Is A Free Laptop Actually Free?

Phone companies are falling over themselves to offer us 'free' laptops - if we sign expensive mobile broadband contracts first. Is it worth it?

It's just like mobile phones in the late 1990s. Over the past few months, laptops have stopped being expensive, serious investments, and become something that companies try to give away for free.

Today, as I walk through London, a poster in the window of Curry's screams 'FREE LAPTOPS'. Flicking through the pages of the Times, a large Carphone Warehouse advert entices me to sign up for a sweet little micro-laptop with a 10.2 inch screen. And so on.

What's going on? Well, a truly free laptop is about as likely as a three courses on the house at Gordon Ramsay. As Fools will have guessed, these laptops come with expensive data contracts attached, just like a mobile phone. Only this time the contract is for mobile broadband, not mobile phone-calls.

Internet anywhere

With a mobile broadband contract, you can connect your laptop to the internet for free, either at home or out and about.

You plug in a USB modem and click 'connect' and - as long as you're within coverage - you can catch up with the latest Fool articles on the bus or on the beach. So it's far easier than battling with wireless routers at home or hunting for wi-fi on the move.

Mobile broadband contracts have been around for a while. But companies have only recently started trying to get new customers to sign up by dangling a free laptop in front of their nose.

A cynical friend explains to me that that's because the mobile companies overpaid hugely for the 3G spectrum (the networks that carry mobile broadband data), overcharged ludicrously for data, found that hardly anyone used it, and are now desperate to recoup some of their money by slashing prices and attracting new customers.

(Hardly surprising that no-one signed up, when PC Pro magazine once calculated that downloading 20GB on a Vodafone mobile tariff would cost the same as a semi-detached house.)

That doesn't bother me at all - desperate companies usually mean great deals for customers. The question in my mind is whether these 'free' laptops are worthwhile, or whether you're better off snapping up one of the sub-£300 laptop deals identified by my Foolish colleague Szu Ping Chan and paying for your own data.

Free... sort of

I'm writing this on an Asus Eee 900, one of the ultra-mobile laptops reviewed by Szu Ping, and I can't recommend it highly enough. It's cheap, cute, and most importantly for a laptop that gets carried round in a handbag, tough as old boots. It's survived being dropped numerous times, and even - though I wouldn't recommend trying this at home - having an entire glass of Sauvignon Blanc poured over the keyboard (whoops).

I bought my Eee off the shelf in America, for just under £300, and have a data contract with Three. However, if I'd waited until this month, then I could have got one for free... sort of. Orange are offering new mobile broadband customers free Eee 900s with a 24-month mobile data contract. For £25 a month, you get 3GB of data (fine for ordinary browsing, not enough for YouTube marathons or online gaming) plus 100 text messages.

Let's do the numbers. On the contract, over two years, you'll give Orange £600. But if you bought the laptop and data independently, you could now pick up the same Eee in black for just £222 (or white for around £250). Orange's stand-alone 3GB data contract is £15/month for the same deal, and only locks you in for 18 months. Comparing like with like, if you were with Orange for 24 months, you'd give them £360 - a total of £580 (or £610 for the white model).

So in fact, the free laptop deal is not a bad deal financially, especially since you don't have to put any cash down upfront - Orange effectively lets you pay by installments, at a discount.

Some have criticised Orange for offering an older version of the Eee (the 901 and 1000 models are now available). However, Asus have an annoying tendency to release slightly tweaked versions roughly every five minutes, so I wouldn't take this too seriously - and I'm very fond of my 900.

Nevertheless... I wouldn't touch this deal with a bargepole.

That's because Orange's customer service is notoriously poor - though it used to be legendary. Customers grumble that it's nose-dived since the company was bought by France Telecom. Now, Orange is the only large provider actually losing broadband customers.

Shop around

Instead, I'd shop around at PC World, Currys, and Carphone Warehouse, which all have heaps of laptop offers, from tiny 9" ultra-mobiles to Vaios, and have deals with Three, T-Mobile, and Vodafone, among others. There's a useful comparison of some of these offers at Broadband Expert.

All have similar pricing structures to the Eee deal above: you sign up for 18-24 months and pay roughly the cost of laptop plus data contract overall. Of course, none of these deals are remotely worthwhile if you don't plan to use the internet with your shiny new laptop!

If you do, then the first thing to bear in mind is reception. If you don't have decent 3G coverage in your area, then you could end up with a very expensive paperweight. Check your area is covered before you pick your network (you should be able to do this on the network's site).

Next, once you've found a laptop you like, shop around to check the combined price of buying it and a data contract separately (Broadband Expert again). And watch out for the hidden costs of mobile broadband, particularly if you think you might use more data, or travel abroad.

Alternatively, if you just want to go mobile occasionally, a low-cost, low-commitment option is pay as you go mobile broadband, where you buy data for 30 days at a time. And it should also be possible to pick up a laptop for less than £200.

There's an excellent intro to mobile broadband at PC Pro, which also compares Orange, Vodafone, O2, Three and T-Mobile (including typical download speeds). Happy surfing!

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