Comparing the Cost: Buying a Phone Outright vs Going on a Contract

    AUSTRALIA, May 06, 2012 /24-7PressRelease/ -- Now that some mobiles cost the same as a laptop, signing a 24-month contract may seem a small price to pay for a subsidised smartphone. But does buying a smartphone on a contract save you money in the long run, or should you dig deep, avoid the two-year lock-in, and buy outright?

Comparison website Compare Mobile Plans analyses the best contract plans on the market to find the answers.

iPhone 4s
Apple's latest device is powerful, sleek and features voice recognition software. The $800 price tag puts this smartphone at the premium end of the market and is an expensive initial outlay.

Taking the iPhone 4s 16GB as a case study, should consumers order from Apple or their preferred network provider?

The Amaysim plan represents a $378.40 saving over two years compared to the Virgin Mobile Topless plan (assuming the customer keeps the plan for that long, given it is a month-to-month contract).

Again, stretching the cost out over 24 months gives a total cost of $1039.76 for the TPG plan, which is slightly cheaper than the similar-valued Virgin Mobile Fair Go $29 plan. But the cheapest option for a light user here is the Optus $19 plan.

Not only can buying mobile phones outright save you money overall, it also leaves you free to switch providers without breaking your contract, in case you relocate to an area with poor coverage, move overseas, or just fancy a change.

24-month vs month-to-month
Of course, not everyone is happy to spend almost a thousand dollars in one go and if you are using a credit card to pay for your smartphone over several months, you could quickly lose any savings you might have made in interest payments. Another advantage of buying a phone on a contract is the additional support in case something goes wrong.

Getting the best value for your smartphone
These comparisons show there is a lot of value in SIM only mobile deals from a provider such as Amaysim or TPG but the real secret to getting the best value from any plan is to work out your own usage and find plans that match.

Importantly, consumers need to do this type of research before walking into a phone shop because straight comparisons are very difficult. In the above example, the Virgin plan looks better because it offers $190 worth of value compared to TPG's $180 plan. But because Virgin charges slightly more per call and on the flagfall fees, you could make more calls on the TPG plan.

Sarah McDonald, spokesperson for Compare Mobile Plans, said: "Whether you buy your smartphone outright or go for a 24-month contract, you need to work out your average useage and compare plans from a range of providers first. It doesn't have to be hard if you use a comparison website and you could potentially save hundreds of dollars by doing a little bit of research before you commit to a contract."

About Compare Mobile Plans
Compare Mobile Plans is a free, independent comparison website for consumers looking for a mobile phone plan in Australia.

For further information please contact:
Scott Kennedy, CEO, www.CompareMobilePlans.com.au
E: [email protected]
T: (1300 850 518)

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