LAST UPDATED: November 18th 2009
November 10th has come and gone, and O2 is no longer the sole iPhone provider in the UK. I already have an article describing the cheapest way to get an iPhone on O2, and to be honest, the pricing from Orange is quite similar – there’s no price war at the moment. But there are a few differences that could make it worthwhile choosing Orange as your iPhone network, if you’re basing your decision on price alone.
So, read on for a quick guide highlighting the total cost of ownership for a pay monthly iPhone on Orange (the Pay As You Go article will be along shortly…)
PAY MONTHLY
Orange currently sell the 8Gb iPhone 3G and the 16/32Gb iPhone 3GS.
Monthly Tariffs
You can choose between five tariffs, ranging from affordable to a significant amount.
| Cost | £29.36 | £34.26 | £44.04 | £73.40 | £122.34 |
| Minutes | 150 | 600 | 1200 | 3000 | Unlimited |
| Texts | 250 | 500 | 500 | 500 | Unlimited |
All minutes are cross-network, and tariffs include unlimited voicemail. It also includes data which Orange describes as “unlimited”, but is in fact limited to about 750Mb, dependent on their fair use policy.
If you sign up to the £122 per month tariff, then you also get 100 roaming minutes as well.
There may be an up front payment, conditional on your chosen tariff and length of the contract – either 18 or 24 months.
| Initial Cost of iPhone | Monthly Tariff | |||||
| iPhone version | Contract Length | £29.36 | £34.26 | £44.04 | £73.40 | £122.34 |
| 8GB iPhone 3G | 18 | £96.50 | £96.50 | – | – | – |
| 8GB iPhone 3G | 24 | – | – | – | – | – |
| 16GB iPhone 3GS | 18 | £184.50 | £184.50 | £87.00 | – | |
| 16GB iPhone 3GS | 24 | £125.00 | £87.00 | – | – | – |
| 32GB iPhone 3GS | 18 | £274.00 | £274.00 | £175.00 | £96.50 | |
| 32GB iPhone 3GS | 24 | £225.00 | £175.00 | £96.50 | – | – |
Adding the initial cost of the phone to the monthly tariff (over the life of the contract), the total cost of ownership for each model of iPhone is as follows:
Total Cost of Ownership
| Total Cost of Ownership (over the length of the contract) | Monthly Tariff | |||||
| iPhone version | Contract Length | £29.36 | £34.26 | £44.04 | £73.40 | £122.34 |
| 8GB iPhone 3G | 18 | £624.98 | £713.18 | £792.72 | £1,321.20 | |
| 8GB iPhone 3G | 24 | £704.64 | £822.24 | £1,056.96 | £1,761.60 | £2,936.16 |
| 16GB iPhone 3GS | 18 | £712.98 | £801.18 | £879.72 | £1,321.20 | |
| 16GB iPhone 3GS | 24 | £829.64 | £909.24 | £1,056.96 | £1,761.60 | £2,936.16 |
| 32GB iPhone 3GS | 18 | £802.48 | £890.68 | £967.72 | £1,417.70 | |
| 32GB iPhone 3GS | 24 | £929.64 | £997.24 | £1,153.46 | £1,761.60 | £2,936.16 |
There is a question of whether TCO is a useful comparator – after all the benefit of a 24 month contract is that you get 24 months of service. However, especially now that networks are prepared to unlock iPhones once they are out of contract, you can move networks once your contract period – which is effectively a higher purchase scheme – has expired.
To me, this means that TCO indicates the cost to you to buy the iPhone outright, after which you can choose your level of monthly payment.
What can we see from this?
If you want an 8Gb iPhone 3G
Providing you can weather the up-front payment of £96.50, there’s no benefit at all in taking a 24-month contract. TCO is lower with an 18-month contract.
If you want a 16Gb iPhone 3GS
Providing you can weather the up-front payment of between £87 and £184.50, there’s no benefit at all in taking a 24-month contract. TCO is lower with an 18-month contract.
If you want a 32Gb iPhone 3GS
Providing you can weather the up-front payment of between £96.50 and £274, there’s no benefit at all in taking a 24-month contract. TCO is lower with an 18-month contract.
8Gb or 16Gb?
You’re better off getting a 16Gb. A 16Gb iPhone is cheaper (in some cases significantly cheaper) over the life of an 18 month contract compared to an 8Gb iPhone over a 24 month contract.
