Poll: Do You Prefer To Buy A Phone Outright... Or Subsidised On Contract?


    If Australia has 12 month contracts, without doubling the price, then I would certainly get on that. Otherwise, as it stands - screw contracts, upvote for outright. Yes it's more expensive right there & then, BUT it's better for someone like me who goes overseas a lot. I'd hate to pay 3 months out o f 12 on a contact, for not using it at all.

      My thoughts exactly: getting an upgrade every two years is pretty bad, considering how quickly tech is progressing.

        Really? I got a Galaxy S2 recently, and think it'll last for two 2-year contracts quite easily. When my contract runs out, I get a newer phone, sell it for $400 and my $30/month contract suddenly becomes around $15/month. An S2 running 4.2 is hardly old tech - there's absolutely no reason for me to upgrade.

          Um, I have some news for you... you've picked up a Galaxy S II now — over eighteen months since launch — and expect to be able to get $400 for it? Even in pristine condition, good luck getting more than $300 or so today. Another two years down the line? Good luck getting more than $75 for a nearly four year old phone. If that.

          Last edited 10/12/12 5:59 pm

            The way I read his/her/its comment was that they would sell the new phone received after the 2 year contract is up for $400 and continue using the SII for another 2 years. Still sounds crazy to me though.

        Why does it matter how quickly tech is progressing if the phone you have still works OK for you? Seriously, the only compelling reason to upgrade is to take advantage of newer, speedier networks (4G/LTE). That's the technology that matters, the phone itself is comparatively unimportant, especially these days when you can upgrade the software/firmware. e.g. I was looking at the new WP8 phones on the weekend and even though their specs absolutely blow my current phone away, the experience was no better at all. What will make me upgrade is 4G, not dual-core or high-res screens or anything else because none of those things improve the experience enough to justify spending a fortune.

          I don't usually agree with MotorMouth but in this case he has a point. I don't mind phones on a 24 month contract because I don't intend to upgrade my phones unless they no longer work. The contract saves me money on the purchase of the phone and gives me some credit to use to boot.

    I never understand how buying phone upright then going on a BYO plan is cheaper than going on contract. The total cost of contract plan over 2 years is always less than a BYO plan (even if its cheaper by month) then additional handset fee.

      That's you assuming you're buying the phone locally at a higher price. Phone prices can be up to $300 cheaper overseas (averaging 50 to 150). Warranty problems is your issue, but it's cheaper that way. Plus a contract means you're 'locked' into it for 2 years. If you want to change a phone every year, there is no real alternative then BYO plans.

      maybe you should consider going on a BYO plan from resellers such as TPG, Virgin, Crazy John, etc. you might not get the highest 3G speed but you still get the same mobile coverage but you get much cheaper BYO plan compared to the major providers such as Optus, Vodafone or Telstra...

      $12 Vaya contract over a 24 month period comes out a crap load less than any contract plan you can get on.

      Actually, if you use your phone a lot, you can save a bundle buying outright. e.g. Amaysim's unlimited plan is just $40 a month, Virgin's is $90 (other carriers are more expensive again). Over 24 months you save $1200, which can buy you a pretty schweet phone, or even a couple of phones over the period of a single contract with another telco. But I have just done the sums for myself and because I am only looking at a $29 plan, going on contract makes a lot more sense for me.

        Yeah man. I buy my phones outright and have been on an $18 TPG no contract plan for about 4 years now. 1 or 2gb data (not sure as I don't think I've gone over) and about 700$ in calls/text split between tpg to tpg and tpg to any network.

        I bought my Galaxy S1 for about $600 shortly after they came out, brand new off Ebay and still use it now (even though it's gone crusty and requires recharging every few hours).

        Once it does die I'll go back to my fully functional (and ever lasting battery) Nokia N95. It just works, reliably. I'm 25 and love tech, but can't justify the hundreds and hundreds of dollars in big plans and smartphones when all they are used for is the latest apps that are mostly games anyway. I've seen a few useful apps but people are just farming them out. I'd rather spend the same money on a tab so that I could use it as a mobile "computer" too.

    Phone bundled with plan always.
    Makes no sense to BYO just to avoid the tiny Mobile MRO, plus most carriers offer Insurance, so it's a win win.

      My comment above got snagged for moderation, so here's a quick 24-month comparison without the links:

      Galaxy Note 2 on Optus: $50/mon + $13/mon = Min total cost of $1752 (according to their page)

      BYO Galaxy Note 2: $569 + Vaya $500/1.5GB plan: $11/mon = Min total cost of $853

      That's a $900 difference, for the same phone, same network, and a slightly better plan. Not so tiny.

