Sainsbury’s launches new PAYG mobile service

Sainsbury's has launched a mobile phone service. We take a look at how it compares to the other current deals on offer.

Sainsbury’s has become the latest supermarket to enter the mobile phone market with a range of pay-as-you-go (PAYG) bundles.

Mobile by Sainsbury’s has been created with Vodafone and will allow customers to collect up to £180 in Nectar points per year.

Bundles start from £10 a month for 200 minutes, unlimited texts and 250MB of data, providing a competitive deal in the over-crowded mobile market.

Mobile by Sainsbury’s

The PAYG bundles from Sainsbury’s come in three options.

After the £10 bundle, there is one for £15, with 300 minutes, unlimited texts and 500MB of data. The third costs £20 and includes 800 minutes, unlimited texts and 1GB of data.

Sainsbury's says the whole idea behind the launch is to help customers who are ‘feeling the pinch’. It’s clearly aimed at the supermarket's shoppers as those who sign up to a mobile package get an extra benefit of double Nectar points when buying groceries or petrol at the shop.

The supermarket estimates that a family of four who have the £10 bundle and are spending the UK weekly average on food and petrol could earn back £180 in a year in points.

Phones can be topped up from £5 and there is also a ‘Borrow a Pound’ service which allows customers an emergency £1 credit if they need it. That sum will be taken off their next top-up.

However, one downside is the cost of the phone. As only PAYG bundles are available, the price isn’t included in the deal, so you need to factor that in.

How does it compare?

Tesco and Asda have already been in this market for quite some time. They run off the o2 and Vodafone networks respectively and offer a range of PAYG and pay-monthly contracts.

To use the Sainsbury’s deal, you’ll need to buy a phone separately and this means you’re not tied into a long contract. So you can change the phone whenever you want, and make money by re-selling it. And if you're not interested in a top-of-the-range phone you could save money as mobiles are available from £7.95.

But there are downsides too. If you are a gadget-fiend and have to have the latest model, you’ll also need to have the funds to pay for it. If you don't have the money, then a contract phone may be a better option.

Monthly PAYG costs

When looking at a basic PAYG deal you can see the price difference below. On top of this you would need to add the phone price, which if you’d picked the iPhone 5, for example, would be £529.

So if you combined a new iPhone 5 with any of these supermarket tariffs, the total cost  would be £649 which is a lot. But you'd also have the flexibility to sell the phone whenever you wanted. iPhone 5s are currently selling on re-selling sites for around £300.

Basic supermarket phone tariffs

All three deals from the supermarkets are pretty similar, but Tesco offers the highest amount of data and the most minutes whereas the other two offer more texts.

Tesco also offers contracts for 12 or 24-months and with these the price of the phone is factored into the monthly cost so you’re not having to pay outright for it.

However, the offer from GiffGaff is far more attractive because as well as unlimited texts, it also offers more minutes and a far greater internet allowance.

The verdict

It’s encouraging that Sainsbury’s has entered into this market, as it forces other providers to up their game for fear of losing customers.

However, it’s not the best deal around and although it is competitive it will only really benefit Nectar shoppers because of the bonus points.

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