Why the mobile 'tech fund' is no longer ideal for procuring mobile devices

A tech fund is commonly used in the UK by network providers to lock in their customers. Essentially, it’s a fund that has been built up over the duration of the mobile phone contract which includes the device and the airtime. As your contract renews, you are given a number of devices you can have for “free” to help you. Customers then tend to refrain from exploring the market as it becomes difficult for customers to compare an alternative solution. In reality, the network providers have simply already charged you for this by building this cost into the monthly contract pricing. In essence, you have overpaid in the first place.

Organisations are starting to realise that this is not a sustainable model for the modern workplace. There is far more flexibility in our personal lives that has resulted in an increase in demand for data only sims. In Europe, the tech fund model has already largely dissolved. When you combine the lack of transparency and flexibility that these models provide, with the increasing mobile phone cost and increasing mobile data usage requirement. It’s clear to see why the tech fund model is no longer sustainable.

Here we highlight three reasons why tech funds are no longer the best approach for procuring mobile devices.

A tech fund isn’t providing you with “free” money. You’ve signed up to a contract originally that means you help the network provider accrue this fund via your airtime bill. Ask yourself if you were given “free” money or “free devices” at the very outset of the contract? Can you compare the device cost versus the airtime cost? What happens if you don’t include the “tech fund” benefit in your comparison?

This fund can only be used to buy devices from your current network provider, whose device price might be more than what you'd pay if you procured the device externally. Also, you must use the fund before the renewal of your contract, or you risk losing it (compelling you to acquire whatever is in the network providers catalogue – which may not be the latest, greatest or even required by you). By using a tech fund, you are immediately tying yourself into using one network provider for a fixed term whilst bundling the cost of the hardware together with the cost of the airtime. There’s no clarity on how much the handset versus airtime costs and no easy way for you to compare.