The phone 

Different phones offer different functions - and, by and large, the more it can do the more it will cost.

Functions might include:

• Phone (obviously!)
• Text messaging (still a very popular function and offered by pretty much all phones)
• Camera (those with a greater number of megapixels should take higher quality photos)
• Video camera
• Email (some phones specialise in giving easy access to your email)
• Web browsing (many phones now offer web browsing, but the speed and usability can vary)
• Applications (Apple's i-Phone introduced the idea of applications, or apps, that you can download to add extra functionality. Other companies have followed this approach)
• Music (some phones specialise in playing MP3 tracks and many have tie-ins with online music providers)

Additional features can include Bluetooth, Wi-Fi or 3G connectivity, Java games and voice dialling.

Other things you might want to consider when choosing your phone are:

• Touch sensitive screen or a keypad?
• Battery life
• Size and weight
• Durability

Pay-as-you-go

Every mobile phone has to be connected to a network service provider, and the simplest way to do this is to pay-as-you-go. That means you buy the phone and then pay for what you use it for (calls, texts, web browsing etc) according to a set tariff.

Pay-as -you-go is also known as pre-pay, since you normally have to buy credits for your phone usage in advance.

As the media regulator Ofcom points out, the key benefits of pay-as-you-go are:

• You have more control over the amount you spend on making calls
• You can end the service any time you want

However:

• The costs of each call is often higher than on a contract

• There's likely to be a quite limited choice of handsets - and you'll have to buy one
• Services such as downloading may be more expensive.

Line-rental contracts

Many phones are offered at a reduced cost (or even free) if you also take up a line-rental contract.

Calculating which contract offers the best value is complicated, and requires you to weigh up how many calls and texts are offered for free, which phone you can get and a whole range of other services, costs and incentives.

There are numerous price comparison websites that can help (although they might not show you all the options) and Moneysavingexpert.com has some useful advice. It can be helpful to spend some time noting down your current phone usage patterns so you can see what you'll need from your new service. Key questions to consider include:

• How many minutes of calls do you make over a given period?
• How many texts do you send?
• How much do you browse the web on your phone? (Or how much would you like to if you could?)
• How often do you send video or photo messages?
• How often do you need to call to or from overseas?

All of these things, and many more, can be covered in a contract.

Before you enter a mobile phone contract

Before you sign up, the mobile phone company must give you certain information. They can either tell you this verbally, or give you the information in writing.

The information they must give you includes:

• Details of important charges, such as minimum contract charges and any charges for finishing the contract early
• The conditions of payment
• When the service starts
• Any rights you have to end the contract
• If the contract must remain in place for a minimum period.

Problems with contracts

A contract for a mobile phone gives you the same rights as a contract for any other consumer goods or services. It is important to establish who the contract is with in case you:

• Want to end your contract for a mobile phone
• Have a fault on your mobile phone
• Want to make a complaint about mis-selling, 'slamming' or special offers for mobile phone contracts
• Want to make a complaint about tariffs, billing and coverage

Your contract might be with:

• The network operator which is the company that allows call access time so that you can make and receive calls
• The service provider who acts as a link between the shop, outlet or members of the public, and the network operator
• The outlet which sells mobile phones.

If you have a problem with a contract or any other aspect of a mobile phone purchase, it's usually best to start by following the relevant company's complaints procedure. If that is unsatisfactory, there are a range of organisations that can help.

Updated: 09/01/2013

Written by Tom Green