Mobiles: the freebies hook you in but don't be deaf to value

The incentives can be great but do all the sums before signing up for a new contract, says Emma Lunn

Here's a wake-up call: if you are a sport, movies or music fan, you can get special deals from your mobile phone provider or retailer. Networks including O2, Orange and Vodafone offer their customers perks and priority treatment at certain events. Other mobile users can get freebies such as games consoles, MP3 players and satellite navigation systems.

But here's another wake-up call: these incentives may not be enough reason to sign up to a particular deal.

Rob Barnes at price-comparison website Moneysupermarket.com argues: "Free gifts are designed to entice the customer into signing for a higher-value contract than perhaps they would normally choose. And they are usually only available on 18-month contracts, tying you in for longer than you may wish."

Do the sums and check the retail price of the gift before signing up. For example, retailer Dial-a-Phone offers a free 4GB iPod Nano on the O2 200 tariff. Customers get 200 minutes and 200 texts for £30 a month, or £360 a year. But 3's £20 Talker tariff gives you 500 minutes and 100 texts per month. That's an annual cost of £240 and you can buy a Nano in Tesco for £98.97, a saving of £21.03 on the Dial-a-Phone offer.

Likewise, experts advise caution on "cashback" offers. These deals, which require customers to send in bills in return for a number of months' free line rental, seem to suffer due to the unreliability of certain retailers. "Some have turned out to be empty promises as the retailers have shut down, leaving customers hanging on for money that will never come," says Steve Weller at the uSwitch website.

Be careful as well of the small print on the special deals. For example, Orange recently offered free flight tickets to new customers, in a move that was greeted as one of the most generous incentives yet provided by a phone company. However, there were big caveats. The offer was available only to the first 20,000 people who signed up, and customers had to be flexible over the times and dates of travel, as well as paying flight taxes and surcharges.

Special offers on the line

O2 Discounts and priority booking on tickets for events at the O2 arena in the London Docklands, as well as rugby giveaways.

Orange Two-for-the-price-of-one cinema tickets on Wednesdays, and free broadband on some 18- and 24-month contracts.

3 Five free music downloads and £30 in credit for recommending a friend to the network.

Vodafone Competition to win free tickets for the Vodafone Live Music Awards, to be held in London this week.

Virgin £100 credit given to consumers when they take out an 18-month contract, costing £25 a month.