You can take a 16Gb (with an initial payment) on an 18 month contract, and it’s cheaper than an 8Gb on 24 month contract every time.
16Gb or 32Gb?
A 32Gb iPhone is cheaper (in some cases significantly cheaper) over the life of an 18 month contract compared to a 16Gb iPhone over a 24 month contract.
You can take a 32Gb (with an initial payment) on an 18 month contract, and it’s cheaper than a 16Gb on 24 month contract every time.
18 months or 24 months?
Except for the initial payment, at no point does taking a 24 month tariff save you any money.
Should I get an iPhone 3GS on the £122 tariff with a 24 month contract?
What? Are you nuts? That’s almost THREE GRAND you’re spending. If you are that silly with your money, at least choose the 32Gb version. Why would anyone choose an 8Gb iPhone 3G, or even a 16Gb 3GS at this price?
A neat little trick to cut even more off your bill
Orange Terms and Conditions allow you to drop your tariff by one tariff band after 9 months on an 18 month contract, and 12 months on a 24 month contract. Presuming you have enough minutes and texts on a cheaper bundle, you could (for example) drop down from the £73.40 tariff to the £44.04 tariff.
| Total Cost of Ownership (dropping tariff at 9 or 12 months) | Monthly Tariff | |||||
| iPhone version | Contract Length | £29.36 | £34.26 | £44.04 | £73.40 | £122.34 |
| 8GB iPhone 3G | 18 | £669.08 | £704.70 | £1,056.96 | ||
| 8GB iPhone 3G | 24 | £763.44 | £939.60 | £1,409.28 | £2,348.88 | |
| 16GB iPhone 3GS | 18 | £757.08 | £791.70 | £1,056.96 | ||
| 16GB iPhone 3GS | 24 | £850.44 | £939.60 | £1,409.28 | £2,348.88 | |
| 32GB iPhone 3GS | 18 | £846.58 | £879.70 | £1,153.46 | ||
| 32GB iPhone 3GS | 24 | £938.44 | £1,036.10 | £1,409.28 | £2,348.88 | |
The above table shows “monthly tariff” as the starting tariff when you sign up for the contract, and assumes you drop down by one tariff band for the remaining term of the contract, e.g. You sign up for an 18-month £44.05 monthly tariff, choosing a 16Gb iPhone, then after 9 months, drop down to £34.26. TCO over this contract length will be £791.90.
Savings over the contract term, compared to sticking with your starting monthly tariff, are therefore:
| Savings (dropping tariff at 9 or 12 months) | Monthly Tariff | |||||
| iPhone version | Contract Length | £29.36 | £34.26 | £44.04 | £73.40 | £122.34 |
| 8GB iPhone 3G | 18 | £44.10 | £88.02 | £264.24 | ||
| 8GB iPhone 3G | 24 | £58.80 | £117.36 | £352.32 | £587.28 | |
| 16GB iPhone 3GS | 18 | £44.10 | £88.02 | £264.24 | ||
| 16GB iPhone 3GS | 24 | £58.80 | £117.36 | £352.32 | £587.28 | |
| 32GB iPhone 3GS | 18 | £44.10 | £88.02 | £264.24 | ||
| 32GB iPhone 3GS | 24 | £58.80 | £117.36 | £352.32 | £587.28 | |
Extras with Orange
Magic Number
Orange offers iPhone Pay Monthly customers “Magic Numbers“, allowing you to nominate one number to call free, subject to a three hour maximum single call duration. One additional Magic Number is granted every six months.
There also the Orange Wednesdays app that’s available from the App Store, which gives you 2-for-1 on cinema admissions every Wednesday.
Conclusion
There’s nothing special about the Orange pricing for the iPhone compared to O2 – we’re talking pennies difference (I’ll look at the different options in a future article).
Even though the total cost of ownership is the same, the lowest tariff does gives you a better minutes and text bundle, especially when you throw in the Magic Number.
Also, there is an unlimited option that O2 does not offer, but you’ll be paying dearly for it at £122 a month.
So, the price war may have to wait until Vodafone launch with the iPhone in 2010. For now, coverage rather than price may be a better indicator of which network you should choose to buy your iPhone on. The future’s bright, the future’s… non-exclusive 
—
Have I missed anything? Please let me know in a comment and I’ll add it to the article.
Also, you’re welcome to download this table with my price calculations.