If you’re thinking about buying an iPhone on O2, there is a page on Martin Lewis’ MoneySavingExpert site that looks at the monthly tariffs. But it’s well out-of-date now, so I’ve put together a quick guide highlighting the total cost of ownership.
Read on for the cheapest way to get your hands on Apple’s shiny mobile, short of nicking it!
There are four tariff bands at the moment.
| Cost | £29.38 | £34.26 | £44.05 | £73.41 |
| Minutes | 75 | 600 | 1200 | 3000 |
| Texts | 125 | 500 | 500 | 500 |
All minutes are cross-network, and tariffs include unlimited voicemail and data. Depending on your chosen tariff and length of the contract (either 18 or 24 months), there may be an up front payment.
| Initial Cost of iPhone | Monthly Tariff | ||||
| iPhone version | Contract Length | £29.38 | £34.26 | £44.05 | £73.41 |
| 8GB iPhone 3G | 18 | £96.89 | £96.89 | - | - |
| 8GB iPhone 3G | 24 | £96.89 | - | - | - |
| 16GB iPhone 3G | 18 | £155.61 | £155.61 | £57.74 | - |
| 16GB iPhone 3G | 24 | £155.61 | £57.74 | - | - |
Adding the initial cost of the phone to the monthly tariff (over the life of the contract), the total cost of ownership for each model of iPhone is as follows:
| Total Cost of Ownership (over the length of the contract) |
Monthly Tariff | ||||
| iPhone version | Contract Length | £29.38 | £34.26 | £44.05 | £73.41 |
| 8GB iPhone 3G | 18 | £625.73 | £713.57 | £792.90 | £1,321.38 |
| 8GB iPhone 3G | 24 | £802.01 | £822.24 | £1,057.20 | £1,761.84 |
| 16GB iPhone 3G | 18 | £684.45 | £772.29 | £850.64 | £1,321.38 |
| 16GB iPhone 3G | 24 | £860.73 | £879.98 | £1,057.20 | £1,761.84 |
What can we see from this?
If you want an 8Gb iPhone
- Providing you can weather the up-front payment of £96, there’s no benefit at all in taking a 24-month contract. TCO is lower with an 18-month contract.
If you want a 16Gb iPhone
- Providing you can weather the up-front payment of £57 or £155, there’s no benefit at all in taking a 24-month contract. TCO is lower with an 18-month contract.
8Gb or 16Gb?
- You’re better off getting a 16Gb. A 16Gb iPhone is cheaper (in some cases significantly cheaper) over the life of an 18 month contract compared to an 8Gb iPhone over a 24 month contract. You can take a 16Gb (with an initial payment) on an 18 month contract, and it’s cheaper than an 8Gb on 24 month every time. The only exception is on the £73.41 tariff, where there is no TCO price difference.
How to have your iPhone a bit cheaper
But here’s a neat little trick. O2 Terms and Conditions allow you to drop your tariff by one tariff band after 9 months. Presuming you have enough minutes and texts on a cheaper bundle, you could (for example) drop down from the £73.41 tariff to the £44.05 tariff.
| Total Cost of Ownership (dropping tariff at 9 months) |
Starting Monthly Tariff | ||||
| iPhone version | Contract Length | £29.38 | £34.26 | £44.05 | £73.41 |
| 8GB iPhone 3G | 18 | N/A (can’t drop down) | £669.65 | £704.79 | £1,057.14 |
| 8GB iPhone 3G | 24 | £778.32 | £969.09 | £1,497.60 | |
| 16GB iPhone 3G | 18 | £728.37 | £762.53 | £1,057.14 | |
| 16GB iPhone 3G | 24 | £836.06 | £969.09 | £1,497.60 | |
The above table shows “monthly tariff” as the starting tariff when you sign up for the contract, and assumes you drop down by one tariff band for the remaining term of the contract, e.g. You sign up for an 18-month £44.05 monthly tariff, choosing an 8Gb iPhone , then after 9 months, drop down to £34.26. TCO over this contract length will be £669.65.
