Subsidised Smartphones - A Really Bad Deal?

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#686938 17-Sep-2012 08:45

@ Dairyxox, unless it is essential that you have the iP5 immediately that it is released, wouldn't it be better to sit on your hands (as suggested above) for a while and see how the cards fall from the different telcos? I know it goes against the geek creed of 'new tech now!' but at the moment you probably have a perfectly operable iP4, running iOS5 soon to be iOS6, on a plan that you have been happy with. As I understand it those contract conditions just roll over month by month after the 24 months are up. Because the demand for the iP5 will be so great in the first delivery wave I believe there will be no bargains to be had. If the iP4S experience was anything to go by, if you don't get one in round one you will probably have to wait 4-6 weeks. Christmas offerings from 1 Nov maybe?

Just having read @code15's comments above maybe what I wrote above is just BS. However, from what I know of the iPhone, it is provided to the vendors at such a high wholesale price there is very little 'wriggle room' to offer deals. Not the case for other phones such as the SGS3 which has dropped 20% in 2 months.

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matisyahu

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#686940 17-Sep-2012 08:46

Noel Leemings has a 48 months interest free special running now - maybe the better deal would be to use something like that + contract? I haven't done the sums but it should be reasonable in price.

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loganjames

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#686944 17-Sep-2012 08:52

kawaii: Noel Leemings has a 48 months interest free special running now - maybe the better deal would be to use something like that + contract? I haven't done the sums but it should be reasonable in price.

But the 48 months excludes apple products (as almost all long term interest free does)

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#686963 17-Sep-2012 09:47

loganjames:
kawaii: Noel Leemings has a 48 months interest free special running now - maybe the better deal would be to use something like that + contract? I haven't done the sums but it should be reasonable in price.

But the 48 months excludes apple products (as almost all long term interest free does)

And it's (yuck) GE.

Dairyxox

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#687003 17-Sep-2012 10:48

Hey Dingbatt, Yeah i know what you're saying, but on the other hand, I dont want to miss the special, if they only run it for a 'few' weeks from the launch of the phone.

I'm also worried about being able to stay on my 3GB data plan, because I would imagine that when they sign me up on a new subsidised plan, they will force me to the new smart plan with 250mb data.

ibuksh

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#687011 17-Sep-2012 11:06

it would be a good idea to see what deal 2 Degrees offers to match with the other telcos for the new iphone coz with 2Degrees plans $39 & above you get additional 1GB a month. I had the 3GB plan with vodafone and I hardly used even half of that. Unless you are a very heavy data user, 1.25GB should suffice

But in the end.. after the wait and watch.. the decision lies entirely with you..

Dairyxox

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#687020 17-Sep-2012 11:27

Yeah as you suggest the the solution is somewhere in the middle. Honestly I've never used the full 3GB in a month. My highest usage was about 750MB, and a typical month is about 350-450MB, so theres plenty of options for myself. 250mb wont cut it, and giving away bonus data for 6 months is next to useless on a 24 month plan.

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Regs

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#687449 17-Sep-2012 22:10

Dairyxox: Yeah as you suggest the the solution is somewhere in the middle. Honestly I've never used the full 3GB in a month. My highest usage was about 750MB, and a typical month is about 350-450MB, so theres plenty of options for myself. 250mb wont cut it, and giving away bonus data for 6 months is next to useless on a 24 month plan.

sounds like a $19 prepay plan with around 50 minutes talk, 5000 texts and 500mb data, and bit of extra data, might just about suffice. All three telcos are currently offering some sort of $19 special right now.

if you can get away with a $19/month plan, you free up $21 per month which adds up to $504 over a 24 month period....

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ibuksh

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#687450 17-Sep-2012 22:13

Regs:
Dairyxox: Yeah as you suggest the the solution is somewhere in the middle. Honestly I've never used the full 3GB in a month. My highest usage was about 750MB, and a typical month is about 350-450MB, so theres plenty of options for myself. 250mb wont cut it, and giving away bonus data for 6 months is next to useless on a 24 month plan.

sounds like a $19 prepay plan with around 50 minutes talk, 5000 texts and 500mb data, and bit of extra data, might just about suffice. All three telcos are currently offering some sort of $19 special right now.

if you can get away with a $19/month plan, you free up $21 per month which adds up to $504 over a 24 month period....

Thats correct but the $19 plan is only here to stay with telecom. The other telcos arent keeping this as an ongoing plan. Vodafone finishing end of Oct and 2degrees next jan. So if you want continuity for 24 months, your ideal choice would be telecom where once you have signed up to this, you will continue getting this until you fail to recharge..

Dratsab

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#687462 17-Sep-2012 22:34

Dairyxox: I'm also worried about being able to stay on my 3GB data plan, because I would imagine that when they sign me up on a new subsidised plan, they will force me to the new smart plan with 250mb data.

Yes, they will. The old plans can't be 'grandfathered'.

