Policy on the supply of School-funded iPhones

The release of the fourth generation of Apple's iPhone has triggered a number of requests for these devices and numerous questions have been raised regarding their supply and use, especially around the mobile contract tariffs available.

Before answering iPhone 4 specific questions, your attention is drawn to the School's general policy on the use of mobile telephony equipment|.

Additionally, you can find answers to some other mobile phone frequently asked questions|.

For ease of reading, information on the supply and use of the iPhone is presented in Q&A format as follows:

1. Can I have an Apple iPhone?
Apple iPhones are available through the School's mobile telephone provider (Telefónica-O2) but it is important that you discuss your requirements with the IT Service Desk|as to get the maximum benefit from the device, it will need to be synchronised with your PC. It may be that another device is better suited to your needs.

As the purchase price of the device is significantly higher than other mobile handsets, your department/service/division will need to be convinced that this additional cost is justified. IT Services will show the minimum total cost of ownership commitment on the Mobile Equipment Declaration and the budget holder will need to authorise this before an order can be placed.

2. What contract is available through the School's provider?The School has negotiated a contract with Telefónica-O2 that provides very low monthly rental (£2.00 per month) and low call rates for most mobile devices. Calls to UK landlines and other Telefónica-O2 mobiles are typically 3.5p per minute (although calls to other LSE mobiles can be made more cheaply).

For the iPhone the monthly charge is £16.00 excluding VAT (£18.80 including VAT), and this includes unlimited mobile data (3G/Edge) and WiFi (provided by BTOpenZone and the Cloud) in the UK. Voice calls and text messages are charged in addition at the LSE contracted rates for all mobile phones.

3.  Is this more expensive than I can obtain as a consumer?
Well, that depends. The School awarded a contract to Telefónica-O2 on the basis of providing best overall value for mobile telephony at the time of award. The contract lasts for 2 years (until May 2011) when it will be retendered. Although most consumer tariffs offer hundreds of inclusive airtime minutes, the monthly rental is much higher and most School mobile users do not make that level of calls. LSE contracted data tariffs are comparable to those offered to the consumer.

Let's consider the total cost of ownership of an iPhone 4 16GB purchased on the School contract against those available to the consumer from Telefónica-O2

 O2 iPhone4 Tarrifs LSE Contract   Consumer Pay monthly

 Hardware

   

 16GB black iPhone 4

£411.25

£199.00

     

 Contract

   

 Monthly rental

£18.80

£35.00 

 Data volume

unlimited

500MB 

 Voice minutes

per minute charges

600 

 Text messages

per text charges

unlimited

 WiFi data volume

unlimited 

unlimited

 Duration of contract (months)

24

24 

 

   

 2 yr Total Cost of Ownership

 £862.45

£1,039.00 
















 

You will see that over two years the LSE contract is £862.45 plus call and text message charges with unlimited data usage, whereas the consumer pay monthly contract is £1039 inclusive of 600 voice minutes and unlimited texts, but with a 500MB monthly data volume limit. For data usage the consumer pay monthly would incur additional charges for data usage in excess of 500MB per month. The LSE contract would incur additional charges for voice calls/text messages but you would need to make in excess of 200 minutes of calls each and every month before the consumer tariff became better value. However, there are other considerations than cost alone and these are set out in the answer to Question 5 below.

4.  Can the device be purchased without a contract?
Technically, yes, an iPhone can be purchased from Apple without an associated mobile voice/data contract (i.e. "SIM free"). The purchase price is much higher, however.

A 16GB iPhone4 costs £499 including VAT and a 32GB iPhone4 costs £599 including VAT.

To comply with the School's Financial Regulations, the device will need to be ordered through IT Services as per any other piece of IT equipment. Please contact the IT Service Desk|.

5. Can I use my own personal mobile contract with a School-funded iPhone?
No. First this is because nearly all consumer tariffs prohibit business use. Second, there are tax implications: if the device is used for business use then the School will provide and pay for the cost of the device and its use and this is considered business use only from a tax perspective. If the School pays for the device but it is used personally (which a personal contract would imply) then it must be treated as a benefit in kind and the user would be subject to additional income tax. The School does not have the resources required to tax individuals on this basis. Third, the School will not be able to reimburse you for the cost of your contract.