        Try that again with a Telstra plan

          Let's take the Lumia 920 as an example here.

          Lumia 920 Telstra: $65/mon = Min total cost of $1560 (according to their page) (24 months)

          BYO Lumia 920: $696 + Telstra $50 BYO plan = Min total cost of $1296 for 12 months. Much more on 24 months, bu technology get's updated so often you get left behind within 6 months.

            So assuming the cheapest telstra contract is as above.
            If you have a home/work Wi-FI set-up, do you need all the free data that comes with the contract?
            If you go for Telstra pre-paid $30/month = total cost for 24 months as from above = $1416

        I live in Tassie and basically have no choice when it comes to Mobile Carriers, I should have mentioned this.
        It's either be with Telstra and have service everywhere, or be with a different carrier and have no service anywhere. :/

        For that price all u get us a 3g version 4g costs $700. Im paying 12months $1200 with a generous data allowance and unlimited calls texts.

        You might want to redo those calculations and include the outright cost of the phone.

          Look again. $11/mon * 24 months + $20 for the SIM = $284. Add $569 for the phone = $853.

          If you're with Optus, you're paying double what you should. If you're on Telstra, then consider carefully if their network is really worth paying that extra $400+ a year.

            You aren't comparing properly. $569 for a Note 2? That would be the 3G only model for that price. The Optus plan you are referring to is for the 4G model of the Note 2 which retails for $899 and the cheapest I've found is $769 at mobicity for an import (asian) model.

            So your calculations are off by at least $200 if you are looking at an import Note 2, and closer to $350 if you are looking at Australian pricing.

            There's still a difference there of course, but it's not as big as you are claiming.

              You're right - $569 is indeed the 3G model. Kogan sell the 4G model for $699, so that's $130 more. Or you could get the Galaxy S3 4G instead for $579, though Optus still want the same for it.

              Either way, you're still paying 80-100% more by going Optus. $700-800 savings is too much to ignore for most of us.

    I got my wife and I Galaxy S2's last xmas on 24 month contracts. The phone was free, and as we got two we got a further discount. We pay $26/month each (and nothing for the fone) on a $30 bundle and have yet to exceed our monthly allowance. Ice Cream sandwich update+Nova Launcher makes for a nice combo.
    I haven't seen anything yet that makes me want to 'upgrade' immediately, i can wait another 12 months, by then the galaxy note 2 and other handsets will have better deals.

    My wife and I signed up to the First on 3 plan when they launched in Australia in July 2001. I hardly use my phone, so my average bill was under $10/month. My wife's bill is usually under $1 a month. It would have been stupid to not buy a phone outright and stay on the same plan. Earlier this year, I rolled over to a $13.99 plan on Vodafone. I had to in order to get an iPhone 4S. I still don't use all of my credit, but didn't have a choice.

    I noticed that the poll didn't have an option for less than one phone per year. I would have picked one phone every two to three years.

    I'm tethered to an old telstra deal I got a few years ago. I'm paying 60 dollars a month for 500 dollars of calls and 5 gig of data.

    Considering that I almost (Or DO) max my data use every month, and the current 60 + Handset plan with telstra gives you a fifth of that, I save a huge amount of money by spending 5-600 dollars every year or two on a new outright phone.

    Getting phones on plans has its benefits...for example you usually end up paying far less for the phone over the duration of the contract...BUT you are locked into a contract for 24 months.

    So the answer could be yes or no depending on how you look at it. Personally I try to go for a contract if it's possible with the phone I want as it does end up cheaper in the long run, and I'm not planning on moving carriers anytime soon.

    Having said that, I did just buy a phone for my wife for Christmas, but that's because getting it on a plan would have meant upgrading to a higher cost plan than she is currently on (with benefits she didn't need and won't use) so therefore would have ended up much more expensive in the long run.

    Last edited 10/12/12 5:44 pm

    What a crappy survey, didn't even show me the results! And didn't give me an option to choose buying a phone less than once a year - still rockin' the 2009 3GS baby yea! will probably upgrade to the 5S next year...

      haha, I'm still with the 3G, probably the person with the oldest phone here...

        Still sporting a Nokia 5110 :p
        Great phone! The screen has many features, such as a back light and the colour green.

    Outright Phone Purchase: How Many New Phones Do You Generally Buy Yourself Each Year? *

    My answer: 0.3333333334

      Good point. We've added options for one every 1 to 2 years and one every 3 years. Thx for the feedback!

