When you sign a business mobile contract, you face a basic choice: take a SIM-only deal and supply the handsets yourself, or take a bundled contract where the cost of the phone is rolled into the monthly fee. As a CFO, I have a strong view on which usually wins - but it depends on your situation.

How each one works

  • SIM-only: you pay only for the airtime (calls, texts, data). The handset is yours to buy outright or reuse. Contracts are typically shorter and cheaper per month.
  • Handset contract: the phone is bundled in and paid off over the contract term (often 24-36 months). One monthly payment covers everything.

The cost truth

Here is the key point: with a bundled contract, you are financing the handset, and that finance is rarely free. Over a typical term you often pay more for the phone than if you had bought it outright, because the cost is spread and marked up.

SIM-only deals, by contrast, are usually much cheaper per month because you are paying purely for airtime. If you can fund handsets separately - or your staff already have suitable devices - SIM-only almost always works out cheaper over time. We dig into more savings in how to cut your business mobile costs.

When a handset contract makes sense

Bundled contracts still have their place:

  • Cash flow. Spreading handset costs avoids a big upfront outlay.
  • Simplicity. One predictable payment, easier to budget.
  • Fleet refresh. Equipping a whole team with new devices at once.

Flexibility matters too

SIM-only contracts are usually shorter, so you are not locked in for years - useful if your headcount changes or better deals appear. Pair SIM-only with data pooling across your team and the savings can be significant.

Don't forget management and security

Whatever you choose, the contract is only part of the picture. The devices still need securing and managing - see what is MDM and mobile security best practices.

The CFO's default

My default recommendation for most businesses is SIM-only with pooled data, funding handsets separately when needed. It is almost always the lower total cost. Our Mobile Products service will model both options for your team. Request a callback and we'll show you the numbers.

Frequently asked questions

Is SIM-only or a handset contract better for business?

SIM-only is usually cheaper overall because you are not financing a marked-up handset, and contracts are shorter. Handset contracts suit those who prefer to spread device costs.

Why is SIM-only often cheaper?

With SIM-only you pay only for airtime, whereas a bundled contract adds the cost of the phone, usually with a mark-up, into the monthly fee.

When does a handset contract make sense?

When you want to avoid a large upfront outlay or equip a whole team with new devices at once and prefer one predictable monthly payment.