6.  Can I buy an iPhone on a Pay as You Go (PAYG) basis?
Technically, this is possible although at the time of writing Telefónica-O2 have not yet released pricing information for iPhone 4. However, if the device is purchased by the School then the School must pick up any associated PAYG costs, otherwise you may fall foul of the tax considerations explained above. Buying PAYG top-ups may also pose a problem for your department, as a credit card purchase is often required. The School strongly recommends that you do not buy your iPhone on a PAYG basis.

7.  But it has been possible to claim back mobile phone device/PAYG costs in the past?
When the iPhone was launched a few years ago it was not available initially through the School's contract withTelefónica-O2. Temporary arrangements were made for individuals to purchase the device and to claim back the cost incurred. The School's Finance Division has since clarified the position, particularly in respect of the tax implications (see the answer to Question 5 above). This policy statement supersedes any previous arrangements.

8.  Can I use my existing SIM card?
No. In common with Apple's iPad and a number of other new mobile devices, the iPhone 4 uses the new "microSIM" card format, which is incompatible with the older standard size SIM. This means you will need a new SIM card for use in your iPhone 4. If the device is ordered on contract through IT Services, then a new SIM card will be supplied with your iPhone4.#

9.  Can I use my iPhone for personal use?
Mobile equipment issued by the School should only be used for work-related communications.  Occasional and low-cost personal use will be tolerated when related to work activity (for example, when working away from the office or outside of normal working hours to confirm safe arrival or notify a delay etc.)

10. Can I use my iPhone abroad?
Yes but the use of mobile devices on networks other than Telefónica-O2's UK network may incur substantial additional cost and should be avoided wherever possible. For example, calls made from the USA back to the UK are charged at 90p per minute. Calls made from China are charged at £1.79 per minute. Please note that calls from the UK to a LSE mobile "roaming" in another country also incur cost for the mobile user (ranging from 12p per minute to 77p per minute depending on where in the world the phone is located). 

LSE mobile devices will (whenever possible) be supplied with international and data roaming capability disabled. Members of staff requiring these services will need to provide evidence of need and appropriate authority from their parent department/division for this service to be activated.

The use of iPhones with data roaming capability should be used abroad with extreme caution as it is possible to incur substantial cost for international data roaming. Such use should only be considered when it is absolutely necessary. It may be possible to find alternative ways of obtaining access to your email, e.g. by using a local wireless (WiFi) network rather than the mobile telephone network.

Data roaming "Bolt on" tariffs are available for occasional or more regular data roaming. Please contact the IT Services-Telecoms team for more information.

11.  Can I have an Apple iPad instead?
Apple iPads are not available as a mobile device through the School's contract with Telefónica-O2. However, the device can be purchased from Apple direct, using the School's normal IT equipment procurement procedures. In all cases, you should discuss your requirements with the IT Service Desk|. A business justification may be required.

The iPad comes in two model types: one that has built in Wi-Fi only (and will not work on a mobile telephone network) and one that includes mobile/3G capability. To activate the latter, you will need a new "microSIM" card from a mobile telephone service operator. The School's contract with Telefónica-O2 does not yet include a tariff for the iPad, so this cannot be purchased on behalf of the School at this time. However, each of the major UK mobile telephone operators have released data plans for iPad users. These vary according to data usage and frequency of use. For example, there are daily plans and monthly plans with data allowances. Telefónica-O2's data plans for the iPad can be found on the O2 website|.

You will need to discuss arrangements for payment for these tariffs with your budget holder before ordering your 3G-enabled iPad, as most mobile telephone operators will require a personal credit card to authorize the account. The School may not be able to reimburse any expenses incurred, so for this reason the purchase of mobile/3G-enabled iPads is not recommended.

12.  How can I purchase applications?
You may download and use as many free apps as you wish using the built in AppStore application. However, paid for apps require an account to be registered with iTunes and for this account to be associated with a credit card. If you synchronise your iPhone with your personal iTunes account and use your own credit card to purchase applications then those applications are licensed to you personally. The School cannot reimburse you for the cost of these as ownership cannot be transferred (the application remains linked to your iTunes account). If you use a School-owned credit card to fund application purchases then the applications must be for business use only and must be made through a School-registered iTunes account. The School retains ownership of/a right to use such applications and they must be surrendered on leaving the School. You should not use a School-registered iTunes account for personal purchases as you will lose these when you leave the School.

13.  I have a question that has not been answered here?
Please contact the IT Service Desk| or the ITS Services-Telecoms team|.

IT Services

20 July 2010

 

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