Sky Mobile Swap - is the yearly upgrade plan too good to be true?

If you're tired of having to wait two years before upgrading your mobile phone, Sky claims it has the solution. Sky Mobile Swap12 is a new deal that will let you change your phone after 12 months.

'Customers told us they want an affordable way to have the phone they want, when they want - so that's exactly what we are doing' said Stephen Van Rooyen, Sky's UK chief executive. 'This means no more paying for expensive upgrade fees or long waits to get the latest models.'

Sounds good on paper, but Which? research reveals it could end up costing over £500 more than alternatives - and there are a few hidden conditions that new customers need to be aware of.

How does Sky Swap work?

Sky's swap plan works differently to most contracts you'll get from EE, O2, Vodafone or Three:

• Choose the phone you want from a range that includes the iPhone 7 and the newly announced Samsung Galaxy S8. There is no upfront charge for the phones, only a monthly fee.
• Choose Swap12, which lets you upgrade your handset every year, or Swap24, which allows you to upgrade after two years.
• Choose your data - 1GB adds £10 a month, 3GB is £15 and 5GB is £20.
• Unlimited calls and texts cost £10 a month, but these are free if you're a Sky TV customer. Alternatively pay as you use, at 10p a minute for calls and 10p per text.

Sky is appealing to the impatient with its new Swap12 plan, and there will obviously be a premium involved in swapping your phone after just a year. But how much? And does Sky compete with similar two-year contract deals with its Swap24 plan?

How is Sky Swap different?

Most mobile phone contracts last two years, and factored into the monthly cost is the price of paying off the handset, plus a set price for minutes, messages and data. At first glance Sky's deals look similar, but the small print tells a different story. Swap24 is actually a 30 month loan agreement, 24 months of which you're tied to a 'contract' with your chosen monthly minutes and data bundle. Swap12 is a 24-month loan agreement. Throughout your contract you are able to adjust your plan using Sky Mix, so if you find you need more data you can change the amount you get each month.

You can still upgrade after 12 or 24 months, but need to pay off the remaining months of the loan agreement.Sky has a novel way of helping you do it - you can sell your phone back to them at the end of the contract, or pay off the rest of the loan agreement. But more on this later.

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Are Sky's deals cheaper than Vodafone, Three, O2 or EE?

We've looked around to see how Sky's prices stack up to other contract deals for the Samsung Galaxy S8. Your other option is to buy the handset outright and get a Sim-only contract deal. This can often be cheaper since you aren't paying off the cost of a phone. The cheapest comparable Sim-only deal we found for the S8 was with Three, at £12 per month.

• All the deals in the table have unlimited calls and texts, and 5GB of data unless indicated.
• Since at the end of a more typical 24-month contract you get to keep the phone, we have assumed that you will do so here, instead of selling it back to Sky.

As youcan see from the table, Sky Swap doesn't fare well against alternatives. Swap24 was the most expensive option by a distance. Swap12 appears to be relatively cheap, but bear in mind that this would only include 12 months of minutes, messages and data. Depending on how you go about securing a bundle for another 12 months (in order to make it comparable to a 24 month contract), it could be similarly expensive.

Looking to change network? Take a look at the mobile providers we recommend.

The hidden costs of Sky's deals

If you choose to send your phone back to Sky after 12 months with Swap12, or 24 months with Swap24, you won't have to pay the remaining loan amount - essentially Sky has calculated the value of the phone at this stage to be the same as what you still owe them.

That's assuming your phone is up to Sky's standards. Withthe all-new Samsung Galaxy S8on Swap12,Sky will pay you £276 for the phone after the first year - enough to pay off those final 12 months. But anything from a crack in the case to a software fault could leave you out of pocket.

ThisPDF from Sky's website lets you know exactly how much each fault will knock off the price.

Is a Sky mobile plan worth it?

In a word, no. Even if you're a Sky TV customer there are far better deals to be found elsewhere:

The cheapest way to get hold of the S8 is to buy it and get a Sim-only deal - expect this to cost you around £977 over two years based on the kind of bundle we're looking at here. But let's say you prefer a contract:

If you're a Sky TV customer:

• Sky's Swap24 costs £1,251 over 24 months - up to £185 more than a 24-month contract and comparable bundle with another provider.
• Sky's Swap12 costs £1,008 - £52 less, but you'll have to start paying for your own minutes and data bundle after 12 months, assuming you opt to pay off the handset rather than return it to Sky.

If you're not a Sky TV customer:

• Sky's Swap24 costs £1,491 over 24 months - £514 more than buying the phone outright and going Sim-only, and £431 more than some alternative 24-month contracts
• Sky's Swap12 costs £1,128 - £68 more than other 24-month contracts andyou'll need to pay for your own minutes and data after the first year, assuming you opt to pay off the handset rather than return it to Sky.

Figures correct as of 6 April 2017. Contract deals change frequently, we advise Which? readers to shop around before settling on the best deal.