What Ever Happened to Phones Being Cheaper on a Plan?

Maybe I'm getting old or something, but didn't it used to be the case that a phone on a 24 months contract ended up being cheaper than buying outright? Or am I making this up?

Comments

  • +5 votes

    Phone on plans only end up cheaper if there is a BIG promotion. Your memory is playing games on you

    • +20 votes

      The last handset i purchased witth a plan was an i pad deal for 25 bucks per month for 2 years and worked out cheaper through optus then outright. I thinkfrom memory it was from here.

      •  

        Yes the ipad and ipad air I got it from here too. But phone promotions have been gone for longer. The last Ive seen a good one was optus google pixels phones and the 25% off plans

        •  

          That's right. It was an ipad air. Great tablet if you ask me and 128gb with LTE perfect.

      • +1 vote

        I got an iPad Pro 12.9 3rd gen 64GB cellular for $25 a month over 24 months with a 200GB Optus 4g plan (+$60 for the plan.)

        $600 for a $1700 device ain't too bad. Probably why Optus don't offer it anymore.

        • +1 vote

          Wowzer

          • +1 vote

            @Kiro: Yup, this was back in April 2019. I would never have paid $1749 for a tablet, iPad or not, so I'll be using this one till it dies.

    •  

      The only plan I ever had was back in 2010, when I heard faint whispers online and was somehow able to land myself a deal where the first 9 months of a 2 year plan were free. Got a original Galaxy S on a $50/month plan for a total of $750

      But even back then I thought plans were a crap deal and still felt silly signing up for one, even with that crazy discount

    • +12 votes

      Or maybe you're too young, the last couple of phones I had on plans ended up costing less than buying the phone outright. This was back in early 2010s.
      - Got a Samsung Bada phone for $18/month for 24 months on Virgin.
      - Got a HTC One X for $20/month for 24 months on Crazy John's.
      - Got a LG G2 on an Optus plan for something around $30/month but ended up cancelling the plan due to horrible reception and was allowed to keep the phone for a small fee (much lower than phone cost at the time).
      These were all plans with "no phone repayment" essentially the phone was thrown in for free, BUT phones costed less back then. As well as plans being horrible. Virgin one had about 100 SMS and 10 minutes worth of call, maybe 50/100mb of data. Crazy John had 500 text with 100 min call, but 1.5gb data. Optus one I cannot remember or couldn't care less as the reception was so bad couldn't even use the bloody thing.
      Now with $150/year I get average 7gb data per month, unlimited call and text locally and some international locations, plus text and minutes to some other countries at limits that I would never get close to. I'd rather have this freedom and buy a phone when I find a good deal than be locked into a provider for 24/36 months.
      What I cannot comprehend is people who sign up to lengthy plans now and repay their phone by installment at RRP… Makes no sense unless you're cash right which would even be more reason to not buy a $2000 phone.

      •  

        I remember I wanted a pre-paid phone in ~2010 but everything around the $200 mark was a little trash. I found a Nokia 6131 that I quite liked on a Virgin plan for $20-30 a month with no contract break costs after 6 months. The phone value in the contract was $180 when buying the phone outright was $400-450, and that was partially paid off each month. So I kept it for exactly 6 months, paid out the phone and switched to pre-paid and ended up with a phone worth twice as much.

      •  

        Many people expense their mobile plan for work, so they can get a nice phone with higher tier plan and get their employers to pay for the bill.

    • +4 votes

      I don't think so. Back in the day a plan with a reasonable phone definitely worked out better than buying the phone outright and then going on a comparable SIM-only plan. A while back (maybe 10 years now) this changed and suddenly they were slugging customers a huge amount for the handset as part of the plan, and it became worse value.

      Basically it switched from the phone being a bit cheaper as a reward for signing up for a long term contract to a contract being a way to get a phone you couldn't afford outright but with a slight penalty on the total cost.

    • +3 votes

      No OP is right. There absolutely was a time in Australia where smartphones were cheaper to get via a plan than outright. When 3 Mobile and Orange were leaving the Australian market and prepaid operators like Boost were very small the big companies like Optus, Telstra, Vodafone and to a lesser extent Virgin mobile all subsidised handsets to the point they were significantly cheaper to get on a plan 24 month plan compared to outright.

  • +32 votes

    The networks stopped subsidising handsets years ago. Previously, they were willing to fork out cash (by subsidising handsets) to gain subscriber numbers.

    • +28 votes

      and the call prices were artificially inflated. remember $1.20 per 90 seconds plus flagfall?

      • +5 votes

        Oh yeh! I forgot about those damn jacked up rates! I used to use my work desk phone to call my mates to try save money!

