Optus Now Charging Up Front For iPhones On All Plans Under $79 A Month

Optus has always been the best value option when it comes to getting yourself an iPhone - it was just a question of whether the network could handle the extra load the phone put on it. But that value changed today when the Telco took away the ability to pay off the handset over the life of your contract for all plans under $79 a month.

Starting today, if you want an iPhone on an Optus $19, $29, $49 or $59 cap plan, you will have to fork out an upfront fee for the phone. On $79 plans and above, you'll still get the option of monthly handset repayments.

How much you have to pay depends on on which phone you select and which cap you select, as you can see from the table below:

The change only affects iPhones, not other smartphones, and includes the 8GB iPhone 3GS. The charge will appear on new customers' first invoice.

We're not sure why Optus have made this change, but given that it only includes Apple handsets, it seems like a subtle way to get people to move away from the Apple ecosystem. Given that Optus can either customise other smartphone platforms or at least add their own widgets to the device, as well as receive alternative streams of revenue through apps or entertainment content, pushing customers to Android or even WP7 would be better for their bottom line.

But that's just speculation. The real question now is whether this will push people away from Optus as the iPhone pusher of choice?


Comments

    I think it's good to have this option to pay the amount up front, but forcing people that way seems very odd to me.

      You always had the option to pay up front (afaik) - I've done that in the past. I think the worse news is that the total amount has gone up... I don't pay anything for a 16GB iPhone 4 on the $59/month plan, but new customers have to pay $228! Ouch.

      Sorry, but just another reason to move away from paying the apple tax. I have a 3gs 32gb that i have on an optus $59 plan with $13 pm repayment, this is more. Rather go with android and save my money

      So, for the $59 plan at least, they've just increased the cost over 24 months by $228 for the iPhone 4 16gb?

      I'm currently on the $59 plan with an iPhone 4 16gb and that has no handset repayments. $59 is all I pay each month and there was nothing upfront.

        Same deal here. My wife and I have iPhones on Optus' Business Plans, I have a 4, she a 3G. Around the time that this article was published I rang to upgrade her phone as her contract had reached maturity. I was told by my "Business Consultant" that Optus had "put a stop-sell on all iPhone 4's" and that they "are only ordering enough to fulfill [their] backorder commitment". I was offered a short-term BYO contract, to keep us on Optus until June/July when the expect to start receiving iPhone5 phones and contracts. Perhaps they are just trying to steer people away from iPhones due to a lack of available handsets? I also get the feeling that they would like to sweep the iPhone4 under the rug. One of there E2E network managers inadvertently told me that Optus receive an unacceptable amount of customer complaints about the iPhone4 service issues.

    Umm even Telstra offers are better than these. And their coverage and speed is considerably better.

    normally many people who earns less like me would prefer to go with $29 plan for iPhone4 16gb.
    but now if we need to pay upfront of $516
    then i would say its better to go for a android phone (that runs 2.2) or either buy the iphone4 16gb outright price from apple for $859 and go for a prepaid play with no need of contacts

    My guess is that this is related to the ACCC ruling that telcos must provide warranty for the length of any lock-in contract that includes the purchase of a phone. Apple only provide a 12 month warranty, which means the telco has to pick up the cost if the phone breaks during the 2nd half of the contract.

    Optus probably did their sums and worked out that they could still make $$ on the $79 and up plans, but for the cheaper plans, they didn't want to carry the risk.

    I get the feeling this due to 3 reasons, Optus has such a backlog of orders they can be more choosie as to who they connect, the iPhone has a very high rate of fraud and also I get the feeling google just deposited a very large cheque in optus's account

    Is this a way to get around having to honour a 24 month warranty as stated by the ACCC. You arent paying for the handset over the life of the contract so it would be the standard 12 months.

    well my contract is up right when the iPhone5 comes out... I know who I WON'T be renewing with. The $59 cap has always been MORE then enough for the average Jo.... Question is, where do I go now?

    Add this to (dare I say) Today Tonight's report on telcos charging in 60 second blocks only further proves how Aussie telcos are a F*cking rip off!

      Matt - actually (at least until now) we've had it much better than, say, the US, where you might pay $200 up front on a more expensive plan. My American friends are always amazed when they find how cheaply we can get iPhones here.

