Modern phones at incredibly attractive prices – these are the slogans mobile network operators use to lure us in. Many of us decide to sign a contract precisely because of a new smartphone at a good price. However, it's worth remembering that there's no such thing as a free lunch. It might turn out that you'll pay more for a phone from an operator than in an electronics store, because its price isn't just the fee you pay when signing the contract, but also a portion of the costs hidden in your monthly payments.
We took a closer look at three top smartphones offered with a contract and compared them to prices in stores, and it turned out that in these cases, a contract isn't worth it.
We start our calculations with operator offers
When you plan to buy a new phone with a contract, it's worth comparing its cost with an offer without a phone that matches your chosen parameters. This allows you to calculate the real cost of the phone service you'll be using. The remainder, in the case of a contract, is part of the cost of the new smartphone, which should be added to the price of the phone stated by the operator. In this situation, we don't recommend comparing an offer with and without a phone from the same operator – just like in a pizzeria, a small pizza is never the best value, the same applies here; offers are structured to encourage you to choose the more "loaded" option.
For our calculations, we used a contract with a phone from one of the top Polish operators and the Mobile Vikings pay-as-you-go offer, which we will use to deduct the cost of the phone service from the contract price. These offers were available on December 28, 2015.
It's easy to see that in the case of the contract, 36% is the cost of the service, and the remaining 64% is the price of the smartphone, meaning we add 1223.76 PLN to the chosen phone over the 24 months of the contract. Of course, you should also add the upfront cost of the phone when signing the contract – in this case, it is:
Microsoft Lumia 950 LTE – operator cost 1729 PLN + 1223.76 PLN in the contract
Sony Xperia Z5 Dual – operator cost 2229 PLN + 1223.76 PLN in the contract
Samsung Galaxy S6 Edge Plus – operator cost 2629 PLN + 1223.76 PLN in the contract
Next up, the cost of buying a phone in a store
A good way to check the cost of a smartphone in a store is to use online comparison websites, such as Ceneo, Nokaut, or Skąpiec. It's worth knowing the price at which the model you're interested in is sold and realizing that it's often cheaper online than in physical stores.
We chose the Ceneo comparison engine and found the most attractive prices for the smartphones that are available in contract offers. This data is also from December 28, 2015.
Microsoft Lumia 950 LTE – in stores from 2403 PLN
Sony Xperia Z5 Dual – in stores from 2619 PLN
Samsung Galaxy S6 Edge Plus – in stores from 2795 PLN
Finally, we compare all the data
We check the real cost of the phone with the operator (the upfront fee and the cost from the monthly payments) and compare it with the cost of the smartphone in a store. Our calculations show that in every analyzed case, the operator's offer was significantly more expensive than buying it from a store.
Microsoft Lumia 950 LTE
We would seemingly buy the Microsoft Lumia 950 LTE smartphone from the operator for 1729 PLN, but when considering the contract costs, it amounts to 2952.76 PLN. This is 122.88% of the store price, which is 2403 PLN. It seems like we're saving 674 PLN, but in reality, we're overpaying by 549.76 PLN.
Sony Xperia Z5 Dual
We would seemingly buy the Sony Xperia Z5 Dual smartphone from the operator for 2229 PLN, but when considering the contract costs, it amounts to 3452.76 PLN. This is 131.84% of the store price, which is 2619 PLN. It seems like we're saving 390 PLN, but in reality, we're overpaying by 833.76 PLN.
Samsung Galaxy S6 Edge Plus
We would seemingly buy the Samsung Galaxy S6 Edge Plus smartphone from the operator for 2629 PLN, but when considering the contract costs, it amounts to 3852.76 PLN. This is 137.84% of the store price, which is 2795 PLN. It seems like we're saving 166 PLN, but in reality, we're overpaying by 1057.76 PLN.
The presented analysis shows that it is definitely more cost-effective to buy a phone separately from an electronics store than with a contract from an operator. Of course, the differences presented will change depending on current market offers and the phones and store prices we choose. However, it's important to remember that the magical promotional price of a smartphone in mobile operator stores is usually not that great of a deal. Therefore, it's worth considering your decision and doing some simple calculations that might protect you from overpaying. We hope our comparison helps you make wise and cost-effective choices.
