Advantages & disadvantages in comparison

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If you want to treat yourself to a high-priced smartphone without getting into a financial emergency, there are mobile phones with contracts for you. Month after month, the good piece is paid off. As with all contracts, of course, caution is required here, and the fine print must be read. WHAT to consider and whether mobile phones with contracts are really more expensive than smartphone-independent mobile phone contracts, GIGA is looking into this question.

In the jungle of mobile phone contracts, you quickly lose sight of the essentials. There are thousands of offers, each with different prices and contract content. The search is usually slow and lengthy. After a few minutes of research, the seemingly unbeatable price is again undercut. In addition, technical innovations such as the recently expanded 5G network create even more confusion. To make matters worse, contracts can be concluded with or without a smartphone.

In order to shed some light on the dark, we will deal below with the essential aspects of mobile phone contracts that are relevant for a purchase decision. The results of the Stiftung Warentest support in choosing the right contract, which is why we will also respond to it. And in the end, the iPhone 11 Pro acts as a small case study.

Smartphones with or without a contract: Everything you need to know

Mobile phone contract in comparison: these types exist

We distinguish between three different types of mobile phone contracts, as we currently find them with most providers. These include:

  • Allnet Flat
  • Package contract
  • Prepaid fare

Mobile phone with contract: Allnet-Flat

The term Allnet-Flat is composed of the words Allnet and Flatrate. Allnet means that the contract can be used to make calls and texts to all networks. The term flat rate stands for unlimited usability. The Allnet-Flat is therefore a mobile phone contract with which you can communicate unlimitedly and without any fees in all fixed and mobile networks. A fixed monthly amount is paid for this.

The Allnet flat also offers a high volume of data, usually up to 20 gigabytes. For a month, that’s more than enough data volume to surf the Internet extensively or stream movies, series and games. The negative aspects of this type of contract include the long contractual obligations (usually 24 months) and the high monthly costs as soon as the contract is concluded in combination with a smartphone.

Benefits:

  • Unlimited phone calls and writing to all networks
  • High data volume

Disadvantages:

  • Long contract terms
  • High monthly costs for contracts with smartphones

For whom it is suitable:

  • If you use your smartphone very intensively
  • If you watch many videos in good quality on the go
  • If you don’t want any restrictions

Mobile phone with contract: package contract

In contrast to the Allnet flat, this type of contract is used to create a more or less individual package that specifies the amount of free minutes, the number of SMS messages and the volume of data. In most cases, various packages are available for casual to frequent users. As soon as the specified number of free minutes and free SMS has been exceeded, additional costs per minute / per SMS will be charged. Depending on the contract, it can be very expensive – if you are not careful, you will end up facing a horrendous bill.

If the monthly set data volume is consumed, it is throttled. This means that you can still surf. However, when throttled, the download speed is so poor that most online services no longer function reliably. In order to increase the volume of data, payment must be made in excess of the contractual fee. However, the monthly fees of a package transfer are also lower than with an Allnet flat.

Benefits:

  • Relatively low monthly fees
  • Flexible packages possible

Disadvantages:

  • If the specified conditions (minutes / SMS) are overdrawn, it can be very expensive
  • Throttled data volume is so bad that the Internet is virtually unusable

For whom it is suitable:

  • If you’re not an intensive user
  • If you know exactly what you’re consuming a month and almost never exceeds it
  • If you want to save money

Mobile phone without contract: prepaid tariff

The prepaid fare is not a mobile phone contract in the true sense of the word, as there are no regular costs. Instead, credits can be loaded onto the prepaid card, which is then used to pay for telephony and SMS costs. You are not bound by any contract, no termination is necessary.

As long as there is credit on your phone, you can use it until it is used up – even if it takes months or even years. Similar to the package transfer, other options or even flat rates can be added, which in turn are paid with the credit. As a rule, the credit cannot be overdrawn. Once used up, however, no phone calls can be made, SMS can be sent and the Internet can be used. This can be extremely annoying, especially with important phone calls.

