After being announced last week, the new iPhone 5 finally went on sale today in the UK. Queues outside the Apple Store in London were the biggest ever seen and it looks set to break all sales records despite the issues with the Maps app.
If, like many others, you’ve decided that the iPhone 5 is a must have handset, you’ve almost certainly had a look at the dazzling array of tariffs on offer. While you may be sure that the new model is the phone for you, it might not be so clear which option to go for when there are so many different tariff choices across five main networks. Then, things are made even more complex by the fact that you don’t even need to buy the iPhone 5 on a contract deal – you can also buy unlocked handsets directly from Apple which you can then use on any PAYG tariffs you choose. In total there there are over 100 different tariff combinations for new iPhone 5 users to consider – how on earth can you possibly decide the best one for you?
Total cost of ownership
Many people aren’t aware that there’s a metric you can use to fairly compare different tariffs across networks with different allowances. It even allows a comparison between contract offers and PAYG.
All you need to do is to calculate the Total cost of ownership. This is just the overall amount you’ll have to pay over the course of your whole contract (or for the equivalent length of time on PAYG) for your new iPhone 5. You work it out by adding the initial cost of the handset to the monthly price of the plan multiplied by the length of the contract (in months). Or, if you speak maths:
Total cost of ownership = costhandset + costmonthly tariff × tcontract length
As the SIM-free option involves a large upfront payment followed by a far cheaper PAYG tariff while contracts usually have subsidised (or even free) handsets with pricier charges over the following months, this is the best way to compare the available options.
Quite often you’ll find that even if you get the iPhone 5 “free” on a certain deal, it will actually end up costing you £100s more than if you’d gone for an equivalent contract with a lower monthly cost but a higher initial handset price.
For example, O2 offer the 64GB iPhone 5 on a 24 month contract with 5 options – ranging from £63/month to £26/month and with initial handset outlays of between £450 and £70. All these options come with exactly the same allowances – unlimited minutes, unlimited texts and 1GB of mobile data.
If you think it sounds a good idea to get the iPhone 5 for “only” £70 you should work out the total cost of ownership – if you have to pay £63 per month for 24 months on top of this (making a total of £1204), your total price over 2 years would be £1274. However, if you chose to pay the £450 price for the phone upfront, you only have to pay an additional £624 making the final amount you pay just £1074. It psycholgically seems a lot to pay £450 for a phone but you save £200 over two years by doing this – almost half that £450! So, you can clearly see that you can save a huge amount by just running some simple calculations before buying.
iPhone 5 16GB price comparison
In this comparison we’ve looked at all the deals available for the iPhone 5 16GB version from the major UK networks (O2, 3, Orange, T-Mobile and Vodafone) as well as the cheapest PAYG alternative from Giffgaff using their incredible value goodybags. We’ve only looked at 24 month contracts because almost all the networks only offer this length and they provide the best value.
We’ve considered what people want when choosing a tariff and have decided to further break down our analysis into separate sections so you can see which deal is best for you. We’ve not only looked at the cheapest way to get a iPhone 5 overall – we’ve also looked at the best offers for unlimited minutes and unlimited data. Don’t forget to also keep in mind the coverage in your area for the network you want to go with – our network coverage maps will let you know how good the signal strength is.
The absolute cheapest iPhone 5 16GB deal in the UK
Orange and T-Mobile
First of all, due to the delayed Ofcom spectrum auction Orange and T-Mobile (under the guise of EE) will be, for the time being, the only UK networks able to offer 4G LTE speeds. So if you’re desperate for an injection of internet speed, it’s worth considering going with them rather than waiting for everyone else to catch-up.
The cheapest deal available on Orange comes with as much calls and texts as you want as well as a 1GB data allowance. It will cost you £36/month and you’ll have to fork out £110 initially for the phone. This makes the total cost of ownership £974 over the course of your contract.
T-Mobile may be run by the same company as Orange so it’s not surprising that many of their offers are very similar. To get the lowest price on the iPhone 5 you still have to pay £36/month and the initial cost of the phone is £109. With this you get 2000 minutes, as well as as unlimited texts and data and the total price is just £1 less at £973. So you should decide whether you prefer to have unlimited data with T-Mobile or unlimited minutes on Orange.
Three’s cheapest tariff costs just £895 over two years. This is with a £34 monthly cost and a £79 upfront cost. You get with it 500 minutes, 5000 texts and unlimited data. However, there’s a much better tariff available for only £2/month more. It’s the famous One Plan and comes with effectively unlimited minutes (2000 any-network, 5000 Three-to-Three), a huge 5000 texts and a totally unlimited data allowance. This makes a total of £943 over the 24 month contract which still saves you a few quid over the EE options with Orange and T-Mobile.
You can save just a few quid with Vodafone. Their cheapest offering overall comes with 600 minutes, unlimited SMS and just 500MB of mobile data. It will cost you £149 for the phone then £33/month for the next two years. This adds up to a total of £941, just a bit cheaper than Three’s lowest tariff.
