TalkTalk launches Britain's cheapest smartphone deal

A new mobile deal has been launched which promises to be the cheapest ever. Let's see how TalkTalk's move into mobile phones compares to the rest of the market.

Smartphones are expensive and for most top-of-the range models, even if you manage to secure a good-value deal, you’ll probably have to cough up for the phone or lock yourself into at least a two-year contract.

That is why when the latest deal from TalkTalk, which has no upfront handset costs, was launched I wanted to take a closer look to see how it compares to other offers on the market.

Is a £5 a month smartphone contract too good to be true?

The TalkTalk deal

TalkTalk, which has partnered with Vodafone for these new deals, says it wants to shake up the smartphone market by stripping out unnecessary costs. Customers can buy over the phone or online – but those using the online version will get double the data allowance in their package, for exactly the same price.

All of its main contracts are available for 24-months, though there's also the option of a monthly rolling sim-only contract. And there are several handsets to choose from including the Samsung Galaxy Y, BlackBerry 9320, HTC One X, HTC Desire C and Samsung Galaxy S III.

How is it any different?

The key selling point is that you don’t have to pay out any extra for the handset. However, despite it being cheapest in terms of cost, it doesn’t offer as much in terms of minutes, texts and data as other contracts.

Therefore, it would be best suited to 'light' smartphone users. So before you sign up, make sure you’re not going to go over the allowance as this will lead to higher monthly bills.

The contracts available

Depending on how much data, calls and texts you need you can choose from a small, medium or large plan. Prices for each vary depending on what handset you go for, but the 'small' packages start at £5.

The catches

Before you head over to sign up to the deal, remember that as with any offer that seems too good to be true, there are catches involved. For starters, it’s only available to existing TalkTalk phone and broadband customers.

It's also worth remembering that there has been a lot of negative press around the company in the past year and it topped Ofcom’s broadband complaints list again this summer. Although mobile is a brand new thing for the company, its previous record could prove a barrier to the number of new customers who may sign up.

The TalkTalk deal is also not available on all handsets - popular models such as the iPhone are left out.

And all of the contracts last for 24 months, a really long time in a dynamic market like mobile phones. If you want to leave earlier there will be a penalty charge.

How does it compare to the rest of the market?

Obviously the amount you pay will depend firstly on how many minutes, texts and data you use and secondly the kind of handset you want. The cheapest 'small' package with TalkTalk doesn't give you a lot of leg room and if you go over your allowance the costs of calls are 30p a minute while data is a hefty 5p per MB.

Our comparison tables will give you a full review of the market. But when looking at the available contract deals for the Samsung Galaxy S2, for example, TalkTalk’s offering looks favourable - based on cost alone it is one of the cheapest deals.

In fact the only deal to beat it in cost comes from T-Mobile, but you need to stump up £260 for the handset at the start to qualify.

Sim-only deals

If you’re not interested in the handset a sim-only deal is a good option. This means you won’t be stuck in a long contract, which usually ends up being more expensive.

If instead you were to buy a new phone outright and then sell it a year later you’d be able to get back nearly all of the value you have originally paid so long-term this is the cheapest option. This is explained in more-depth in our article on how to get the cheapest smartphone as it all depends on if you’ve got the capital to buy a new phone in the first place.

Again, you can choose from a choice of three deals of; £5, £10 or £15 for the one-month sim-only deal.

TalkTalk’s deal is competitive but it’s not the only option. When looking at sim-only deals, GiffGaff provides a better package which includes 250 minutes and unlimited data and texts for £10.

What to do with your old model

If you’ve decided to upgrade your phone you can make some money on your old model, either by selling it or recycling. This can be used against the price of a new model and our article on the best ways to make money from your old mobile explains the best way to do this.

More on smartphones:

How a smartphone can save you money

The smartphone app scam

Pay as you go phones are better than a contract

Which mobile phone insurer is the best value?