Benefits:

  • No contractual commitment
  • No coating possible, no nasty surprises possible on the bill
  • Flexible use thanks to various bookable packages and flat rates

Disadvantages:

  • If the credit is used up, it must be charged manually
  • Smartphone usually needs to be purchased separately

For whom it is suitable:

  • If you want to remain flexible and not be bound by a contract
  • If you want to keep track of your expenses and can’t afford horrendous overbills
  • If you use your phone more, sometimes less, depending on the month

Do you buy your smartphone with or without a contract?

If it’s a brand new flagship from Apple, Samsung or Huawei, a smartphone can cost around 1,000 euros. If you buy it with a contract, you don’t have to raise the sum at once, but you are bound for at least two years and have to pay a high basic fee. So both have advantages and disadvantages, or how do you see that? Do you prefer to buy your mobile phone with or without a contract?

Mobile phone contract: The most important purchasing criteria

In addition to the different types of contracts, there are other things that you should consider before concluding a new mobile phone contract. How heavy the respective points weigh in the purchase decision, everyone has to decide for themselves – of course taking into account their own needs. The following questions should be asked before concluding the contract:

Is there a phone number?

Those who have just remembered their miserably long mobile phone number will be reluctant to get used to it again. In addition, it is quite expensive to communicate the new phone number to all your contacts. If you only have a mobile number and do not have a landline, you must also update it with the authorities and doctors.

This can be handled by the telephone number. This is offered by most contractors, but often it is not included in the price. It can cost up to 25 euros to take a phone number. Therefore, every time you conclude a contract, you should check and compare whether the old mobile phone number is possible and how much it costs.

Does the contract have a telephone flat in all networks and abroad?

What is common at Allnet-Flat requires a little more research with a package contract and prepaid tariff. Cheap offers allow you to make calls to the same network (e.g. from AldiTalk to AldiTalk), but exclude other networks, calls to the German landline or abroad. If your family and friends are all on the same network and if you rarely ever make calls to landlines/abroad, such packages can save a lot of money.

Does the contract have an SMS flat?

Communication via SMS has declined sharply thanks to Messenger. If you continue to write messages about the “Short Message Service”, you should pay attention to an SMS flat in your contract.

How much data does the contract contain?

Nowadays, almost nothing can be done without the internet on smartphones. Accordingly, the main focus is on the data volume of mobile phone contracts. If you regularly need the Internet, you will not be satisfied with a contract without a lot of data volume. Flat rates tend to be preferred, which do not limit the data volume – but currently such tariffs are still quite expensive. How much data volume is actually needed depends on individual use. For a better feeling and understanding, here are some examples of use:

With 200 MB, approximately 20,000 WhatsApp messages and 4,000 emails can be received and viewed without attachments. Messenger messages and emails, however, don’t cost as much as streaming videos or entire movies. Watching YouTube videos consumes around 250 MB per hour. A complete film eats up a full 700 MB of the data volume. In HD quality it is a whopping 4 GB.

If the smartphone is mainly used in the Used at home or at work, a data volume of 500 MB to a maximum of 1 GB is sufficient. If you are travelling particularly frequently on social media, a data volume of at least 3 GB is suitable for you. If you use your smartphone as a multimedia all-purpose weapon, you should never use less than 5 GB. All-day streamers require at least 25 GB of data.

How much data volume is per month?

How much data volume does your plan provide and how much of it do you actually use in the end?

What is the speed of the Internet?

The available Internet speed is at least as important. Again, there are significant differences. If you need fast internet on the go, you should not ignore this aspect. Fares with a maximum speed of 21.6 Mbps are so far perfectly sufficient to surf fast – but in the future the required speed is likely to increase further.

The download speed increases depending on the name as follows:

Label Connection Icon Maximum download speed
2g Gprs G 54 kbps
2g Edge E 220 kBit/s
3G Umts 3G 384 kbps
3G Hspa H / 3.5G / 3G 21.6 Mbps
3G HSPA+ H+ / 3G 42.2 Mbps
4g Lte LTE / 4G 300 Mbps
4g LTE+ LTE-A / LTE+ / 4G+ about 4 Gbps
5G 5G about 10 Gbps

How good is the provider’s network coverage?

