Contract... no phone.. what am I missing here.
Fully contract and Pay-As-You-Go are not your only options. The third option is contract without the phone thrown in. This is called SIM only contract which is what I'm on.
A SIM only means you're not paying the premium of having the phone. And if you manage to find an amazing deal, you can stick with it rather than being forced to go to the latest deal because it's upgrade time for your phone. The price of the Nexus 4 will see many more people take this path unless the full contract prices fairly reflect the cost of the device itself.
So here's a comparison purely on the Three network based on my current plan:Nexus 4 16GB (SIM contract + Phone)
Minutes: 2000iPhone 5 16GB (Full Contract + Phone)
3to3 Minutes: 5000
Internet Allowance: Genuinely Unlimited (I have downloaded many GBs of torrents recently)
Device: Nexus 4
24 Month Theoretical Price: £11.62/m
Total Monthly: £21.62/m for 24 months
3to3 Minutes: 5000
Internet Allowance: Genuinely Unlimited
Device: iPhone 5
Upfront Cost: £79
Total Monthly: £39/m for 24 months
I'm making a massive saving. Why? Because being SIM only meant I had the freedom to stick with an old plan and keep any discounts I managed to get from Three. But new SIM only customers have to pay £25/m meaning very little saving for the above comparison. So either wait for the full contracts for Nexus 4 to be announced and hope they play fair and therefore offer a monthly price that reflects the cost of the device. Or look at SIM only contracts on other networks.
The SIM only contracts have not been that popular because the prices of the top devices have been so high. But the Nexus 4 being so cheap might start a big price war. So next time you're due an upgrade, make sure you compare SIM only contracts with the device price before making your decision. Ask yourself whether you really need a new phone, and if not, ask your network how much it will cost if you stay on your contract without upgrading your phone. And ask them if they can reduce the price to keep you as a customer. If it's a good price then stick with it and have the freedom of buying a new phone when it makes sense for you.