provides a range of in-store discounts. Family Mobile customers are given a free SIM card with £5 worth of credit. Thereafter, UK calls cost 9p per minute and texts 6p, routed over the T-Mobile network.

Tesco's SIM-only pay-as-you-go deal costs just £2.47 for the SIM card. Calls are then 20p per minute and texts 10p each, or half these prices to your five favourite numbers. You also get 500 texts or 150 free minutes if you top up with £15 or more each month.

As the name suggests, a standard SIM-only deal gives you a SIM, or Subscriber Identity Module, card only – you have to provide your own handset. The card is used to store data such as a customer's mobile phone number and address book contact information, allowing users to transfer their phone numbers and contacts to new phones simply by removing it from one phone and inserting it in another.

SIM-only deals are relatively cheap for networks to offer because they don't have to subsidise the cost of supplying a handset with increased line rental.

Research from the consumer magazine Which? shows that someone switching to a SIM-only mobile phone deal can save up to £15 a month – £180 a year – on equivalent contract deals. The price comparison site moneysupermarket.com says users can double their inclusive allowance of minutes and texts by going SIM-only.

Ernest Doku, technology editor at the mobile phone comparison site OMIO.com, says: "SIM-only mobile deals generally come with excellent tariffs and offer great flexibility, such as allowing people to keep their existing number and phone, and requiring them to give only 30 days' notice before moving to another provider.

"They're a good option for someone whose contract is at an end and who is hanging around for a new handset to be released, or for people who are simply getting poor value from their current provider."

SIM-only deals can either be pay-as-you-go or on a monthly contract, although these usually tie you in for only a month at a time.

Mr Doku identifies the best SIM-only monthly deals as those from Vodafone and O2. Vodafone will give SIM-only customers ordering online 600 minutes and unlimited texts for £20 a month. O2's Simplicity range includes a £30-per-month deal, which gives users 1,200 minutes a month, 1,000 texts and unlimited O2 to O2 calls.

These deals are much cheaper than monthly contracts where a handset is included. For example, O2's best online tariff costs £35 a month and gives you 600 minutes – half the number you get on the network's SIM-only deal. And while you do get 1,000 texts a month and unlimited O2 to O2 calls, you also have to sign up for 18 months, although you are given a choice of new handsets.

With all monthly contracts, users will have to pay for calls and texts in excess of the agreed limits. It's also worth checking whether voicemail is included – at T-Mobile, for example, customers are charged 12p a minute to get their messages. But if you have a SIM-only deal and start to exceed your monthly minutes or texts allowance, there's nothing to stop you upgrading to a bigger package. If you want to leave altogether, you will usually have to give only 30 days' notice.

"The downside to SIM-only contracts," says Mr Doku, "is that you have to have a mobile phone in the first place, which will obviously cost you unless you are happy with an old phone from a previous contract. But people on a budget can always look to sites like eBay, where they can potentially pick up a cool new handset for a good price."

You will also need to make sure your handset is "unlocked" before opting for a SIM-only deal. When you purchase or are given a handset it will be "locked" on to a certain network and won't accept SIM cards from rival networks until it is unlocked. Your current provider may be able to unlock the handset for you or you could try a high-street phone shop, which will do it for a small fee, usually no more than £5.

A new handset can cost as little as £15 if you want something pretty basic, such as the Motorola Motorfone F3, and there are several Nokia handsets for under £30. A top-of-the-range phone will set you back more, though; the Nokia 8600 Luna, for example, with a camera, radio, MP3 player and Bluetooth, costs around £300.

James Parker, commercial manager of mobiles at moneysupermarket.com, says that in today's difficult financial climate, people are becoming more focused on their expenses and, as a result, SIM-only deals are growing in popularity.

"However," he adds, "it is worth bearing in mind that these deals aren't for everyone. A SIM-only deal is just that – there is no handset included, not even a basic one. Consumers must either use a handset they already have or buy one separately."

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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