For many cell phone customers, a two-year contract with a smartphone is the most convenient way to get their desired device. But this form of device financing is on average 22 percent more expensive than purchasing the smartphone and tariff separately. At its peak, the savings are even over 50 percent. This is shown by a price analysis by the comparison portal Verivox.
Buying the cell phone and tariff separately is almost always cheaper
Verivox has calculated for four customer profiles (from light users to intensive users) how much can be saved over 24 months by purchasing the smartphone and tariff separately. The highest percentage savings come from tariffs for average users with a data budget of 5 to a maximum of 12 gigabytes (GB) per month. For example, if the Xiaomi Redmi Note 12 5G is combined with a cheap discount tariff on the O2 network, the cost is over 420 euros less in 24 months than if the device and tariff were bundled – a saving of over 49 percent. In the Telekom network the possible savings are up to 46 percent, in the other two networks 32 percent (Vodafone) and 20 percent (1&1).
On average, the percentage savings are 22 percent – across all networks, tariff and device classes. The absolute savings are particularly high when buying higher-quality models: For example, if you combine an Apple iPhone 15 with a 20 GB tariff in the Telekom network, you will save 780 euros in 24 months compared to buying a bundle.
“In order to keep the one-off price of a device as low as possible, many customers commit to high-priced fixed-term tariffs,” says Jens-Uwe Theumer, Vice President Telecommunications at Verivox. “We observe a high affinity for top smartphone models, especially among young people. Often the tariff is simply a vehicle to get the device supposedly cheaply. Long-term financing costs and a potential risk of over-indebtedness are ignored.”
Bundles: After 24 months, three out of four customers pay more
If you still decide on a bundle of smartphone and tariff, you should pay particular attention to the costs after 24 months. Because in three out of four cases, bundled devices still generate costs even after they have long been paid for. If a contract with a smartphone continues unchanged after two years, the basic monthly fee at Telekom, Vodafone and 1&1 will not be reduced – even though the device is then paid off. O2 is the only one of the four network operators to automatically deduct the smartphone share after 24 months.
“The mobile phone providers do not see the additional costs as a payment for the smartphone, but rather as part of the contract,” says Theumer. “Customers should cancel before the end of the two years – otherwise they will pay a lot of money without receiving anything in return. After the minimum term, cancellation is possible on a monthly basis.”
Network operators price bundles more cheaply than purchasing them separately
Anyone who decides against a discount tariff, for example because they want a higher 5G speed or a larger selection of options, will find the best selection from the network operators. In this case, a bundle contract can be cheaper – because bundles are preferred by the major providers.
“Germany is a very attractive market for smartphone manufacturers, with high marketing budgets flowing into it,” says Theumer. “In smaller markets such as Austria and Switzerland, hardware-supported sales have never played this big of a role. It is therefore no coincidence that the costs for devices and tariffs are generally broken down much more transparently there than in Germany.”
Bundles can be interesting for frequent users who are looking for high-end smartphones. Above 20 GB per month, comparable, high-performance tariffs are few and far between at discounters. For example, if you want an unlimited tariff for the Samsung Galaxy Z Fold, you can often get cheaper deals with bundle offers – provided that the tariff is canceled in good time after the minimum term.
methodology
All device and tariff costs as well as discounts and one-off fees have been extrapolated over 24 months. Time-limited promotions are not taken into account. For four model cases (light user, average user, heavy user, intensive user), the network operator tariffs were compared with suitable discount offers in the same network and with comparable data volume. The model cases are based on four selected end devices (each with the smallest memory size, prices according to RRP): 1. Beginners: Xiaomi Redmi Note 12 5 for 299.90 euros; 2. Middle class: Xiaomi 13T for 649.90 euros; 3. Premium: Apple iPhone 15 for 949.00 euros; 4. High-end: Samsung Galaxy Z Fold for 1,899.00 euros. As of: November 9, 2023. Source: Provider and manufacturer websites.