Evaluating phone buying versus contract subscription

With many mobile handsets today costing as much as a laptop computer, subscribing to a 2-year continuous contract can seem an attractive option to many people. However, can consumers save money in the long-term by splashing out on a 2-year contract – or is it worth investing in the phone itself?

Online comparator Compare Mobile Plans can help people to make the most informed choice possible.

iPhone 4s

The latest generation iPhone from Apple is a powerful smartphone which boasts voice recognition software – however the price, $800, makes it an initially large investment for any consumer.

Consider the iPhone 4s 16 gigabit version or iPhone 3gs – are shoppers better off buying directly from Apple or picking up a phone from their chosen network operator?

Amaysim offers a plan which equates to a $378.40 saving across a two year period in comparison with Virgin Mobile’s Topless plan.

With a light user plan however, such as that offered by TPG, the cost over a 2-year period comes out at $1039.76 – slightly cheaper than the Virgin Mobile Fair Go $29 plan. However the cheapest option around for light users is that offered by Optus, with their $19 plan.

One further advantage available to consumers who buy mobile handsets outright is that not only can they save money overall, they are also able to switch network operators without breaking contracts. This can be a benefit if relocating to an area with poor coverage, travelling overseas or for any other reason.

24-month vs month-to-month

Nonetheless, not every consumer is able or content to spend nearly $1000 in one go – similarly consumers who pay off a phone one a monthly basis via credit card can forego any potential savings in interest payment terms.
Buying a new phone on contract also offers the peace of mind which goes with
24/7 customer support in the event of anything going wrong.

Getting the best value for your smartphone There is undoubtedly value for money to be had by buying a SIM only deal from the likes of Amaysim or TPG – however the truly smart move is to review your usage habits, work out what you really need and then research to find the right plan, be it pay as you go, monthly or prepaid mobile, for your needs.

Consumers should do this research before going shopping, since straight comparisons are often not particularly objective. As above, Virgin’s plan appears better on the surface, giving $190 worth of value compared to the TPG plan at $180. However since Virgin charge more per call and also on flagfall fees, the TPG plan may well turn out to be better value.

Sarah McDonald, spokesperson for Compare Mobile Plans, comments: “The smartest move consumers can make is to work out their likely usage and then research all the providers’ phone plans around to find the right plan. Using a specialist comparison website really can help people save hundreds of dollars by picking the right plan and deciding whether or not to buy their new smartphone outright.”

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