    Easy choice for me, as I am issued a phone for work, so I buy outright iPhones each year, and thats my only cost. Use my work SIM in my iPhone. Works for me.

    I've typically bought on contract every two to three years, this year I've been through an outright Lumia 800 (not worth contracting but my iPhone died) and now a contract Lumia 920. I'm contemplating upgrading yearly, contract every two years and purchase the years in between with how quickly phones are moving these days.

    The mistake a lot of shoppers make is they assume a plan is always better value than a prepaid. In Australia, that may be true, varying by carrier, for people who use mostly voice calling. If, on the other hand, like me, you use your phone mostly for SMS and internet access (people call ME, I don't call THEM), prepaid can be better. For example, I'm with Optus, on their Crew Cap. I spend $40 every 60 days, and tack on a $10 recharge as needed for a whole damn gigabyte of extra data. I get unlimited texting, and I rarely run out of data credit. Before this, I was on a $59 cap which got me everything I'm getting now, plus more calling, which I NEVER USED.

    It literally costs me half as much to be on a prepaid service, according to my usage patterns. That means buying phones outright is a much more attractive prospect (especially considering my propensity to buy the new hotness every year or so and give my current phone to a family member).

    I guess it helps that I used to sell phones. I used to live and breathe squeezing value out of things that never quite suited my customers. Optus has some pretty damned attractive prepaids right now, check out their Dollar Days offer - basically unlimited everything for $60 a month. Their own plans don't beat that. To get everything BUT DATA unlimited, you need to go on at least their $99 Timeless plan. You save $40 a month to go with a prepaid, and you aren't locked into a contract. Win win.

      $40? You're still paying $26 too much :-) Try looking beyond the Big 3.

      You can get the same amount of calls & data for as little as $7/month, with the right post-paid plan from Optus resellers. And if you want more data, a mere $4/month extra will get you 1.5GB (and more calls than you might ever need).


          Vaya. Not a customer myself, but they're the cheapest I've found. Live Connected had similar-priced plans until recently, and TPG are are not far off either.

          I'd linked to them in a post I made yesterday, but inevitably it was gobbled by the moderation system :-( Bloody irritating, watching your well-sourced post disappear into oblivion, with a 30% chance at best of ever seeing it re-appear.

            Thanks. This thread has been good for me, uncovering things like this. Vaya have plans that make an outright purchase very attractive. $11 a month for what is currently costing me $39. That's $28 (saved each month) x 24 months = $672 to spend on a phone (or hookers).

        Unfortunately, in this godforsaken swamp, two of the big three are the only ones to offer any measure of functionality.

    I work for a phone company and trust me - subsidy is dead.

    Love buying outright phones! Ive only tried being on contract once and hated every minute of it. The phone I was sold was a Nokia slide type phone with more business functions. I had the phone 6 months and after leaving my job I had no need to keep the phone so I was forced to fork out over a thousand dollers to end my contract.

    Since then, Ive just saved up for a few weeks and always carefully researched and planned the greatest phone available.

    I even tried in vein to convince a close friend to buy outright but she didn't listen and is now stuck with a phone that's seriously flawed and there is nothing she can about it. She also hates being overcharged data usage and hates having to speak to someone on the phone whom she cant understand.

    Like Michael V stated. The doller days is extremely good vaule. 60 bucks a month for unlimited everything and you never have to speak to anyone. ( i can even recharge using optus app in 1 min) I honestly dont know why people bother with contracts.

    Outright. Is this survey being sold to pay for Gizmodo's next internet bill ?

    I have done both in the past but as phones get more and more expensive, it makes less and less sense to buy your own unless you are a heavy user. I'm currently on a $29 plan and I have just gone through the process of assessing my options, as my phone died last week and I'm off contract. I really want to get a 4G phone but I simply cannot justify the expense when I can get a really good 3G phone for nothing on a new $29 plan. So at this stage it seems I'll re-sign with Virgin to get myself an HTC 8S for free on a $29 plan. I'll probably also add another 2Gb of data for an extra $10, then upgrade it when my 3G modem contract is up next March, as I find tethering my phone more reliable than using the modem.

      More expensive? I thought they were getting dramatically cheaper.

      I'm sure you remember 8 years back when top-drawer smartphones like the Sony Ericsson P800/P900, HTC Universal, i-mate Jasjam etc all cost $1200-$1500. Then it was $800-$1000, and nowadays only Apple charge that much - the latest Samsungs cost $500-700, and the Nexus range is an absolute steal at $400.

