I think that's the issue - the monthly tarriff price plans are designed to absorb the impact of the cost of the phones.

I went for a 24 month piephone (3GS) contract with O2. At the moment, I'm paying something like £35/mth and £13/mth on insurance, which I don't think I'll bother now that I'm not working in hospital for a little while.

That's £1100 I'm paying, along with the £200 phone cost and I think the piephone was worth £400 or so.

My call usage and text costs are always low but it's internet access/3GS that I'm paying for.

Will definitely have a look at contract renewal time. I may wait for piephone 5.

I think that initally I will have to accept a contract. After that as a low user I can get away with a PAYG as long as I can still get data and Cloud coverage. Wifi access via the cloud will be more useful than a big data bundle via 3G for me. I would like tethering but on a per day basis as I am unlikely to use it that often.

I sure there are cheap SIM only deals out there if you need data included.

I do not mind having a per contract for such needs which might open up the options still further.

Once your initial contract is over you can switch to the iphone simplicity tariff that costs £15 a month.

You can also move your insurance to someone like protect your bubble and pay £8 a month for the same insurance.