When I first got my hands on a cell phone, the contract you chose didn’t have much consequence. At that time, phones were not only less advanced, but they also took much longer to “die” and required the power of a medium tank to destroy them.
But with great progress comes great irresponsibility, and the need to switch phones would soon become more common, and the issue of choosing the best phone deal would become even more pressing. Over time, this has become a more difficult conundrum, until the concept of a phone contract entered new and disturbing territory in recent days.
With the launch of the Samsung Galaxy S24, S24 Plus, and S24 Ultra, it was always likely that we’d see something that would make us turn our noses up at them, whether that was the price, the suffocatingly few design changes, or simply the never-ending war between Android and Apple, but at least in Britain a new problem has emerged.
O2, one of the four largest phone networks in the UK, has also announced the launch of new 48-month (or four-year) O2 Custom Plan contracts, in addition to the launch of pre-orders for the Samsung Galaxy S24, in a attempt to provide long-term contracts with value for its customers in an admittedly changing market. But from my perspective it’s not as great an idea as it first seems, and that doesn’t just apply to us in Britain; this could set a precedent that could even impact markets like the US in the not-so-distant countries. future.
Why so long?
The reasoning behind this move is – almost – understandable if you look purely at the existing data. See, in recent years, smartphones have started to reverse the trend we saw in the late 2000s and 2010s of smartphones sacrificing longevity for the sake of innovation. These days, phones like the Samsung Galaxy S24 range or the new Google Pixel 8 and Pixel 8 Pro are almost boastful about how long they can last, both boasting seven years of Android updates and offering specs that really make you believe the phone could last that long (even if not as a flagship).
This has led to many people keeping their phones for longer, with many now keeping their phones for over three years before upgrading; so a move to four-year contracts could make sense, right?
Four years may not seem like a long time to many, but when you put it into certain perspectives, it can suddenly seem like an eternity. If you bought your new phone when your child was born, in the UK your child would be entering the reception year of school by the time you could replace it (or in the US he would be a year out of nursery school) .
However, one of the main dilemmas that many face is the general maintenance of appliances. Four years is a long time to keep a screen scratch-free, a battery in good condition, and storage space available. Problems that would normally be resolved by a simple upgrade, or by waiting a few months until the upgrade is due. And if this contract length were to be extended beyond the more expensive flagship devices, it’s more than likely that your phone could become problematic long before your contract expires.
Does it actually save me money?
In short, not really. O2’s premise is that due to the current financial constraints, the four-year option allows people to pay less over a longer period of time; However, when you compare the plans offered to three-year alternatives from competitors, it just doesn’t add up.
Take, for example, O2’s 48-month 30GB Plus plan on the Samsung Galaxy S24, which costs £45.82/$58.25 per month. If you were to adopt this plan it would set you back just under £2,230 / $2,834.90; For comparison, a two-year unlimited data plan from Three on the Samsung Galaxy S24 would only cost you £1,320 / $1,678.06. If you were to change your plan to SIM-only after these two years, you would add a maximum of around €600/€759.90 to your costs (before the RPI/CPI increases), leaving you still around €300 better off than if you opted for a four-year subscription, with the added advantage that you have already paid off the telephone aspect of your subscription two years earlier.
Those who think a longer, cheaper contract could increase their chances of getting a premium phone with a contract are also in for a disappointment. Because the contract is in effect longer, you will have to make more payments, which puts you at greater risk in the eyes of lenders of missing payments. This could mean that for many it is actually harmful to pursue longer contracts as this will further limit the choice of phones you can opt for.
What does this all mean for the future?
One shining light from this decision from O2 is that the offer isn’t permanent, as the contracts end on March 6, but that doesn’t mean this is the last we’ll see of these types of deals.
With phone prices steadily and continuously rising, it’s more than likely that four-year contracts will soon become the norm, but right now that’s just not quite the way to go. Considering the long-term effects of increasing the length of phone contracts, for many it is likely that this contract style will only cause long-term stress, rather than the small financial relief they were intended to provide.
While O2’s new offering has certain benefits, especially if you choose to upgrade to a 48-month Plus plan, it also demonstrates the value that can come from in-depth research and consideration when it comes to choosing the best phone deal for you. and unfortunately, it’s the available alternatives that make this offering something difficult to recommend.
For those who like to keep up with the latest developments in mobile, these types of deals will also be potentially detrimental, as improvements in AI are frequent and improved with each release. Many will be left behind as new and improved features and hardware are added to devices until we reach the next lull in phone development.
What do we recommend you do?
If you’re looking for a new Samsung Galaxy S24, Galaxy S24 Plus or Galaxy S24 Ultra, there are some better alternatives depending on your circumstances.
First, think about your provider. Choosing a network can be difficult, but the right deal will leave you with your contract in a much more comfortable financial scenario. Variations on three-year contracts, such as three-year device and two-year airtime contracts, give you plenty of freedom to choose the best ways to save for you, and advances in the 5G network, as well as ever-improving benefits, make it all the more complex, but beneficial , a decision.
If your financial circumstances limit your ability to be accepted into higher contracts or more premium phones in general, you may want to consider splitting your contract in half. Get a one-month SIM-only deal with an MVNO (Mobile Virtual Network Operator) and link it to the device of your choice with a financing plan from elsewhere. Breaking your contract into smaller payments, even though they are equally (or more expensive), can make it easier for you to get accepted for the contracts you need. If you have a manufacturer you prefer in the long term, it may also be worth investigating manufacturer-specific financing deals, such as Samsung Flex, which offer competitive rates, with the option to upgrade your device when the next model comes true.