        Those 25c SMS too! Now they can barely give them away for free!

        • +1 vote

          SMS was always a rort because it was literally sent in the network overhead packets AFAIK. So it didn't cost the providers anything - the packets were already being sent whether you sent an SMS or not.

      • +2 votes

        $20 credit didn't get you far. A 10 minute call and a few SMS and it was gone.
        That said I do miss that phone that never dies…the ever reliable Nokia 3310.

        • +6 votes

          That's why everybody was on Optus so they could call between 8-midnight for free in 20 minute intervals…

          •  

            @Munki: remember 1999 / 2000 when you could only SMS the same carrier…. not possible to SMS Telstra if you were on Vodafone etc - classic

          • +2 votes

            @Munki: Haha yeah you would call someone, hang up, then they would call you back and you'd just play phone tag.

      • +3 votes

        They also locked your handsets too and filled it to the brim with carrier bloatware that you couldn't uninstall. (They still lock prepaid phones today, but you're more likely going to encounter one when buying lower end devices. Flagships tend not to be locked)

        Not great in the dark old days when Android phones had limited storage capacity, had a quad core at most and the bloatware took up precious CPU cycles and RAM even when you didn't want to use them.

    • +1 vote

      I still have a Telstra sim card with $1 per minute call rates however I use it as my main incoming call sim in a dual sim phone as it does not expire for another 3or4 years it had built up an 11yr expiry at one stage, this saves me porting numbers when sim surfing.There is enough credit on it that I can make a couple of emergency calls on it if my other sim is out of range.

  • +9 votes

    I worked in phone sales around 2013-2016 and when calculated it was nearly always cheaper to buy outright unless there was a considerable sale that brought it closer, like 2 months free etc.

    • +2 votes

      Back in the pre-smartphone and early smartphone days retailers were doing it themselves. Particular Crazy John's, at one point they were responsible for signing up like 20% of Telstra customers, they'd sell the phone for a dollar and they took a trailing commission on the plan. Telstra and Optus weren't doing anything except handing over a commission like they did to anyone else signing up. If you signed up directly with a telco they just got a massive margin (they still do, businesses aren't going around collecting JB Hifi gift cards, they sign up to whatever plan Telstra will sell them).

      That business model was all the rage until MVNO's really came into play and people realised once their plan was done, they could save a fortune by switching to a new plan on an MVNO.

    • +5 votes

      Teenagers don't use Twitter

  •  

    Prepaid seems to be the cheapest plans, nowadays.

    •  

      I go for the long expiry ones now. Most months I don't use much data, but sometimes I need a lot. There's no point paying for a lot every months, so I just buy the 6 or 12 month plans now and it averages out.

  •  

    Optus haven't been subsiding recent, back in Sept 2019 I got the p30 on a 59 plan, including the plan. hoping they release a similar plan soon or Telstra here i come. they have the 13 months 99 dollar, 900 credit which is best u can get these days

    •  

      $900 credit? Plans are all unlimited nowadays

      •  

        900 credit on a phone, at jb hifi

        •  

          Oh ok that makes more sense!

  • +2 votes

    There are plans now from JB and Good Guys that come with $500 gift cards. You can use that to buy the phone.
    It is the same as past discounts, just an extra step.

    • +21 votes

      They should get a cheaper phone then?

  •  

    Last one for me was 2012? Sony Experia z3 $50 per month , unlimited calls, text and 20gb for 2 years. VIRGIN.

    • +2 votes

      2012? Wow you went to the future and bought the Z3 when I just got my Xperia S on launch.

    • +20 votes

      VIRGIN.

      Weird flex but ok.

  •  

    I guess phone companies, discovered that ozbargainers where getting too much from them.

  •  

    Punters decided they didn't want to be "locked into" plans from whoever.

    Surprise, surprise, the cross-subsidisation stopped immediately. "Greater choice" for the consumer (i.e. something of value) comes at, you guessed it, "greater cost" to the consumer.

  •  

    You look at countries still stuck on the old carrier subsidisation models like Japan and then you just think damn they are all getting ripped off.

  •  

    outright purchase + $15/90days kogan sim is the way to go

    • +1 vote

      Or $150 for a year for boost and be on the Telstra network

  • +7 votes

    I think once plans went to 3 years, to me they became unviable.

    Best deal I can recall getting was when the iphone 8 came out. Got one for my wife on a 2 year plan with Optus for $59 per month. This included all calls, I think 15GB or 20GB of data a month and free optus sport membership (which was $15 per month on its own at the time). That deal was only around for a week or so as I recall and of course I found it on here.

