LAST UPDATED: December 28th 2009
Tesco has been selling the iPhone in-store from December 14th. I already have articles describing the cheapest way to get an iPhone on O2, and a similar article for Orange. Both of these operator’s tariffs are quite similar. But if you’re looking for a budget or an unlimited option, then Tesco Mobile may be able to grab you on price alone.
Read on for a guide comparing the best deals for both Pay As You Go and Pay Monthly iPhones on Tesco Mobile.
PAY MONTHLY
You can choose between two tariffs, one costing £20 per month, and the other significantly more expensive at £60 per month. However, the tariff system isn’t a straight “x amount equals y minutes and z texts”.
| Cost | £20 | £60 |
| Call and text credit received | £60 | Unlimited |
So how does that work? Pretty much like Pay As You Go. Calls to any UK network at any time are charged at 20p per minute, and texts are charged at 10p. So for example, from your £60 you could make 300 minutes of calls. Or, you could send 600 texts. But it’s more likely you’ll have some combination of the two, perhaps 150 minutes and 300 texts. If you run out of credit, calls are charged at the same rate.
For budget-minded customers, this is a better monthly deal than either O2 or Orange (£29.38 for 75 minutes/125 texts on O2, and £29.36 for 150 texts/250 texts on Orange).
Tesco also allows you to choose 5 favourite numbers, on which you can half the price of calls and texts to 10p per minute and 5p per text. So if you only call a small group of people, you could push your monthly allowance to 600 minutes or 1200 texts (or with a more realistic combination, 300 minutes and 600 texts). That’s pretty decent.
Call and text usage can be monitored in real-time via a website – but I’m not sure if this is optimised for the iPhone.
There may be an up front payment, conditional on your chosen tariff and length of the contract – either 12 or 24 months. It’s worth mentioning that Tesco is the first UK operator to offer a 12 month iPhone tariff.
| Initial Cost of iPhone | |||
| iPhone version | Contract Length (months) |
Monthly Tariff | iPhone Cost |
| 8GB iPhone 3G | 12 | £20 | £222 |
| 8GB iPhone 3G | 24 | £60 | Free |
| 16GB iPhone 3GS | 12 | £20 | £320 |
| 16GB iPhone 3GS | 24 | £60 | Free |
| 32GB iPhone 3GS | 12 | £20 | £407 |
| 32GB iPhone 3GS | 24 | £60 | £50 |
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) | |||
| iPhone version | Contract Length (months) |
Monthly Cost | Total Cost |
| 8GB iPhone 3G | 12 | £20 | £462 |
| 8GB iPhone 3G | 24 | £60 | £1440 |
| 16GB iPhone 3GS | 12 | £20 | £560 |
| 16GB iPhone 3GS | 24 | £60 | £1440 |
| 32GB iPhone 3GS | 12 | £20 | £647 |
| 32GB iPhone 3GS | 24 | £60 | £1490 |
There is a question of whether TCO is a useful comparator – after all the benefit of a 24 month contract is that you get 24 months of service. However, especially now that networks are prepared to unlock iPhones once they are out of contract, you can move networks once your contract period – which is effectively a higher purchase scheme – has expired.
To me, this means that TCO indicates the cost to you to buy the iPhone outright, after which you can choose your level of monthly payment.
What can we see from this?
If you want an 8Gb iPhone 3G
Providing you can weather the up-front payment of £222, then the £20/month tariff is the cheapest way to get an iPhone in the UK at the moment. The £20 tariff over 24 months is £924, which is £516 cheaper than the £60 tariff over 24 months.
If you want a 16Gb iPhone 3GS
Providing you can weather the up-front payment of £320, then the £20/month tariff is £320 cheaper than the £60 tariff over 24 months.
If you want a 32Gb iPhone 3GS
Providing you can weather the up-front payment of £407, then the £20/month tariff is £196 cheaper than the £60 tariff over 24 months.
8Gb or 16Gb?
On a 12 month contract, the 16Gb iPhone 3GS is £98 more expensive. It’s up to you if that’s worth it.
On a 24 month contract, the 16Gb iPhone 3GS costs exactly the same as the 8Gb iPhone 3G. Go for the 16Gb 3GS.
16Gb or 32Gb?
On a 12 month contract, the 32Gb iPhone 3GS is £87 more expensive. It’s up to you if that’s worth it.
On a 12 month contract, the 32Gb iPhone 3GS is £50 more expensive. Personally, I think buying the 32Gb iPhone would be a better decision, especially if you’re planning to re-sell the iPhone at the end of the contract. But is it worth £50 to you?