If you don’t need a massive data allowance, O2 have a great deal available. If you can pay the £250 handset charge, you’ll only have to pay £26/month for unlimited calls and texts and 1GB of mobile internet. This makes a total cost of ownership of the iPhone 5 of just £874.
If, however, you just want to get your greasy mitts on the iPhone 5 at the lowest price possible, budget PAYG network Giffgaff is by far your best choice. By picking up the 16GB model of the iPhone 5 for £529 unlocked, you can then get a completely free Giffgaff SIM (which comes with £5 free credit if you use our link). Then just get on the £10 goodybag for as long as you want paying just £10/month. Including the £5 bonus you get from ordering through our site, this makes your total over two years only £764 for 250 minutes, unlimited data and 1GB mobile data (upgradable to truly unlimited internet for just £2/month). You also get unlimited Giffgaff-to-Giffgaff calls for free.
That’s a full £210 cheaper than choosing Orange or T-Mobile and over £100 less than any other network!
The cheapest iPhone 5 16GB with unlimited calls
*minutes aren’t truly unlimited, but 2000 any-network plus 5000 Three-to-Three is close enough for us.
Unfortunately Giffgaff don’t offer unlimited minutes on any plan any more so we can’t include them.
Although you do get the benefit of a working 4G network, T-Mobile actually has by far the worst deal available for unlimited calls. You must pay £49 upfront followed by a further £41 every month. You do get unlimited texts and data too though. The total price will be over a grand – £1,033 to be exact.
Vodafone’s best deal comes to a total of £987 if you want unlimited minutes. You get unlimited texts too and 1GB of inclusive data but you have to pay £99 for the handset followed by £37/month.
Orange’s best price is marginally better. You get the same deal as with Vodafone – unlimited calls and texts and 1GB of mobile internet but you have to pay £110 to get the handset and a little less every month at just £36. This almost balances out leaving the total cost of ownership at £974.
Three has got one of the strongest all-round plans available for the iPhone 5 in its flagship One Plan. If you buy like this you will only have to pay £79 up front then £36/month for the duration of the contact. Unfortunately you don’t quite get truly unlimited calls and texts (though 2000 UK minutes plus 5000 Three-to-Three minutes plus 5000 texts will be effectively unlimited for almost everywhere which is why we felt it was okay to include it). The big benefit is truly unlimited data on Three’s speedy 3G network. The total cost comes to just £943.
O2 is easily the best value network on offer if you need to make lots and lots of calls. They offer unlimited calls, unlimited texts and 1GB of mobile internet for just £26/month. The initial handset cost is £250 making the total cost of ownership over two years only £874. Once again, this shows the savings available if you’re able and willing to spend a little more on the upfront costs.
The cheapest iPhone 5 16GB with unlimited data
Vodafone and O2
Vodafone and O2 are showing just how behind the times they are by not offering a single tariff with unlimited data. As mobile internet is becoming a bigger and bigger part of smartphone use and with the 4G connectivity of the iPhone 5, this is really disappointing. 1GB hasn’t been much for years now and more and more people are finding they require the freedom that unlimited internet tariffs allow.
Orange have a completely unlimited plan – this amazing tariff has no limit on inclusive minutes, texts or data. Unfortunately, you have to pay for this privilege – while the 16GB handset doesn’t cost a penny, you have to pay £51/month for two years. This makes a total of £1,224 over the length of the contract.
T-Mobile’s deal is a bit better. As well as unlimited data, you also get unlimited texts and 2000 included UK minutes. You’ll have to pay £109 to start with followed by £36/month making a total outlay of £973.
Once again, Three’s One Plan scores well. As usual you get 2000 UK minutes, 5000 Three-to-Three minutes, 5000 texts and truly unlimited internet all for only £36/month. The handset will cost you £79 making the total all-in at £943.
However, Giffgaff have easily the best plan if you’re a big data user who’s also money-conscious. You can really save a packet by going SIM-free then PAYG and you’re not locked into a contract for years. Just order a SIM for free with £5 bonus credit then buy an unlocked iPhone 5. Giffgaff have a great Goodybag that costs only £12/month giving you 250 UK minutes, unlimited Giffgaff-to-Giffgaff calls, unlimited texts and unlimited data. Add on the £529 for the unlocked iPhone 5 (and include the £5 free credit) and your total cost of ownership over a 24 month period is just £812.
This just goes to show the importance of doing a total cost of ownership calculation. If you decide to choose Giffgaff instead of a contract on Orange, you’ll save 33%! That’s over £400!
So we hope you’ll now know which iPhone 5 tariff you want to choose. Thanks for reading this far. We’ve linked through to all the deals in the article above so just click though to make the first step towards your shiny new handset 🙂
Hopefully you now understand why total cost of ownership is such a useful metric and have a better idea of how to get the best price on a new iPhone 5. We also expect that we’ve helped you save some money if you were going to buy an iPhone 5. Remember to sign up to our newsletter for our next article on the best deals on the cheapest possible 32GB version of the iPhone 5 in the UK. And, as ever, please feel free to ask any question you may have in the comments below – we’ll try our best to answer every query.