SIMO vs Phone Contract: What is a SIM-only mobile plan?

There are many types of mobile tariffs and SIM plans, so it can be hard to make purchase decisions if you are unsure what they mean. SIMO and phone contracts are the most common tariff types for pay-monthly or postpaid subscriptions.

SIMO or SIM Only is a type of mobile tariff that allows a customer to buy the SIM without the phone. A phone contract is a mobile tariff that includes both the phone and the SIM. The SIM comes with airtime that provides voice minutes, texts and mobile data (e.g. 500 minutes & texts + 10 GB).

What is a SIMO or SIM-Only mobile tariff?

SIMO or SIM-Only mobile tariffs allow a customer to buy a SIM with airtime but not a phone. The airtime is the service bundle that includes voice minutes, texts and data (e.g. 500 minutes & texts + 50 GB). The customer can use an existing unlocked phone in a SIMO deal or buy a new phone separately.

A SIMO or SIM Only plan is a cellular subscription that gives you the calling minutes, texts and data, but you have to arrange a phone separately. You can get a SIMO deal from any mobile operator as long as you have an unlocked cell phone.

However, if your cell phone is locked to a specific mobile operator’s network, e.g. T-Mobile, you can get a SIMO plan from that particular mobile operator (T-Mobile in this example), or you can contact the mobile operator to unlock the phone.

Is SIMO a prepaid subscription or postpaid?

As a general rule, a SIMO or SIM Only tariff is a postpaid (pay-monthly) subscription for the contract duration of 1, 12, 24 or more months. However, a mobile operator may also decide to offer their renewable prepaid or pay-as-you-go (PAYG) tariffs under the SIM Only umbrella.

Generally, a prepaid mobile phone subscription is just a SIM card with some credit. The credit can be used to purchase bundles which can last for up to one month. Therefore, in a technical sense, a mobile operator can decide to sell prepaid subscriptions as SIMO deals. However, conventional SIM Only deals are pay-monthly subscriptions where the contract length is generally 1, 12 or 24 months.

Is there a link between SIM-Only and SIM-free?

The terms SIM-Only and SIM-free are two separate things. SIM-Only refers to the SIM-Only mobile subscriptions where you buy a SIM card without a phone. On the other hand, SIM-free refers to a mobile phone that comes without a SIM card in it.

When you buy a mobile phone from a retail store or online without a SIM plan, that is a SIM-free phone. Ideally, you want your SIM-free phone to be unlocked so that you can use the phone with any SIM card of your choice.

What happens when your SIMO contract comes to an end?

When your SIMO contract comes to an end, your mobile service provider may continue to charge you the same monthly tariff price. However, most mobile operators provide their customers with the option to upgrade to another SIM-Only or phone deal at the end of a contract.

As a customer, you may decide to end your SIMO contract before the contract end date, in which case you need to give your mobile operator notice in line with the notice period specified in your contract. However, your mobile operator will charge you an early termination fee (ETF) to cover the remaining time on your contract.

Early Termination Fee (ETF) is also often referred to as Early Termination Charges (ETC). You must always check with your mobile operator to find out exactly how they calculate the early termination fees.

Is it worth buying a SIM-Only (SIMO) deal?

A SIMO deal is worthwhile if you are happy with your existing mobile phone or if you are happy to buy the phone separately. SIMO service bundles de-couple the airtime from the device, which allows you to flexibly choose the best combination of voice minutes, texts and data for your needs.

SIMO deals can potentially have costs benefits as they keep your monthly costs low, but you still have to pay for the mobile phone or device somehow. As a general rule, keeping your airtime costs (minutes, texts and data) separate from the phone plan can give you more flexibility in terms of which tariff you choose.

A SIMO deal gives you the option to choose your service bundle without any dependency on the device. It allows you to buy a service bundle that gives you enough minutes, texts and data to suit your needs. On the other hand, unless you already have a device, you either have to pay for the device upfront or finance it separately, which is not necessarily cheaper.

Buying a new SIMO deal or upgrading your current tariff to a SIMO contract can be tough when a new cellular technology (e.g. 5G) is introduced because new technology requires you to buy a new phone. The price for devices compatible with new cellular technologies is always higher because they require new expensive hardware (chipset). However, as the technology becomes more widely available, the device prices come down.

Currently, 5G New Radio (NR) is the latest cellular technology that is still in its early phases of deployment. As a new technology, 5G compatible devices are currently more expensive than 4G devices.

I have written a dedicated post on the key considerations for buying a 5G subscription to help you make an informed decision.

Are there any disadvantages of buying a SIM Only (SIMO) contract?

While a SIM Only deal can be cost-effective if you already have a phone device, it does put you in a position where you have to pay for the device upfront if you need a new device. With phone contracts, in contrast, the device price can be split over the duration of your contract, which works out better on a monthly basis.

Some SIMO deals come with discounted offers which can be great in the short term to keep your costs low for a few months, but as soon as the promotion/discount duration is over, the prices go back to the original rate. Therefore, it is important to be aware of any such discounts when you plan your monthly tariff costs.

The other potential challenge with a SIMO deal is if you do not have an unlocked mobile phone. Not having an unlocked mobile phone makes it harder to switch operators due to the extra steps involved in unlocking the phone.

Please note that the above information is my personal view based on my experiences in the telecom industry as a professional and as a customer. You must always check with your mobile operator for any commercial advice.

Here are some helpful downloads

Thank you for reading this post. I hope it helped you in developing a better understanding of cellular networks. Sometimes, we need extra support, especially when preparing for a new job, studying a new topic, or buying a new phone. Whatever you are trying to do, here are some downloads that can help you:

Students & fresh graduates: If you are just starting, the complexity of the cellular industry can be a bit overwhelming. But don’t worry, I have created this FREE ebook so you can familiarise yourself with the basics like 3G, 4G etc. As a next step, check out the latest edition of the same ebook with more details on 4G & 5G networks with diagrams. You can then read Mobile Networks Made Easy, which explains the network nodes, e.g., BTS, MSC, GGSN etc.

Professionals: If you are an experienced professional but new to mobile communications, it may seem hard to compete with someone who has a decade of experience in the cellular industry. But not everyone who works in this industry is always up to date on the bigger picture and the challenges considering how quickly the industry evolves. The bigger picture comes from experience, which is why I’ve carefully put together a few slides to get you started in no time. So if you work in sales, marketing, product, project or any other area of business where you need a high-level view, Introduction to Mobile Communications can give you a quick start. Also, here are some templates to help you prepare your own slides on the product overview and product roadmap.

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