        I'm talking about mainstream phones with economies of scale behind them, not pioneering curiosities that didn't work very well and nobody owned. My first smartphone was a Samsung Wave, which was free on a $19 plan. That was $456 for the phone plus two year's usage. Good luck getting a deal like that today. The Wave may seem pretty lame now but at the time it was fairly impressive, with it's gorgeous superAMOLED screen and all.

          Hey, I bought some :-) Sure, the P800 was uncommon, but the Jasjam/HTC TyTn/Dopod 838Pro was very popular, for a pre-2007 smartphone.

          That deal sounds decent, but today you can get e.g. a good mid-range HTC One V and 2 years light usage for $368 total, or a top-of-the-range Nexus 4 with plenty of calls & data for $664 over 2 years.

    I got to page 2/3 of the survey and it ended?

    I tend to switch between both actually. My monthly spend is always about the same (cap plan) and if my contract has finished (like it just has) the only 'extra' I need to spend is the handset fee. So for example I just got an iPhone 5 for $7 / month on a new contract.

    In 12 or 18 months time I will buy my next phone outright - while still paying the measly $7 / month ($168 over 24 months) on this iPhone.

    Best of both worlds! Frequent upgrades and only shelling out for an outright handset every 3+ years.

    Had a mobile since 1996 and never once gone on contract.

    Only ever bought outright. Might cost a little more overall, but you can't put a price on freedom. BYO plans with Telstra are far better than Subsidised plans anyway.

    $49 a month, I get $550 in calls (of which I only use $100), unlimited text, 1.5GB of data.

    If I had gone the Lumia 920 on contract, $65 a month, $600 in calls (of which I'd still only use $100), unlimited text but only 1GB of data.

    Can't lose that .5GB of data.

    Where are the results? This is rubbish. I won't be filling in any more Giz surveys.

    I get my phones on Telstra Contract for 24 months, but only keep them for 12 months.
    Telstra will happily cancel the contract, but will hold you to your handset repayments, but that's ok, because I sell the handset on Ebay (I got over $400 for my Iphone 4 with cases etc) (don't worry, I got an SSG3) easily paying off the repayments.

    I voted "outright" because that's what I would *prefer*, but what I actually do is get my phones on contract. Why? Because usually the price difference isn't very great, and in any case I don't have heaps of cahsola to throw at a luxury every year or two.

    This is why the Nexus 4 is so interesting - unlike the absurd RRP of various other flagship smartphones, Google is really attracting my dollar.

      But the price difference is *huge* - if you look beyond the big guys. There are Optus resellers offering plans for a quarter the price of the equivalent plan from Optus, and all you need to do is buy your phone outright.

      A Nexus 4 paired with a plan like that can total less than $700 over 2 years. I'm betting that's less than half what you're paying on contract.

        My 12 month contract is costing me about $750, including a phone that would have cost approx. $650 to buy at the time. Is there a way to get 2GB/month, stupid amount of calls and text per month plus phone insurance for 12 months at a total cost of $100?

        ... I looked, and I don't think so. Certainly not in late March 2012.

          That sounds pretty decent for a 12 month contract, I agree. Best I can see for a 2GB plan is $204/year, not sure about insurance.

          Would still be worth going outright if you could find a cheap enough (sub $500) phone. The Nexus 4 comes to mind, and there's a lot ofother excellent phones in that range at places like Kogan.

            No doubt about it, and I would totally go prepaid if I went "backwards" to an Asha or bought a phone from eBay. But I'm a bit of a gadget hound, so I want the latest ... and Vodafone really, really wants to retain my business :P

    My postpaid plan is min $10 and cap $39.. so works out cheaper to buy outright.
    I get what phone i want when i want it.

    Three phones in my life so far, all subsidised on Telstra (for coverage and signal).

    High school graduation gift from parents was the upfront part of a Nokia 3350. Held onto that for almost five years until battery and reception issues forced me onto NextG (I was paranoid about missing interviews and/or site calls).

    I got a Nokia 6120c on MRO, so I'm not sure if that was subsidised or not. Great little phone, still have it in case I need a backup.

    Got my iPhone 3GS for $300 upfront on a $35 business plan in 2009. Plan ran out beginning of this year.

    I would upgrade and go on another phone plan, but I'm paying $54 now for a plan with 2GB data. To get >=2GB data on a new plan I'd have to go to an $80 plan. For the $624 difference I could get a 920, 8X or RAZR HD outright, so who knows.

    Contract - because it's too hard to pass up $5 or $10 for a top of the range handset over 24 months.

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