    I'm perfectly happy with android phones in the $400 range for my own use. If you must have Apple they do now have some cheaper options (XR, SE), but also you can get them on 2 years interest free from Apple. Did this for my wife's iphone 11 and paid it off in about 6 months. 4 of us on the Aldi family plan for $80 a month with outright bought phones works for me.

  • +3 votes

    The best deal I got was my Nokia 5110. Picked it up free on a two year plan. $25 per month with $30 of calls and SMS! Even got free phone calls (less than 10 min) after 7pm so was able to use my dialup provider for WAP access!

    •  

      got 3 x $25/ month 2 year telstra plans with $150 calls & free calls between all on same account came with 3 Sony w508a flip phones included in 2011

    • +1 vote

      I’m talking WAP WAP WAP WAP

  • +2 votes

    I used to be happy on Virgin handset plans and felt like I was getting the best value I could find with a good network (Optus). Then Optus scrapped Virgin and revamped their purchasing to plans plus handsets which by comparison felt terrible. Plus they offer 3 years instead of the previous 2 years. I got my 2019 iPad for less than the retail price over 2 years including data which I could share with my phone. Now? Nothing takes my eye so I’m doing my own purchase plan by skimming my income each week into a tech upgrade savings account. To hell with the telcos for “subsidised” handsets. Cheapest plan from ANYONE will do me now as long as it fits my personal needs and the maths says I will be better off. I ditched my Optus plans 8 weeks before the expiry date and saved a few bucks as the last handset/iPad payment appeared on my next bill with no penalty.

  •  

    I have simply purchased un-locked phones and connected by sim. I'm not going to pay $40-$50 extra per month on top of standard plan.
    This way, I am NOT locked in to any contract, and this scares the courier. They tend to offer a far better service than if committed to their service.
    I receive 100gigs for $49 per month

  •  

    I think thay was when the plans were much greater than the price of the average phone.
    Now phones are far more expensive and harder to subsidise with a plan.

    Except for the jbhifi deals with telstra
    They seem alright as long as you were going to use 80gb a month

  • +1 vote

    I think buy a phone outright plus a pre-plan mobile plan is usually a better deal nowadays.
    In addition, if the company allows, employee can do salary sacrifice for the mobile phone which would further reduce the phone cost by around 30%.

  •  

    I still remember the original iPhone 3G launch, July 2008. Optus were crazy cheap compared to Telstra and Voda. Handset repayments just $2/mo for the 8GB and $7/mo for 16GB handset over 24 months on a $59 plan, vs $849 prepaid. (which was not any cheaper on call/data costs)

    • +4 votes

      In any event, subsequently:
      - data use increased dramatically
      - cheap Androids and hand-me-down iPhones became normal, which lead to:
      - Prepaid getting cheaper and significantly more competitive with an explosion of MVNOs, and
      - BYO plans rather than the hassle of prepay became standard
      - High-end flagships became super expensive, to the point where they surpassed the cost of the actual plan and couldn't be subsidised without huge discrepancies between the cost of prepaid/BYO and phone-with-contract plans
      - Subsequently, leases and 3y contract terms became a thing

  •  

    For me it's mid ranged phones discounted to sub-$400 bought outright plus a $200/yr prepaid plan (currently on Kogan with unlimited calls/text plus 13Gb/mth data which I hardly use half of but it's a good back up if home NBN is down). Normally a phone lasts me 3yrs so that's $1000 for the 3yrs. I can't imagine paying $50/mth or $1800 for 3yrs to get a phone + plan bundle when prepaid and buying a phone outright saves me $800.

  • +2 votes

    Whenever I walk past a Telstra shop I feel badly for the poor people inside getting scammed.

    You do see some decent deals through JB, HN, GG etc. The 12 month ones especially, with bonuses like $500 gift cards.

    I haven't had a phone on plan since 2010 when Vodafone forgot to put the $30 handset payment on the HTC Legend 12 month plan:
    https://www.ozbargain.com.au/node/36261

  • +1 vote

    The good plans are the ones that have credit towards a phone and only last 12 months.

    Personally, I still buy iPhones outright and join a cheap plan.

  • +2 votes

    There are still good plans around. I refresh my Telstra plan every year, when there's a good bonus of some sort (phone included). I then sell the phone and the plan ends up being around $15/month for Telstra coverage, unlimited use, and too much data.

    For example, after leaving Telstra for Kogan, I rejoined Telstra on a $69/month plan with Samsung s21 + preorder buds. Sold both for a $1000+, and there was a $10/m port in credit. I paid an equivalent of around $15/month. I then claim part of my phone bill on tax (based of $69/month) and it's literally free after tax return.
    I still use a OnePlus from 3 years ago, and I'll buy something outright when it breaks.

