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Industry Secrets: How to buy your business mobiles in the most efficient way for your business

by Rasheeda Russell on Jun 07, 2022

Industry Secrets: How to buy your business mobiles in the most efficient way for your business
How you can save hundreds of pounds on your business mobile phone bills

In this blog we will help you to save money on your business mobile phones bills. We will share some tips and tricks that the industry insiders don’t want you to know. By using this information you will put yourself in the best position to secure the best deal the next time you renew your mobile phone contract.

Consumer mobile phone tariffs are heavily regulated by Ofcom (the telecommunications regulator) but business tariffs are not so well protected. Therefore business customers need to be extra careful that they are getting the best deal. So don’t always trust your network provider to always give you the best deal, read our blog and follow the steps:

There are 2 categories of mobile phone contract. Sim-only and Handset tariffs.
  • A sim-only contract provides you mobile airtime & data only.
  • A handset tariff includes the airtime and a phone

Handset Tariffs
The majority of phones (in the consumer and business world) are still bought as part of a mobile tariff, these are called “Handset Tariffs” in the industry.

Its part of the legacy of the mobile industry, who are trying to keep their average revenue's high to report to the financial markets, all of which is at odds with savvy business owners of today

The total value of the mobile tariff is artificially increased so the network can make enough revenue to fund the cost of the device + their margin which is opaque to the end user. The increasing value of mobile devices leads to increasing value of airtime contracts. Mobile networks will also build in some extra buffer for customers that bad debt and you will be paying for this.

Also at the end of the tariff you may also stay on this higher monthly amount even if you have paid for the phone in full. When you do this, you are what is known as a sleeper and this is where mobile networks having paid for the handset cash in.

Sim Only

A SIM only deal will offer you the minutes, texts and data you need but without the cost of paying for the hardware.

As the name suggests you only get the “Sim” or the data, calls and texts that come as part of the plan. There are then three options for the handset

  • Use an existing handset
  • Buy a new handset with cash
  • Buy a refurbished handset (Find out about the best way to buy refurbished here)
  • Lease a handset (Find out about why leasing is the most optimised way of buying tech for your business here)


Let’s look at some real world examples.

I compared the pricing of handset tariffs on Vodafone business to the Sim Only pricing Klyk has secured from O2.

Example 1: iPhone 11 64GB 

An iPhone 11 64GB on a 6GB data plan costs £45 a month on a 24- month contract plus £40.83 upfront, costing a total of £1,120.83 over the 2 years.

If we compare this to buying the phone outright and going on an 8GB Sim Only plan on the O2 network this comes to a total cost of £943.50.

A saving of £177.33!

So the message is simple. Handset tariffs are more expensive. Buy your phone and then take out a sim only contract. We call this “Unbundling”.

But one of the problems of buying the phone outright is finding the cash upfront to do this, this is especially hard if you are starting a new business and you want to invest in people and marketing.

We strongly recommend all business owners to not spend cash on devices that ultimately depreciate. Leasing is the smartest way to buy your tech & we go into a lot more detail on the benefits of leasing here.

Using a broker vs going direct

We recommend using brokers like us as we help you navigate the murky world of mobile telecoms. We see our roles as being a navigator for your business to get you the best deals. We work closely with the mobile networks & will present the case for your business and especially in the case where you have more than 10 lines, we can really get bespoke pricing to bring your costs down. When it comes to customer service, no need to spend ages on hold to a call centre or waste time explaining the situation - you will get a dedicated account manager who you can contact anytime by call, text or whatsapp message to solve any issues.

Other Reasons to go “Sim Only”

Mobile phone networks love people called “sleepers”.
We have all done this, we forget to move over to a lower tariff when we have come up to the end of our 2 year “handset tariff”. On our bank statement review we spot a really high bill and look into it and its been several months since the end of the contract.

Up until now mobile phone companies have been under no obligation to remind you to move across to a cheaper tariff. This does not apply however on a business contract - mobile networks do not need to remind you. Ofcom are trying to change this but on a sim only contract you are just paying for the airtime & whilst you may be able to get a better deal, at least you have the confidence of not paying more than you should for your contracts.

Flexibility

You don’t need to commit for more than 24 months. The reality of hiring is that sometimes things don’t work your or business needs change. Handset tariffs with rising costs of the actual devices are moving to 36 months, which create a really inflexible environment. Coronavirus has clearly taught us the need for our businesses to stay as flexible and agile as possible.

You will pay a bit more for a shorter contract on a monthly basis but this is cheaper than buying out a longer month contract. This also means that the business decision on upgrading phones can be taken separately. At Klyk we would recommend closing a refurbished phone as new phones lose as much as 50% of their value in the 1st year so buying a used phone in a good condition is a lot more cost effective.

Spend Caps

And Don’t for get to ask for spend caps, these limit how much each individual line can spend over the monthly tariff. This is an important tool if you have a number of lines in your business and stops nasty surprises.

Don’t do tech Funds

Bigger businesses with a number of lines might have been offered something called a “tech fund”. They are basically where you have a budget of hardware you can draw down upon. You should avoid this at all costs. Its another way of telco businesses to confuse and be opaque on their margins. They will inflate the cost of the devices that you "minus" from your hardware funds and they will wow you with large hardware funds knowing you won't use them. Often they will include clauses where you cannot reclaim any hardware fund not re-used. Also a watch out is they will increase the value of the tariff to accommodate for the tech fund, so make sure you compare apple's for apple's!

The message here is simple. Choose sim only and “unbundle” your mobile tech from your sim only contract. Ready to make the change, visit our helpful unbundling page or book an appointment with one of our specialists here.

Stay flexible!

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