Vodafone introduce 12-month Pay Monthly contracts for smartphones

March 16th, 2011

Vodafone have introduced a range of 12-month Pay Monthly smartphone tariffs. The 12 month plans start from £35/month for 300 minutes, unlimited texts and 500MB internet.

Why are Vodafone introducing 12 month contracts?

The EU recently ruled that mobile operators must give consumers the option of taking out a 12-month mobile phone contract. The reforms come into law in May but ahead of this, Vodafone have launched a range of 12 month smartphone tariffs. Starting at £35/month with 300 minutes, unlimited texts and 500MB internet, a range of smartphones are available on the new tariffs including the Apple iPhone, the BlackBerry Torch, the HTC Desire HD and Samsung Galaxy S. Unfortunately all 12 month tariffs come with an upfront charge for the smartphone.

Which phones and tariffs are available?

Vodafone’s new 12-month Pay Monthly tariffs start from £35/month for 300 minutes rising to £50/month for 1200 minutes. All of the new 12-month tariffs come with unlimited texts and a 500MB internet allowance which should be suitable for the majority of smartphone users (see our guide to what 500MB really means).

Monthly Price Minutes Texts Internet
£35/month 300 Unlimited 500MB
£40/month 600 Unlimited 500MB
£45/month 900 Unlimited 500MB
£50/month 1200 Unlimited 750MB

As well as the monthly fee, you’ll need to make an upfront payment for the phone:

Phone Monthly Price
£35/month £40/month £45/month £50/month
Apple iPhone 3G S (8GB) £199 £139 £89 £29
Apple iPhone 4 (16GB) £299 £239 £189 £99
Apple iPhone 4 (32GB) £399 £339 £289 £199
Blackberry Bold 9780 £159 £119 £79 £39
Blackberry Torch £179 £139 £99 £59
HTC Desire HD £179 £139 £99 £59
Nokia N8 £159 £119 £79 £39
Samsung Galaxy S £159 £119 £79 £39

What is the total cost of ownership over 12 months?

When considering each of the phone/tariff combinations, it is worthwhile to consider the “total cost of ownership” over 12 months. This is the total amount you’ll pay for the phone and the contract over the course of your 12 month contract. It is calculated by total cost of ownership = upfront cost + (monthly cost * length of contract in months). The total cost of ownership for each phone/tariff combo is as follows:

Phone Tariff
£35/month £40/month £45/month £50/month
Apple iPhone 3G S (8GB) £619 £619 £629 £629
Apple iPhone 4 (16GB) £719 £719 £729 £699
Apple iPhone 4 (32GB) £819 £819 £829 £799
Blackberry Bold 9780 £579 £599 £619 £639
Blackberry Torch £599 £619 £639 £659
HTC Desire HD £599 £619 £639 £659
Nokia N8 £579 £599 £619 £639
Samsung Galaxy S £579 £599 £619 £639

Is it possible to get a free phone on a 12 month contract?

Unfortunately Vodafone do not offer any free smartphones on a 12 month contract. A much larger range of phones is available if you opt for an 18-month contract including some “free” smartphones.

How do Vodafone’s 12 month contracts compare to their 18-month or 24-month alternatives?

12 month contracts are great for giving you the flexibility to change your phone every year and the ability to switch to cheaper deals such as SIM-only tariffs once your 12-month contract period is over. However the cost of having this flexibility is that you’ve got a smaller range of phones to choose from, you’ll have to pay for the phone upfront and your monthly bill will be higher. Compared to an 18 month contract you could be paying an extra £5/month for the same amount of airtime and compared to a 24-month contract, you could be paying an extra £10/month for the same amount of minutes and texts.

For some phones, it’s barely worth going for a 12 month contract as it’ll work out costing roughly the same as an 18 month contract.  Take the Samsung Galaxy S with 600 minutes, unlimited texts and 500MB internet each month for example. The price plans compare as follows:

Contract Length Upfront Cost Monthly Cost Total Cost of Ownership Effective cost per month
12 months £119 £40/month £599 over 12 months £49.92/month over 12 months
18 months Free £35/month £630 over 18 months £35.00/month over 18 months
24 months Free £30/month £720 over 24 months £30.00/month over 24 months

In this case there are few savings to be had with the 12 month contract: you’ll only pay an extra £31 to get the phone on the equivalent 18 month contract.

For some phones, there are some savings to be had on a 12 month contract. Take the 16GB iPhone 4 with 300 minutes, unlimited texts and 500MB internet each month. The price plans compare as follows:

Contract Length Upfront Cost Monthly Cost Total Cost of Ownership Effective cost per month
12 months £299 £35/month £719 over 12 months £59.92/month over 12 months
18 months £199 £35/month £829 over 18 months £46.05/month over 18 months
24 months £199 £30/month £919 over 24 months £38.29/month over 24 months

At first glance, the 18 month and 24 month options look fairly attractive as the “effective monthly cost” comes right down. However, savings could be had if you opted for the shorter 12 month contract and then switched to a SIM-only tariff after 12 months. If you signed up for the 12 month Vodafone iPhone contract and then switched to Three’s £10/month SIM-only tariff after the 12 months, the total cost of ownership would only come to £839 over 24 months – a saving of £80 compared to the straight 24 month contract.

Does anybody else offer a 12-month contract?

At the time of publication, Tesco Mobile is the only other network to offer a smartphone on a 12 month contracts. Once again you’ll have to make an upfront payment for the phone.

All of the major networks offer 12-month SIM-only contracts. These tariffs are ideal for people who are happy with their current phone but would like a monthly allowance of minutes, texts and access to the internet to go with their phone. We’ve got a guide to the UK’s best value smartphone SIM-only tariffs.

What does 500MB actually mean?

500MB approximately corresponds to browsing 5,000 basic webpages or receiving/sending 500,000 basic e-mails (without attachments). Generally, in our experience, 500MB should be more than enough providing that you don’t use your phone to stream music/video. We’ve prepared a detailed guide on the meaning of 500MB internet.

Where can I get a 12 month contract on Vodafone?

Vodafone are currently offering 12-month smartphone tariffs through their website.

Vodafone also offer a range of 12-month SIM-only tariffs (an airtime only contract without a new phone).

I’m switching to Vodafone. Can I keep my existing phone number?

Yes. You’ll need to ask your existing network for a PAC Code and provide this to Vodafone. Vodafone will handle the process of transferring your number from your existing network to Vodafone. Our PAC Code Finder tool can walk you through the whole process of transferring your phone number.

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About Ken

Ken Lo

My passion is helping people to get the most out of their mobile phone. I've been blogging at Ken's Tech Tips since 2005.

Aside from writing about mobile technology, my interests are in software development, digital marketing and physics. Outside of the blog, I work with numerous technology companies helping them to explain their product and helping them to market it to consumers. Please get in touch for more information.

Your Comments

We'd love to hear your thoughts and any questions you may have. So far, we've received 1 comment from readers. You can add your own comment here.

  1. Ken Lo
    Ken said:

    13.00: Post updated due to some errors in the "Total Cost of Ownership" calculations. Now showing correct TCOs.

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