The tariffs are listed at the O2 website, and for a 16Gb black iPhone 5 you can get a contract with unlimited minutes, unlimited texts and 1Gb of data. It's a two year contract, so the total cost is 24 x the month tariff plus the cost of the phone. Here's how the deals work out:
£26 x 24 + £249.99 = £873.99
£31 x 24 + £199.99 = £943.99
£36 x 24 + £99.99 = £963.99
£41 x 24 + £49.99 = £1033.99
£46 x 24 + £0 = £1104.00
Each deal has the same minutes, the same messages, the same data. However, as you can see, there are large differences in the total cost. Getting a free iPhone 5 might seem like a good deal, but it is in fact the worst. The more you pay up front for the iPhone, the less you will pay in the long term.
The £26 a month tariff is clearly the cheapest, saving £230 over the free phone offer at £46 a month. You are effectively borrowing £249.99 over 24 months and paying £230 interest. That seems like a poor deal to me.
Whenever you see mobile phone deals you should always calculate the total cost over the term of the contract. The results can be surprising.
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