  •  

    The other worrying thing I've seen more of is 3 year contracts or 3 year handset repayment options for a phone!
    A phone isn't something you should have to pay off over 3 years!
    Long gone are the days of 12 month contracts where they'd cover half the cost of the handset (waaaaaay back, 8210 on a $35 or $55 plan for like $399 up front I think it was).
    The last contract "deal" I felt like I got was 2017 for the 256gb iPhone 8 on a $59 plan with Optus and I think the handset was free, no MRO, but for a long time now I've been buying handsets outright.

  •  

    What Ever Happened to Phones Being Free on a Plan?

  •  

    Plans are no longer a good deal. I think the big difference is that prepaid got cheaper, so by comparison plans are a poorer deal.

    For instance there are plenty of deals for a large number of gigs and a $10 - $15 per month cost with prepaid these days.

    Kogan was the first to start really cheap prepaid, though there are lots of companies offering it these days.

  • +2 votes

    It was always a “scam” as far as I remember, I always buy prepaid and always outright.

    Though it still doesn’t stop my friends from saying “dude I am paying $90 a month and they included the latest iPhone for free! What a deal bro!”
    Ignorance is bliss, let them be happy 😂😂😂

    •  

      Looking at all the JB Hifi and Good Guy deals, yes the plans are pretty awesome if you use more than 10 gigs of data a month.

      The good deals, means after phone cost, you're paying $20-$40 a month for a crap load of data.

      Prepaid route is only good if you don't use much data.

  •  

    I just went through my emails and found this:

    2011, Samsung Galaxy S, $29/month plan, phone was about a year old. It also looks like I was paying $30/month for a Galaxy S2 on Virgin, circa 2012 (sometimes an extra $10, must have been data or calls?).

    So yeah it was a pretty common thing to get decent phones for "free" if you shopped around.

  • +1 vote

    Last plan I found for my partner was in 2019 on Optus which was iPhone XR on $69 per month, 24 month plan, 100GB shared data.

    Total cost over 24 months was $1,656 and phone outright RRP was around $1,100 at the time.

    There was definitely no plans for $23 on a 100GB a month at the time.

    I also had my mobile on a plan with Optus + home internet and got a 5% discount on all 3 for being bundled together.

  • +1 vote

    I've actually found that never to be the case, until recently.

    JB 100$/mo plan 12mo + $600 S21 Ultra 5g. No way you're getting that value outright.

  •  

    I think OP is right in regards to mobile phones. Mobile phone are outright are cheaper. Postpaid plans have been expensive based on (my) requirements.
    I got my SamsungS21 for $500 plus I m paying $12.50 per month where I get 150Gb and unlimited calls local and overseas. So in total cost for 24months is $800 which is $33 per month. Where as post plan itself cost at least $40 per month with International calls plus mobile cost.

  •  

    Anyone here grab the Pixel 2 XL deal posted in 2018? $49 per month (with port in discount) for unlimited local calls and texts with 20GB per month data. Was by far and away the best plan I ever signed up for for value. I agree with the sentiment that they appeared cheaper in the past but there are gems that pop up every now and then

    • +1 vote

      2018 Pixel 2 panda checking in…it was epic deal…

    • +1 vote

      No, it wont get any much better. Telcos now have very limited options to raise revenue compared to 20 years ago when they could subsidised the phone to slug you off with 30c/min call and 25c/sms,and that's not including data charge, and they were able to charge you thousands per month on that.
      nowadays the only way to differentiate on the plan is mobile data allowance and unless you're a teenager having plenty of free time to tiktok 100gb a month or living on a desolate place with last century adsl then there is little incentive to go on a high data plan.

      On the other hand smartphone manufacturer got sucked into their own vicious cycle of spinning new upgrade twice a year, treating mobile phone as a season fashion. And they need to find way to recover that cost by making new phone more expensive. So the two have to work together to survive.

    • +1 vote

      I grabbed the Pixel 2 on that plan. Still on it… Was hoping they'd do a similar deal for the Pixel 4a 5G, but no dice.

  •  

    Beside the occasional big promotion, I'd say that they used to cost a bit more or similar price when get on a plan (buying outright & sim only vs phone plan). However, in recent years, the big 3 have changed the way they do it (coincidence? Probably not). They all now make you pay the same price for the sim (whether you get phone or not) and then let you take a phone on monthly payment (at full RRP). They even increase the price on all the sim plans recently.
    Phone plan right now is significantly more expensive compared to before. Unless you need/use a shitton of data, you would be better off with prepaid and buy phone outright (when there's a sale)