Savings over the contract term, compared to sticking with your starting monthly tariff, are therefore:
| Savings (dropping tariff at 9 months) |
Starting Monthly Tariff | ||||
| iPhone version | Contract Length | £29.38 | £34.26 | £44.05 | £73.41 |
| 8GB iPhone 3G | 18 | N/A (can’t drop down) | £43.92 | £88.11 | £264.24 |
| 8GB iPhone 3G | 24 | £43.92 | £88.11 | £264.24 | |
| 16GB iPhone 3G | 18 | £43.92 | £88.11 | £264.24 | |
| 16GB iPhone 3G | 24 | £43.92 | £88.11 | £264.24 | |
Is there any way to get it cheaper?
Yep, there’s one more way – Affinity deals. O2 provides mobile phone service to several large corporate firms, and has offered a “friends and family” deal to their employees. So, if you know someone who works for Lloyds TSB, McDonalds, Network Rail (and one other I can’t remember, sorry) then you can get 30% off monthly tariffs. That’s not just for iPhones, it’s 30% off any O2 tariff, and it’s valid for upgrades as well as new contracts.
The new iPhone
All of this is likely to change when the new iPhone is released in June or July. I expect tariffs will change then, especially if the iPhone becomes available on other networks in the UK. I’ll update this guide when we know more.
I got my iphone 3G last august on the £45 a month tarrif, however, thanks to my bro working at o2 I only pay about £30 + I got the phone for free. Granted its just the 8gb model but I never use up the whole memory neway.
Btw r ur figures correct? Technically im on a 45 a month deal but I only get 500 mins and 600 txts. Have these figures changed recently?
really good to know tuanks for posting this!
Regarding above poster, I’m on the 45/month deal and get 1200/500 though i’d happily trade in those mins for more txts
The tariffs are straight off the O2 site; they’re also the same as what I’m paying – I’m not on the £34/mo 600 Mins and 500 texts bundle.
As a staff friends deal, you may be on a different tariff. I don’t have any info on those – maybe you could ask your brother?
Cheers
I’m looking at getting an iPhone and this 30% discount would make it much easier to justify the cost! A friend of mine works for Lloyds TSB and says she’ll help me out if she can, so could somebody tell me how you go about getting this discount?
Thanks a lot x
Jonny, the deal’s called “O2 Open”. Your friend will either be able to get a card or a code from somewhere at work (check the corporate intranet), then accompany you in-store when you sign up, in order to get the discount.
Also: there’s a deal on at the moment with cashback website Quidco, giving you £45 on any iPhone contract taken out with Carphone Warehouse.
Check it out here: http://www.quidco.com/mobiles-utilities/carphone-warehouse/
Cheers Matt, she’s looked it up and got the code, I’ll be getting my iPhone in the next week hopefully
This little deal should save me over £200 over the course of the contract, so thanks a lot for flagging it up!
What about buying a new iphone 3g 8gb from ebay for circa £300-340, and then signing up to an O2 sim only contract?
Isn’t this the cheapest method of all?
True enough – you could get a SIM-only deal on a 12 month contract. £19.58/month will get you 800 mins and 1600 texts, plus an unlimited Web bolt-on (data). Add the cost of an unlocked iPhone 3G from eBay (say £320), and you’re looking at £555 for 12 months.
But it all depends on how the iPhone was unlocked. If it’s an unofficial unlock, then the average user will be stuffed when they update through iTunes and their phone is re-locked. I think buying your own and going SIM-only is a route for the customer who’s happier with a bit of technical tinkering. Not a bad option though, if you know what you’re doing.
I knew that if someone works for mcdonald they can get 30% discount in Iphone tarrife. and they can get discount up to 5 contract.
But is that nacessary to buy conntract on that person who working for Mcdonald or I can just take on my name under his/her discount.
thanks if u help me on that.
Sanket
The contract can be taken out in your name, but your friend will have to accompany you in-store when you get your iPhone, in order to get the 30% discount. They will need the O2 Open code and their work ID.
This discount cannot be applied online – it’s in-store only.
hii i took an iphone with a 35£ tarrif
can i get a discount about 30 percent of that as i m going to put a mc donalds offer of my frnd whos going to join in a week but he got a discount card before joining.
thanks matt adford,
i got your point.
i will do it now.
Yesh – you can’t get a discount on an existing contract, unless you’re upgrading.
Sanket – you’re welcome
Thanks Matt .
Ya i need to upgrade now.