Tesco Mobile Offers Cheapest SIM-Only Deal

Tesco Mobile has launched a new tariff, which it claims is the cheapest SIM-only deal in the UK.

For just £6 per month, users are offered unlimited texts and 100 minutes of free talk time. The deal is available online and over the phone, and the contract is on a rolling basis, allowing customers to renew it monthly or opt out at any point. Users also receive Tesco club card points with each monthly bill.

Not suitable for smatphones

There is no Internet access included, so the deal is not suitable for smartphone customers.  However, Tesco Mobile is expecting eager uptake amongst bargain-hunters and younger users.

“This deal is ideal for a younger market or any text addict out there who doesn’t want to have to fork out a large amount each month but still wants to use their mobile to their heart’s content,” said Tesco Mobile boss Lance Batchelor. “We’ve seen a big increase in SIM-only mobile tariffs as savvy spenders hang on to their handsets and shop around for the best tariffs available.”

The news comes after recent research by Tesco Mobile showed that 16- to 24-year-olds are the highest spending age group for mobile contracts, with 31.6 percent spending more than £30 a month on their mobile bills.

Tesco already offers a £10 pay-monthly SIM deal, which provides 250 minutes of talk time plus unlimited texts and 3 months of unlimited data.

iPhone price war

Earlier this year, some industry commentators speculated that the addition of Tesco Mobile to the flock of operators offering the iPhone 4 in the UK might drive a price war. However, Apple has been keeping prices under tight control, and Tesco ended up offering the device for just £1 less than Apple itself.

However, prices for other versions of the Apple phone have been creeping down, and Tesco did last week announce new pricing and tariff plans tailored for iPhone customers.

The 8GB iPhone 3G is now available from Tesco for £100 with a new 12-month contract, paying £35 per month. Tesco customers can also get their hands on the 16GB iPhone 3GS for £200, or the 32GB iPhone 3GS for £275 on the same basis. The plan includes unlimited texts, data and Wi-Fi, and 750 free voice minutes each month.

Meanwhile, the O2 network (on which Tesco Mobile runs) has started shipping the iPhone 4 on a pay-as-you-go basis. O2 customers will have to pay £595 for a 32GB model or £495 for the 16GB version – £25 more than both Orange and Vodafone are charging for the handsets.