      And the poor old Yanks don't have anything like the TIO.

      We actually have it pretty good here. Or had... :)

    its so customers don't feel as ripped off when they try to break their contract early to upgrade.

    now there is NO reason for Optus to charge a 'break' fee if a customer chooses to simply upgrade their phone after a year, if they stay on the same contract, there is no reason for it, simply pay the upfront fee for the new phone.

      @Matt: That might be true if this were a policy for all phones, but why would they only do this for iPhones?

      No doubt there's another reason - perhaps Optus is sick of clawing their money back from their most heavily subsidised handsets over 24 months, and just wants to get the money up front.

    Also maybe now wIth version on board stock is going to be harder to come across

    It could be a way to curb demand, perhaps. Recently I tried to renew my wife's contract from a brick and mortar and couldn't find one of any capacity from Sydney to Hornsby, for about 2 weeks. Eventually ordered over the phone and got one.

    Pushing people away from the iPhone is about profits as well... Optus makes barely any money out of an iPhone contract, that's why they're pushing people towards other phones...

    Also the ridiculous prices Apple in now charging for the phones... it is $1028 for the 32GB...

    I never understood why there was always such a price premium for a mere 16gb extra. Why can't smart phones have 100gb storage (without a SD / micro SD card) for roughly the same existing price?

      Because flash memory is expensive no matter what form it takes, and as far as I know it's pretty much the only form of memory available to put in phones. Hit up eBay for some 64Gb memory sticks and you're up for around $200; 128Gb goes for around $400, and it's similarly pricey putting the chips in phones.

      There's a huge difference between a hard drive and flash storage. 32/64 GB cards alone are still very expensive now. It's not just an issue of memory, it also has to fit inside the shell of the IP4.

    Woah !! I got my phone this monday and will pay only 9.5$ a month (9.5$ * 24 = 228) instead of 228$ upfront on the 59$ cap ...
    I would have preferred that instead of bigger having monthly bills ...
    But that's me :) anyhow, I plan to sell the iPhone 4 and buy an outright iPhone 5 if there are a lot of new features :)

    Pretty horrible value. At this point, if you were tossing up between Optus/Teltra, just take the Next-G option.

    But then again, this is what Americans have had to live with for years.

    2 very easy things to remember.

    1. iPhone is not a cheap phone, it is a premium product, commanding premium services.
    Uni students on tiny little $29 plans, technically and economically cannot afford an iPhone.

    2. The plan has to match that.

    There you go. Market analysis in 30 secs.

    AFAIK - this is due to a price increase over the bottom line of the iphone from Apple, not Optus just pushing the new price up. (internal memo)

      There wasnt a bottom line increase,
      Ive worked for two major telcos and internal memos like this are designed to make csr's and anyone else in the organisation that reads them, feel that they are not just blindly ripping people off! Lets all petition optus to remove these upfront rip offs!

      BTW OPTUS you lost 5 iphones in one sale yesterday because of this, Ive got another 10 we will sign up if they revoke this bs upfront cost.

    Why would anybody pay a premium for a phone that performs so poorly in reception. The iPhone I had was the worst phone for missing or dropping calls and others I know who moved to an iPhone had the same experience. Style over substance, Apple knows how to suck the fanbois in.

    I went to an Optus store to sign a 24 month contract for an iPhone on the 10th, but I couldn't complete the transaction on the day, so I went back the next day and it had changed. No iPhone for me! Not happy Optus!

    btw, They still haven't updated there web site.

    I wish I'd known about this yesterday before I went out to upgrade my phone.

    I'd been with Optus for 10 years straight on contracts but there is no way I was forking out hundreds of dollars up front for an iPhone.

    Even the sales staff in 2 stores were complaining of the lack of sales now that this has come into place.

    They've lost my business - Telstra were more than happy to put me on a new contract with handset repayments included.

    In the past month, all carriers except for Vodafone have upped their iPhone 4 monthly payments. After 6 months of launch you would expect rates to go down rather than up, but this just shows the solidity of demand for the iPhone 4.

    Here's a list of all iPhone 4 plans: http://www.phonesandplans.com.au/MobilePhone/Apple/iPhone4--16GB/189/

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