The prices for 12m are highly uncompetitive universally, without charging high prices the contracts barely break even for services provided to give you some example of the cost to serve/device.
They exist for a tiny market these days, people who MUST have the latest devices but can't afford to buy them outright or perhaps impulsive high incomes etc... You won't typically find this type of person on OCUK but if you're short of time and just want the BEST device because you're a powerful executive with little time and high income or perhaps you're spending someone elses money, ta da.
This is *not* always the case when including incentives. I am a 12 month plan user with vodafone over my previous two phones.
I got a Blackberry 9900 in August 2011 with Vodaone on a 12 month plan.
I paid £99 upfront, and £46 a month for 12 months.
This would be a total of £651.
I upgraded to a sim only plan as soon as I could, 60 days prior to the end of my contract; it went onto a 3 month plan where I paid £21 a month, I believe. This three months was added onto the end of my contract, but the pricing started immediately, meaning my cost for the phone and 12 months of service was
£99 + 10*46 + 2*21 = £601
I also recieved £181 cashback via Topcashback for this plan. This brought it down to £420.
The phone sim free in August 2011 was £520. Including my extra 3 months of service I had to pay to be 'off contract' after 15 months, I paid £483. Less than the price of the phone SIM free.
I stayed with vodafone on a month to month basis until the Blackberry Q10 was released.
I had zero upgrade fee for the Q10 in April, 2013. My plan was £57 a month, with a £12 discount pre-VAT, which brought the price to £42.6 a month. Once again, I paid this for 10 months, rather than 12 due tot he early upgrade clause.
I then signed onto a 12 month sim only contract in Feb, which with Vodafone allows you to break at any time to start a contract with a phone. This cost £15.50 a month, but I was credited £24 to bring that down to £13.50 equvilant. I also get free Spotify premium for the entirity of this contract.
For the 12 month period, I paid (without overages due to useage abroad etc) £453. The Q10 was launched at £579. Once again, less than the price of the phone sim free. Of course, I am now under a 12 month sim only commitment, but even if I take that into account until my 'early upgrade' kicks in 60 days early, the cost is £588, only slightly more than the phone itself. I can however cancel and start a phone + plan contract with Vodafone at any time, meaning that £588 is not all that meaningful.
In addition, I paid for spotify anyway, so getting it for free can be considered a saving off the contract price for me.
So, in the first case, as I am still a student, the £453 for the Q10 is reduced to £443 for 12 months.
If you look at it for the 'full commitment', ignoring the break clause in the contract, I could only have paid the student price for Spotify until next month, so, from August onward, until my Feburary 2015 early upgrade, it would be a saving of £10 a month.
Thus
£443 for 12 months, (13.5-5 * 3) for May, June, July, then (13.5-10 * 7) for the remaining period until my next early upgrade date, Feb 2015.
This totals £493.
£493 is my effective cost from April 2013, to Feb 2015 for a Blackberry q10, and 22 months of service. Less than the device Sim Free at launch.
If I did not include the spotify benefit in that, the cost is £588, £9 more than the phone at release. Still a good deal.
12 month contracts are NOT only for the crazy users.