Johnr - correct if I'm wrong but as far as I'm aware, the only way for the OP to retain their 3GB data will be to buy a phone outright and keep rolling with the plan they're on.

johnr

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#687464 17-Sep-2012 22:35

Correct

Regs

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Snowflake

#687484 17-Sep-2012 23:49

ibuksh:
Regs:
Dairyxox: Yeah as you suggest the the solution is somewhere in the middle. Honestly I've never used the full 3GB in a month. My highest usage was about 750MB, and a typical month is about 350-450MB, so theres plenty of options for myself. 250mb wont cut it, and giving away bonus data for 6 months is next to useless on a 24 month plan.

sounds like a $19 prepay plan with around 50 minutes talk, 5000 texts and 500mb data, and bit of extra data, might just about suffice. All three telcos are currently offering some sort of $19 special right now.

if you can get away with a $19/month plan, you free up $21 per month which adds up to $504 over a 24 month period....

Thats correct but the $19 plan is only here to stay with telecom. The other telcos arent keeping this as an ongoing plan. Vodafone finishing end of Oct and 2degrees next jan. So if you want continuity for 24 months, your ideal choice would be telecom where once you have signed up to this, you will continue getting this until you fail to recharge..

so, for example, you could take a 2degrees $19/month plan and when (or perhaps IF) the data allowance reverts back to "normal" (300MB), consider buying a $99 12GB data add-on that lasts six months.

whichever way you cut it, signing up to a $45+ monthly plan is quite likely not the best way forward if your goal is simply to get a handset discount...

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BigMal

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#687540 18-Sep-2012 08:25

I would:

1. Sell the iphone 4 (you'd probably get around $400 - $450 for it).
2. Put the proceeds towards a new iphone5
3. Stay on your current plan (you won't get 3GB of data on any other plan without paying a massive monthly fee).
4. Ring Vodafone and ask if they will upgrade your minutes from 30 - 60.

I did the above steps, sold my old HTC Desire for $200 and replaced it with a Galaxy Nexus for $500.
Total cost was $300, I stayed on my plan with 3GB data and got upgraded to 60 minutes talk time by asking nicely.

jonherries

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#687574 18-Sep-2012 09:23

Regs: The RRP of the 16GB 4S is $1049 on the Vodafone site. Divide that by 24 and you get $43. That means that Vodafone would have to make more than $43 per month (*) from you in order to 'break even' if they gave you a fully subsidised phone. You can see why they only fully subsidise it on a plan that costs you more than $100 per month....

Now consider a $45 per month plan.

Two years ago, Vodafone might have been making more than half of that back as 'revenue' - say $25 (**). If they took half of that to 'subsidise' your phone, that would have been a $300 handset discount, and they would have been making $12.50 per month in net revenue.

A lot has happened in 2 years. That $45 plan will have more jammed into it than in the past. Now that revenue might be a lot less than what it was 2 years ago. Say $10 (***). Take half of that ($5) to apply to a handset subsidy and that gives you $120. That would bring the subsidised handset price down to around $929.

While I have zero confidence in my numbers, hopefully it gives you an idea as to why a handset subsidy might not be as good as you would hope. Vodafone (and the other Telco's) are in this game for a profit - they have to make their money somewhere.

NOTE: the iPhone 5 is offered for $199 on AT&T in the US with a minimum commitment of a $20/month 300MB DATA plan. In order to actually sign up for one of these it seems to also have to add a voice plan of $39.99 minimum. That would give you a $50/month 24 month commitment to get that $199 iphone on AT&T. $60/month for the 3GB Data plan option. An upfront price of NZ$240 and monthly of either NZ$60 or $NZ71.

(*) not quite accurate, Vodafone wont be paying $1049 for the iPhone. I'm sure their carrier discount isn't that big though.
(**) completely made up numbers. I have no idea what the actual vodafone revenue figures are
(***) completely made up numbers. I have no idea what the actual vodafone revenue figures are

I agree in principle with all of this, and think that it is very insightful, however I wouldn't underestimate the profit levels of the telcos. I think the marginal cost of adding a device to the network is probably close to zero, this means the actual profit on selling an iphone on a $45 plan is probably close to $45.

Worth considering that the telcos also make money when you come off contract and continue with the same plan and they make lots of money off overage and roaming.

Of course you mention Regs, that the numbers you are quoting are made up. But I don't think we need to feel sorry for the likes of VF and Telecom, they are doing just fine, otherwise how could VF afford one of their engineers to spend all his time on GZ forums?

Jon

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#687721 18-Sep-2012 13:55

interesting discussion.

I am not sure how Vodafone works for personal use but when we sign up to renew a contract after 24 months we are given about a $250 rebate in to a hardware fund. We are on larger plans but it could be worth asking if there is a way to resign on a plan and get a credit on a phone of choice.

John may correct me and tell me I am wrong but it couldn't hurt to ask.

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