BT has re-entered the mobile market this week with a range of Sim-only mobile deals, but the tariffs are only available on a 12 month contract and only its 7.6 million broadband customers will benefit from the cheapest prices.

From today, the telecoms giant is offering three 12-month, 4G bundles, starting at £5 per month, with bonuses such as wifi hotspots.

However while non-BT broadband customers can get the Sims, to bag the cheapest prices you, or someone in your household, needs to be an existing BT broadband customer.

The launch of BT's Sim-only deals also puts it in the ring to go head-to-head with other 'quad-play' providers such as Virgin Media. See our Cheap Broadband, Cheap Home Phones, Cheap Mobiles and Cheap Digital TV guides to get the best deals.

The move is a forerunner to BT's £12.5 billion buy-out of EE, which if approved by the Competition and Markets Authority, is likely to see BT offer additional contracts and deals, with handsets, through the EE brand (see the BT to buy EE, but no change for customers yet MSE News story).

Nick Durrant, MoneySavingExpert.com's consumer analyst, says: "For existing BT customers these Sim-only plans are very competitive, beating other 4G tariffs currently on the market. However BT's broadband is rarely the best value and can often be beaten by deals from other providers.

"So any savings gained through the mobile tariffs can be quickly wiped out by the more costly broadband. If households are thinking of switching to BT broadband purely for the Sim deals, ensure you do the sums first to calculate whether you'll save overall."

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BT returns to the mobile market – but are its Sim-only deals any good?

How much do the Sim-only deals cost?

With BT broadband the Sims cost:

  • £5/month for 200 mins, unlimited texts, 500MB.
  • £12/month for 500 mins, unlimited texts, 2GB.
  • £20/month for unlimited mins, unlimited texts, 20GB.

Without BT broadband the Sims cost:

  • £10/month for 200 mins, unlimited texts, 500MB.
  • £17/month for 500 mins, unlimited texts, 2GB.
  • £25/month for unlimited mins, unlimited texts, 20GB.
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Are there any catches?

Even if you sign up for a Sim deal as a BT broadband customer, if you later switch away from BT's broadband within the 12 month mobile contract, the price of the Sim will jump up too.

If however you decide the Sim deal you picked isn't right for you, you can switch to one of BT's two other tariffs without taking out a new contract or incurring any penalties or restarting the 12 month contract.

You can however only downgrade to a cheaper tariff once, although there is no limit on swapping to costlier tariffs.

So are the Sim deals any good?

The 'with BT broadband' prices are competitive compared to similar deals on the market. For example Giffgaff's £12/month 4G goodybag also comes with 500 mins and unlimited texts, but only 1GB of data as opposed to BT's 2GB.

Equally if it's data you're after, the best £20/month would get you anywhere elsewhere on the 4G Sim-only market with a similar number of minutes and texts is 4GB with Tesco Mobile, as opposed to 20GB with BT.

However to get these top deals you'll need to take out BT broadband. It's cheapest broadband deal, including pay per month line rental (you can cut costs by paying a year's line rental upfront), currently costs £21.99/month over a 12 month contract. But this deal is capped at a low 10GB – something which other providers don't tend to do.

If you take unlimited broadband deals instead, for new customers BT currently costs £26.99/month including standard line rental over 12 months in its sale (it normally costs £29.99/month).

Together with the mid-range Sim, this costs £38.99/month (£41.99/month on the standard broadband price).

In comparison, the cheapest broadband on the market currently costs £18.25/month over 12 months including line rental from EE (again it's cheaper if you pay line rental upfront).

Add this to the best Sim deal on the market with equivalent data to BT's mid-range Sim, which is either with Giffgaff or Tesco Mobile (the former gives more data, the latter more minutes than BT), and you'll pay a cheaper £33.25/month.

BT offers 'quad play' services

The move to offer Sim deals also sees BT join Virgin, EE and TalkTalk in offering what are known as 'quad play' deals – where you can get TV, mobile, broadband and home phone services from the same provider.

Quad play deals are almost impossible to compare as each separate component tends to vary by company, for example they often have different fibre speeds, TV services and contract lengths.

See our Cheap Broadband, Cheap Home Phones, Cheap Mobiles and Cheap Digital TV guides to get the best deals.

Additional reporting by Nick Durrant.