In mobile communications, there are already quite a few acronyms and abbreviations. Sometimes though, the same acronym can be used to represent multiple things which can cause confusion. One such acronym that people in mobile communications often use is SIMO. For someone closer to network engineering, SIMO is a technology used in wireless communications and stands for Single Input Multiple Output. But that’s not what this post is about. This post is about the commercial side of mobile communications where pricing and propositions teams use the term SIMO very frequently and even publish on their websites.
In mobile communications, the term SIMO is often used by commercial teams to refer to mobile tariffs that allow customers to buy SIM Only deals. These deals allow customers to purchase a mobile service (or airtime) from their service provider on contract but they have to buy the phone separately.
How mobile service providers create SIMO tariffs
When mobile service providers create mobile plans, they use a range of price-points for the various combinations of minutes, texts and data. For example, let’s assume that a service provider wants to price 500 minutes & texts with 5GB of data at £10, and unlimited minutes & texts with 30 GB of data at £30. In that case, the service provider will still need to create additional price points between £10 and £30 to offer enough choice to its customers. To do that, the service provider may need to create extra price-points for e.g. 10GB, 15GB, 20GB with certain amounts of minutes & texts.
This process becomes more complex when mobile phones are involved because then the price-points have to factor in the device costs also. Device costs vary a lot and require the service provider to create a range of price-points so that they can charge for the service (minutes, text, data) whilst also being able to recover the device cost. Due to factors like competition, regulations and inflation etc. the prices have to be updated continuously which can be operationally challenging if there are too many tariffs.
Is it worth buying a SIMO (SIM-Only) deal?
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 principle, 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. It allows you to choose the device without having to worry about the dependency on how many minutes, texts and GBs of data you are getting. On the other hand, unless you already have a device, it puts you in a position where you either have to pay for the device upfront or finance it separately which is not guaranteed to be cheaper.
For customers, this decision can be tougher at a time when a new technology is introduced. For example, at the time of writing (Aug 2020), 5G is relatively new in the UK and it hasn’t reached all areas yet. At this time, the prices for 5G devices are higher but as the technology gets more widely deployed (or common), there may be more device options available on the market which may bring the prices down. Have a look at this post on 5G phone subscriptions.
If you live in the UK, you can find some competitive SIMO deals (SIM-Only) by clicking here.
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