Every one of us has experienced that desire to own the latest smartphone to be announced, even if our existing phone is the model it replaces, and is therefore is almost certainly still capable of performing its duties. However, thanks to the joy of 24-month contracts, it’s not always possible to fulfill that desire. Vodafone UK feels our pain, and has come up with an intriguing solution, a new tariff named Red Hot. It turns the traditional mobile contract on its head and removes the need to plan for a yearly upgrade. Instead, for one monthly fee, you’ll get unlimited texts, voice, and cellular data on top of a brand new phone every 12 months.
Sound too good to be true? Well, it’s not without its drawbacks, so let’s take a closer look at how Red Hot works. Unlike regular plans, you sign two contracts with Red Hot: one for the network and one to lease your phone. Currently, you get to choose between the Samsung Galaxy S3, the Galaxy Note 2, and the Apple iPhone 5, and the monthly plan is the same for all of them: Unlimited calls, unlimited texts and 2GB of data.
If you go for the 16GB Galaxy S3, the Galaxy Note 2 or the 16GB iPhone 5, you won’t pay anything for the device, although if you want an S3 or iPhone 5 with more memory, there will be an extra charge. Your monthly line rental will be £47 ($74), £52 ($82), or £59 ($93) respectively on a 12-month agreement, and the phone will be insured against loss or damage.
After 12-months has passed, you pop back to see Vodafone and they’ll provide you with the very latest device to be released – be that the iPhone 5S or 6, the Galaxy S4 or the Note 3 – as you hand back your old phone, provided you sign a new 12-month Red Hot contract.
Boiled down, Red Hot is a phone leasing scheme for early adopters who don’t care about long-term ownership, but still want the latest hardware on release.
Say that again, £50-plus per month?
Totaled up, a 16GB iPhone 5 on the Red Hot plan will cost £708 ($1124) for a year, at the end of which you’ll have nothing to show for it. Unless you count the new phone Vodafone will give you, of course. Using the iPhone 5 as a guide, let’s compare Red Hot with a regular Vodafone tariff.
Vodafone offer 12-month contracts, where 1GB of data, unlimited texts and 900 minutes costs £46 per month, and the phone a hefty £229 ($363). Purchased this way, the annual total is £781 ($1240), but selling the iPhone 5 at that point could recoup at least a third of that figure.
Sign on the dotted line of a 24-month contract, and you can get yourself 2GB of data, unlimited calls and texts, plus a free 16GB iPhone 5, all for £47 per month. That’s a frightening £1,128 ($1789), and though your phone will probably fetch a couple of hundred pounds on the used market.
The Red Hot tariff slots somewhere in-between the normalcy of a 12-month contract, and the hideousness of a 24-month plan. Although the thought of paying more than £50 ($80) per month will sting – it’s right at the top-end of the scale in the UK, with many expecting to pay half that per month – it’s not ridiculously over-priced.
The first rule of Red Hot is, don’t jailbreak your phone
Dig around in the small print and you’ll find a few restrictions and rules related to the Red Hot tariff. Because the phone isn’t really yours, it’ll need to be looked after, and if you try to return a damaged device you’ll get charged – up to £150 ($240) if you’ve really abused it. However, as the phone is insured, provided you make a few calls before it’s time to upgrade, this shouldn’t be a problem.
If you’re a fan of jailbreaking iPhones or installing custom ROMs on Android devices, and don’t return it to stock before heading back for an upgrade, Vodafone charges at least £300 to £400 ($475 to $635) for a “non-approved operating system.” Swapping the SIM for one from a different provider breaches the contract too.
Ultimately though, all this is to be expected and provided you follow the rules, Vodafone Red Hot comes out looking like good value for money. After all, how many of us sell or pass on our old phones when upgrading anyway; why not cut that part out and ensure we’ve always got the latest, must-have smartphone in our hands, at a reasonable price with a decent tariff attached, every year?