What is a SIM Free Mobile Phone?
“SIM Free Mobile Phones ” is the term given to mobile phones obtained from either mobile phone dealers or mobile phone stockists that are not subject to an airtime contract or airtime agreement in other words the are sold without a SIM card, hence the term SIM free.
Mobile phones that are sold in this way can be up to £500 more expensive than when given away or sold cheaply with a network contract.
The reason for the huge price difference between contract phones and SIM free phones is because when a dealer supplies a contract mobile phone connected to either Orange, T-mobile, Vodafone, O2 or 3 pay monthly tariff they will be paid a commission by the network, in many cases the dealer will offer part of his commission to the customer as an enticement to purchase the phone from them. This is why high specification phones are either very cheap or even free and lower end mobile phones are being given away free with huge financial cash backs or free line rentals. Generally the higher the cost of line rental the better the deal you are able to obtain.
With SIM free handsets, as there is not a network commission for the dealer to offset, the full cost of the handset has to be charged to the customer this can be less than £100 for a basic handset or up to £600+ for the latest all singing all dancing PDA.
There are many reasons why a mobile phone user may wish to by a SIM free mobile phone; one of the main ones is a fashion thing, they must have the latest technology, be the first with the latest released model, have the best quality camera or the biggest MP3 memory etc etc, now if the user is in the middle of a contract then he will not be able get the benefit of an upgrade or be able to port their number so purchasing a SIM free handset allows them to use their existing SIM card keeping their mobile number , tariff exactly the same. The same reasoning could apply to a PAYG or Pay As You Go Customer who would not be able to upgrade with a discounted handset and for their own reasons would not want to take out a contract.
The customer may not be a fashion victim at all but may simply be replacing a handset that has been lost or stolen; they may well have mobile phone insurance or they will be funding the replacement themselves if they decided not to get insurance which would have undoubtedly been offered at time of purchase.
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