SIM-only vs handset mobile plans

The two shapes of mobile plan

A SIM-only plan gives you airtime — an allowance of data, minutes, and texts — to use with a phone you already own. The monthly payment covers the service and nothing else.

A handset plan bundles a phone into the contract, so the monthly payment covers both the airtime and the cost of the device, spread over the life of the contract. The two shapes suit different situations, and the difference shows up mostly in how the monthly cost is built.

How the costs are structured

With SIM-only, the monthly price is simply the price of the airtime. Minimum terms for SIM-only plans are often shorter than for handset plans, and some run on a rolling monthly basis that you can end with notice.

With a handset plan, part of each payment is effectively repaying the phone and part is paying for the airtime. Some contracts present this as one combined figure; others show the two parts separately, which makes it easier to see what each element costs.

• SIM-only: airtime only, often with a shorter or rolling term.
• Handset plan: airtime plus the device, usually over a longer minimum term.
• The paperwork should show whether the phone and airtime are combined into one price or itemised separately.

Split contracts: airtime and device as separate agreements

Some providers structure a handset plan as two separate agreements: one for the airtime and one for the device. This arrangement is often called a split contract, and it can appear as two lines on your bill or even as two separate bills.

The two agreements can have different lengths and different end dates, so it is worth checking each one. The airtime part may end, or become changeable, at a different time from the device part.

What happens when the handset is paid off

On a split contract, the device payments typically stop once the phone is paid for, leaving just the airtime charge. The device agreement or your account area should show when the final payment falls.

On a combined handset plan, the position can be different: the single monthly price may carry on at the same level after the minimum term unless the plan changes, even though the phone has effectively been paid for. It is worth knowing which structure you are on, because it shapes what your bill looks like once the device is yours.

Locked and unlocked handsets

A locked handset only accepts SIMs from the network it was supplied by, while an unlocked one works with any compatible network. Whether a phone is locked affects whether it can be used with a SIM-only plan elsewhere once it is paid off.

If you are unsure, your provider can tell you whether a handset it supplied is locked, and how unlocking works if it is. Practices have changed over time, so it is worth checking the position for your particular phone rather than assuming.

• Whether the handset was supplied locked to the network.
• How an unlock is requested, and whether any conditions attach to it.
• Whether the phone supports the SIM type — physical SIM or eSIM — used by the plan you are reading about.

Working out which structure you are on

Your contract paperwork, a recent bill, and your provider’s app or account area are the usual places to find how a plan is structured. Look for whether the device appears as its own agreement, when each minimum term ends, and how the price is described after that point.

None of this decides which shape of plan suits you — that depends on how you prefer to pay for a phone and how often you change it. Knowing how the two structures work simply makes your own bill, and any plan you compare it with, easier to read.

A note on this guide

This guide is general information to help you understand your own contracts. It is not financial advice or a recommendation, and it does not rank or endorse any provider. Every decision about your contracts remains with you. To see how PEAMO surfaces your contracts and renewals, read How PEAMO works.