12 months or 24 months?
All the £20, 12 month contracts, are quite a bit cheaper (when stretched over 24 months) than their £60, 24 month equivalents. However, you get fewer calls and texts (obviously). For me, I’m always thinking of the next iPhone, so a shorter contract means you can upgrade to the newest iPhone as soon as possible.
PAY AS YOU GO
The Tesco PAYG iPhone must be bought along with call and text credit, which can be as little as £10.
| Initial Cost of iPhone | |||
| iPhone Version | iPhone Cost | ||
| 8GB iPhone 3G | £342 | ||
| 16GB iPhone 3GS | £440 | ||
| 32GB iPhone 3GS | £538 | ||
The above prices include 12 months of wifi access through BT Openzone.
PAYG call charges are the same as for Pay Monthly, i.e. calls to any UK network at any time are charged at 20p per minute, and texts are charged at 10p. You can also choose 5 Favourite Numbers on which they will only be charged 10ppm and 5p per text.
Call and text usage can be monitored in real-time – you’ll receive a text stating your balance after every call you make.
But any call credit of £15 and over will be tripled, so £15 will get you £45 of calls.
Let’s have a look at potential Total Cost of Ownership over 12 months, during which time it can only be used with Tesco Mobile:
| Total Cost of Ownership (over 12 months) | |||
| iPhone Version | Monthly Top Up | Credit Received | Total Cost |
| 8GB iPhone 3G | £10 | £10 | £462 |
| 8GB iPhone 3G | £15 | £45 | £522 |
| 8GB iPhone 3G | £20 | £60 | £582 |
| 16GB iPhone 3GS | £10 | £10 | £560 |
| 16GB iPhone 3GS | £15 | £45 | £620 |
| 16GB iPhone 3GS | £20 | £60 | £680 |
| 32GB iPhone 3GS | £10 | £10 | £658 |
| 32GB iPhone 3GS | £15 | £45 | £718 |
| 32GB iPhone 3GS | £20 | £60 | £778 |
Pay As You Go or Pay Monthly?
If you’re planning on topping up with even the minimum of £10 per month, then over 12 months, you’re better off getting a Pay Monthly contract.
For example, you pay exactly the same for an 8Gb iPhone 3G over 12 months (£462), but get £60 worth of call credit versus £10. You don’t get the flexibility of not paying each month that you do with PAYG, but if you’re buying an iPhone, you will want to make calls on it, right? Tesco’s iPhone PAYG pricing only offers an illusory benefit, in my opinion.
Is there a way to get the iPhone any cheaper?
Not that I can find. On other networks, you can migrate to a lower tariffs, usually at halfway through the contract term. This is not the case with Tesco iPhone contracts – you have to see out the full monthly commitment for the life of the contract.
If you’re buying in-store, you can get £20 off the cost of a PAYG iPhone when you spend an additional £40. So if you’re buying one along with your weekly shop, then you can save a little more off the initial cost.
If you’re buying online, you could try a cashback site, such as Quidco, which offers 3% back on purchases from Tesco Direct. I’m not sure if it applies to iPhones though.
What’s missing from Tesco iPhones?
As I’ve already mentioned in my post “Extra details on the Tesco Mobile iPhone deal“, Tesco does not offer:
- Tethering
- Visual Voicemail
- Call Merging
That’s right, these are not included with either PAYG or Pay Monthly. They may be available at some point, but not right now.
Unlocking?
All Tesco iPhones are sold locked. PAYG phones can be unlocked after 12 months. Pay Monthly phones can be unlocked at the end of the contract. There will be a £25 charge for any unlock.
Extras with Tesco
I’ve already mentioned that you can choose 5 Favourite Numbers, which could effectively double your call credit, if you only call a small group of people.
There are also a couple of Tesco iPhone apps available, namely Tesco Finder and Tesco Wine Finder. These are available to any iPhone owner, but it does show that the company has a commitment to the platform.
Conclusion
Bear in mind that Tesco Mobile is a 50/50 joint venture with O2. So, if you’re buying a Tesco iPhone to get better coverage that O2, if won’t be any different – they run on the same network.
Overall, I think these deals are pretty good. You don’t get all the bells and whistles that you get with O2 and Orange, but if you’re looking for the cheapest iPhone tariff and you want a short contract, then I’d advise signing up with Tesco.
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Have I missed anything? Please let me know in a comment and I’ll add it to the article.