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Christmas Gift Guide
Phones

Britain's cheapest mobile phone contract: Is it worth it?

The UK's cheapest mobile contract is only £5 a month, but you're locked in to three years of tasty Orange action. We compare your options for cheapness

The cheapest mobile phone contract in Britain right now will lock you in for more time than the minimum sentence for burglary -- but it's only a fiver a month.

Orange's 'Orange 5' plan offers 50 minutes and 50 texts a month for £4.89, and throws in a free Nokia 2330. We haven't reviewed the 2330, but Nokia can be trusted to make decent inexpensive phones, even this cheap. And you won't be stuck with the 2330 forever -- you'll get a free upgrade to a similar low-end phone after 18 months.

There's no data included, and adding 500MB of browsing a month for £4.89 will double the cost -- and it's hardly worth it on such a basic phone. Orange also tries to ding you at the drive-through when you check out. You'll pay at least £3.99 for delivery -- up to £17.99 -- and you have to manually remove the £6-a-month Orange Care insurance policy.

So if you need a basic handset for making a few calls and texts each month -- or maybe you're looking for a Christmas gift to drag your nan into the world of mobile phones -- is this a good deal?

Mobile phone contracts are as tangled as a plot-line on EastEnders, but according to our research, the answer is yes. Assuming you use 40 minutes and 40 texts a month -- you've got to have a buffer -- across the networks, the cheapest pay as you go deals are all far more expensive.

For example, on Orange pay as you go, over 36 months you'd pay £19.95 for the phone, £8 per month for 40 minutes of cross-network calls and £4 for 40 texts. You have to top up £10 to get the phone, too, which covers your bill for the first month or so. The grand total for this deal is £441.95. The Orange 5 contract costs £183.03 in total, and that includes the upgrade at 18 months.

You could buy the 2330 outright from Tesco, among other places, for a mere £39.98, and get the cheapest SIM-only deal currently available, from Talk Mobile. It includes 100 minutes and 100 texts per month, but it's £7.50, so over 36 months you're looking at a total cost of £309.98.

The upshot is that unless you make very low levels of calls and texts -- somewhere less than 20 minutes and 20 texts -- pay as you go costs more than the cheapest contract deal out there. And at such low amounts, you're probably not interested in shopping around every year for the best deal anyway, so a 36-month contract may not be a problem.