Of course, a contract that includes an LTE connection does not pay off if the network coverage does not allow it. In order to find out the network coverage, it is worthwhile to review the network coverage card on the provider’s website. Click here to go to the maps of Vodafone, and Telekom. It can be filtered specifically for 3G, 4G and 5G, some providers even indicate how good the telephone connection is expected to be.

When and how can the mobile phone contract be terminated?

Contract terms are an equally important aspect. Contracts with longer minimum contract terms usually impress with cheaper prices. However, not everyone likes to bind themselves to a non-monthly contract with a term of at least 24 months. After such a long time, many forget to submit their termination in time, so that the contract is automatically renewed. After the extension, however, most contracts are no longer profitable. Therefore, early termination and the switch to a cheaper tariff is advisable.

What happens in case of damage to the smartphone?

When purchasing a smartphone without a contract, there is a 12- to 24-month warranty claim, depending on the manufacturer. If self-inflicted damage or damage occurs after the end of the warranty period, you must bear the costs yourself – or buy a new device.

In the case of contract edging equipment, a defective device does not necessarily have to be sent to the manufacturer for repair. The respective contract provider also offers repair services (see Vodafone). Here the repair is also free of charge if the defect falls under the statutory warranty claim. In the case of self-inflicted defects, a repair fee must be paid. If you decide that a repair would not be worthwhile because the device is too old or the repair is too expensive, you can also use the contract SIM with another smartphone.

Other articles on the subject:

Stiftung Warentest: Mobile phone tariffs in comparison

In March 2020, the Stiftung Warentest mobile phone contracts again under the microscope. 46 tariffs have been tested, which cost a maximum of 13 euros and also offer a telephone flat. Of the 46 tariffs, 22 are prepaid tariffs without a contract and the remaining 24 are tariffs with a minimum term of 24 months. Your research concludes that there are good LTE contracts already available at a monthly price of 7 euros. While you usually benefit from a high download speed with contract tariffs, you are not contractually bound to prepaid tariffs. What fits better, everyone has to decide for himself, the Stiftung Warentest does not make a clear recommendation in this case.

Stiftung Warentest: Is a smartphone without a contract cheaper?

The Stiftung Warentest in another article on the subject of the question of what is cheaper: mobile phones with a contract or the conclusion of a contract tariff without a smartphone. 400 mobile phone tariffs were evaluated and the tariff for six smartphones was calculated. The result clears up old patterns of thought. The belief that self-purchased phones are cheaper with a separate contract has been refuted.

The smartphones analysed by the Stiftung Warentest have proved to be cheaper with tariffs. The purchase of installments from the tariff provider pays off as long as one thing is always taken into account: the timely exit from the contract as soon as the minimum contract term has expired and thus the instalment payment for the smartphone comes to an end. This also applies to contracts concluded independently of the purchase of a smartphone – after 24 months at the latest, it is worth looking for a new contract.

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Case study: The iPhone 11 Pro with and without a contract

If the iPhone has always been too expensive as a direct purchase, you can fulfill your smartphone dream with the help of a contract. The iPhone 11 Pro is already in decline and can be purchased for just under 1,000 euros, but that is far too expensive for many. If you still want to enjoy the benefit, there are attractive contract offers for you: for 49 euros incl. Allnet-Flat with 20 GB LTE.

The price of the tariff is as follows:

  • Network: Telefinica
  • Contract term: 24 months
  • Monthly price: 54.99 Euro
  • Connection price: 39.99 Euro
  • One-time equipment payment: 49.00 Euro

The contract therefore proposes over two years with €1,408.75 to book.

The purchase of the smartphone with monthly prepaid costs in the comparable network with 20 GB LTE at Mobilcom Debitel would cost the following with the same contract term:

Buying the iPhone 11 with external prepaid costs hits back €1,546.75 to book. Accordingly, the iPhone 11 Pro would definitely be worth buying with a contract – you would Save 138 euros.

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