Before the days of sophisticated mobile phones, or ‘smartphones’ as they are now known, the cost of acquiring the latest models rarely broke the bank. 10 years ago, even the most premium of premium handsets would retail for no more than £450.
The all-inclusive network contract also took care of financing these devices. It was this very in-contract ‘financing’ that led customers to believe that mobile phones were provided for free, as part of the network agreement.
Cut to today, the cheapest Apple handset from the 2018/19 range retails at £749 (iPhone XR 64GB), with the most feature-packed costing a whopping £1,250 (iPhone XS Max 256GB) and the new 5G Samsung S10 phone is retailing at an eye watering £1100.
In basic terms, today’s pricing means you’ll pay a higher than ever monthly amount for your new mobile device. You’ll also notice, your £60 – £80 monthly payment to the network includes an absurd amount of internet data, which you and your employees will struggle to fully utilise.
If you do push for a more realistic amount of data for your users, then guess what, the network makes the sale less of a drain on it’s own cash-balances by requiring an upfront contribution for the hardware, sometimes as much as £500 per handset.
So, where is this flexible middle-ground that networks talk about so often? How does a business pay only for the data it’s employees need, without haemorrhaging cash to acquire the latest models?
The answer (yes, you guessed it) is mobile phone leasing.
Since 2014 Lease Telecom has arranged mobile phone leases for 1000s of business customers nationwide. Businesses big and small, from public and private sectors have renewed their handsets via flexible and cash-flow friendly leasing agreements.
The model is simple and makes total sense of bill separation.
As a business, you’ll understand the importance of cash-flow, and how making prudent choices at the start of a 24 month contract can make you thankful when the hard-times hit.
Mobile phone leasing is essentially finance, so you can expect to spread the cost of a £749 handset over a term that suits (anything between 12 and 36 months). There will be a rate of interest on top of the repayment, but nothing near what you might expect. In fact, we have financed lease contracts for as little as 3% per year.
Leasing gives you the flexibility to keep or return the handsets at the end of the agreement, it’s up to you. If you plan to return the handsets, this can open up even more cost-saving discussions, such as applying residual values of up to 25% against the expense.
The rental agreement available from Lease Telecom is fully tax deductible, so there’s peace of mind for your Finance Manager when it comes to your company’s annual return.
Once you’ve decided on your handsets and selected the preferred term to lease the handsets for, you are now in a position to shop for a SIM only airtime agreement that suits your calls, minutes and data usage. Business SIM only plans are much more widely available and can be sourced from any of Lease Telecom’s Partners. If you want to limit data usage to 2GB per employee, then a 2GB data plan is what you need, and can cost as little as £12 per month!
Unlike network contracts, leasing contracts do not carry large upfront costs. There is usually a documentation fee which is payable with the first month’s instalment, but this can be amortised across the term too.
So, with your new lease agreement alongside your new SIM only plan, you should find you are much better equipped in both technological and commercial senses, and for only a fraction of the upfront and ongoing cost compared to a one-size-fits-all network agreement.
Businesses tend to save £100s per user when they combine a handset lease with a business SIM only plan, so if there’s ever a reason to buck the trend from previous mobile contract renewals, why not take a look?