Talk is far from cheap

The large print in the newspaper advertisements boasts that a Nokia 121 mobile phone costs only pounds 14.99. If you are on the brink of joining the walking, talking masses, this might tempt you to reach for your landline with one hand and your credit card with the other. But a formidable array of additional charges can make mobile phones expensive toys.

The total cost includes the purchase price, the call charges, and potentially very expensive insurance against having your mobile stolen and used by the thief. Then there is the rental rate and the contract length to consider. Whichever way you slice it, the total cost for just 60 minutes a month of calls can range from pounds 450 to about pounds 900 year. That's 62.5p to pounds 1.25 a minute.

To get the Nokia phone for pounds 14.99 (plus VAT) you have to sign a contract for 12 months, at the end of which you must give a further three months' notice for termination, totalling 15 monthly payments.

You can opt out, but only if you have paid for the privilege at the outset. The Carphone Warehouse offers a scheme where, if you pay pounds 15 when you buy a phone, you can hand it back at any stage of your line rental agreement. You get back up to half of the price paid for the phone and are relieved of any further payments.

The cost of calls varies with the amount paid for line rental. There are rental tariffs for low, average and frequent users available on each of the networks: Cellnet (national), Vodafone (national), Orange (getting there) and Mercury (restricted). The general rule is the higher the line rental or the cost of the phone the lower the call charges.

For example, Orange's Talk 200 gives you three hours and 20 minutes of free calls a month throughout the day and 8p a minute if you overrun. But the monthly line rental is pounds 58.75. On the other hand, the emergency tariff provided by Peoples Phone on either Cellnet or Vodafone costs only pounds 11.74 to rent, but calls are charged at 77p a minute at all times.

Compare these with BT's new local day-time rates of 4p per minute and 1p at weekends. BT calls are also now charged to the second not the unit, something which only one network, Orange, does.

So which tariff should you go for? A guideline is that if you are making up to 15 minutes of calls a week you should subscribe to a low-user tariff that costs around pounds 15-18 a month and pay the higher call charges.

But do not under-estimate the temptation of a mobile phone when it is sitting in your pocket or bag. If you end up chatting on the potentially cheaper option, the Peoples Phone's Emergency Tariff, you might be taking out a second mortgage.

Inappropriately named free calls are offered on some tariffs. Apparently this appeals particularly to families with teenage children who can then sit on the phone all evening without bankrupting their parents. The most renowned of these is Mercury's Personal Call tariff which offers free local calls from 7pm to 7am.

However, if you buy a Mercury One2One phone for pounds 150 the true cost of this privilege for the first year will add up to pounds 397 after line rental.

If you are wondering how Mercury dares to charge for its cheapest phone no less than 10 times prices advertised for competitors' models, one reason is that the pounds 14.99 Nokia 121 phone advertised is a basic analogue phone. The Mercury phone is a digital phone that gives clearer reception, cheaper calls and your call cannot be listened into. Had digital phones been available to the Princess of Wales to call James Hewitt we might never have heard of the "Squidgy tapes"

Mercury and Orange are both digital networks and their phones are as expensive as their calls are cheap. Dealers sell analogue phones costing pounds 200 for as little as pounds 9.99 but only with a minimum12 months' line rental contract for at least pounds 175. The service provider then reimburses the dealer for the "loss" made on the phone and pays the dealer a commission for the contract.

The catch comes if your discounted phone is damaged or stolen. The pounds 14.99 phone advertised costs pounds 200 to replace. Your alternative is to stop using your mobile line. However, you will still be liable to the end of your contract.

Insurance for Cellnet and Vodafone- connected phones is the most expensive and starts from around pounds 60 a year for replacement only of an analogue phone and doubles to pounds 250 to cover unauthorised calls.

Mercury insurance is about 30 per cent cheaper and Orange is offering free insurance until the end of October

Free itemised billing and message-leaving services are provided by both Orange and Mercury but Vodafone and Cellnet charge for these services. These are optional extras you may choose to do without. However, everyone who has ever owned a telephone, mobile or otherwise, is familiar with the sinking feeling of staring at a staggering bill, knowing that complaints will be met by, "No, I'm sorry, no mistake has been made, these are your call charges this quarter."

For many, mobile telephones become a way of life. For others they turn out to be a complete waste of money. You can end up with awkward looking beast with batteries that weigh a ton. And the only time you ever use it is when you are stuck on British Rail.

Mobile phones can be expensive toys. If you regard them as a necessity, take a calculator and a magnifying glass for the small print when you go to buy a phone and use both.

How it adds up: the real cost of a mobile phone

Phone 60 minute calls Total including

connection & each month insurance &

1 year rental for 1 year* itemised bills**

pounds pounds pounds

Orange Talk 15 346.31 119.76 486.07

Cellphones Direct 195.05 241.20 527.24

Cellnet/Vodaphone low-user 215.34 234.00 534.49

Mercury Personal Call 396.64 105.72 546.36

GSM low-user 340.93 211.56 649.64

Peoples Phone Emergency 174.37 554.40 812.65

British Telecom*** 0.00 21.15 21.15

* 30 min peak, 30 min off-peak, discounted for free calls

** Basic insurance, it does not cover the cost of authorised calls

*** Assuming already connected