Opinion: The 24-month phone contract is dead, writes News.com.au. Phone plans go out of date quickly, leaving their buyers stuck with small data quotas. But there's also the fact that new smartphones, bundled with these plans, are apparently a Bad Idea — because they can be lost, or damaged, or stolen.
It's that last point that is particularly galling.
This post was originally published on April 28 at 12PM.
"When I signed onto my $80 per month Vodafone plan, I was excited because at the end of 24-month contract I would be the proud owner of a two-year-old smartphone.
"The reality aligned more with me losing my smartphone three months into my plan after one too many whiskeys in a dubious nightspot with poles.
"This meant I was left to pay off a smartphone I would never see again for the next 21 months."
Take Better Care Of Your Things
The thrust of the News.com.au article is that, if you damage or lose your phone while you're on a contract, you'll still have to pay it off. Does that surprise anyone? There is a very good reason that the system exists in the way that it does. It boils down to the fact that desirable smartphones are expensive, and long-term payment plans are, for the majority of buyers, the least painful way to acquire them upfront.
90 per cent of Australia's smartphone-using public are on a postpaid plan according to Kantar Worldpanel data — of the 84 per cent of Australia's approximately 18 million population that own a phone, that's about 13.6 million Aussies that pay for their phone bills monthly, and that could well be subsidising their phone by paying for it monthly as part of a long-term contract.
But the extra, hidden price you pay for the privilege of getting a phone without having paid for it fully is that it isn't really yours. Until you've paid every last cent of it off, that phone still belongs to Telstra or Optus or Vodafone — and you should treat it as such.
If you currently possess a phone that you have purchased on a contract, you should treat it well. Treat it like you're driving someone else's car. How pissed off would you be if someone borrowed your shiny new sports car, and brought it back with the windscreen smashed in and the panels dented?
Now, I'm actually a staunch believer in buying phones outright, purely because I highly value the ability to switch between carriers whenever I want. News and I have that in common. But I'm equally understanding of the fact that not many people have a thousand dollars of disposable income sitting around for the privilege of buying a new phone.
And that is why 24-month contracts are valuable. With a generally small extra monthly fee — anything from zero dollars to $10 extra is common — you get a brand new, high end, powerful phone in your hand on the day that you sign the contract.
You're Not Locked In To Your Contract
More than that reason for the existence of the 24-month contract in the first place, the article ignores the fact that you're not locked into your contract. Now, more than ever, you as a consumer are offered the flexibility to change your contract in the middle of its run, or to use a get-out clause in Australia's robust consumer laws to your advantage.
Vodafone's general manager of postpay, Stephen Smyth, says the value of a 24-month contract is primarily for someone that needs or wants a new device to use that plan with — you're silly not to take one if you're signing up. "Many consumers value the ability to pay the device off over a period of time," and with phones costing over $1000 that's not a controversial statement.
Vodafone, for its part, also does sell phones outright — for as little as $100 — and has flexible payment plans for phones that are separate to the SIM Only plans that the company also sells.
Even more than that, Vodafone proactively contacts customers to offer to move them "onto new plans with higher data allowances," as well as new initiatives like the company's $5 Roaming and $10 extra data top-ups — services that weren't offered in the Stone Age of mobile telecommunications because they weren't needed.
Even more than that, Vodafone lets customers pay to insure their phones so that they can be careless with them if they so wish. An extra $15 per month — 10 per cent on top of the News writer's $150 monthly shocker — means the telco will repair or replace your phone with a small excess if you manage to destroy it. Other telcos are no different.
And then you can go direct to the manufacturer. Apple has its own AppleCare+ insurance plans, and clearly lays out the price of screen repairs both with and without insurance. Samsung, more than ever, is taking care of the customers that buy its Galaxy smartphones, too — these companies want you as a loyal customer, and want you to be happy with your expensive device.
There's no reason to be angry with your telco, or with the company that makes your phone — just because you broke it, or just because you signed up to a plan you didn't understand or no longer like.
Use The Consumer Rights You Have Available
It's a competitive market, the Aussie smartphone scene. Everyone wants to get ahead of each other. And that's why companies like HTC are doubling down on their promises to consumers that their phones are quality, and their phones will stand the test of time.
HTC will replace your HTC 10 if you smash the screen in the first six months. Just once, but that should be enough unless you're genuinely negligent. Huawei's Screen Promise does the same, but for the first year of ownership. And, for god's sake, buy a case. Tech21 and EFM make amazing cases with high-tech materials that cushion your phone from damage. They're worth it, pure and simple.
As for your contract, if you're not happy, talk to your telco. They'll help you out, they want you as a customer. If you want to break your contract, they will offer you a compromise — as long as you're willing to pay what you owe, especially for the phone that you've been using on their dime for the last few months.
The TIO is the strongest advocate that Australia's smartphone-owning public have on their side. Telstra's recent mobile outages had a few angry Twitter users asking if they could get out of their contracts and, yes, that is a strategy you can try if you're at the end of your tether. But that's a last resort, obviously, and the TIO itself will ask if you've tried to talk to your telco beforehand.
Don't Break Things That You Don't Own
I'm led to believe that amongst young people, having a broken phone screen is almost a badge of honour. A Washington Post article from 2013 says the same: like ripped jeans or a dirty beard, a cracked phone screen shows the owner doesn't really care about what the world thinks about them or the way they live their lives. Fuck your conformity, I'm not going to be a responsible adult and take care of my thousand dollar slice of glass and gold and silicon.
Come on, guys, seriously. It's not cool to be careless. As a tech journalist I hear a lot, month on month on month, about the special care and effort that Samsung and Apple and Huawei and LG and HTC have gone to in refining the metal finishes and the curved glass and knurled tactile buttons on their phones.
These things cost millions of dollars to design and develop — not only to withstand the nicks and scratches and bumps and drops of everyday life, which are inevitable as they are annoying, but to look good at the same time. It's like designing a Ferrari to be bulletproof. That's how crazy the engineering is on an iPhone's Series 7000 aluminium shell or a Samsung's Gorilla Glass 4 display.
Knowing that, I'm disappointed when I so much as scratch my phone. And you should feel the same.
By the way — there is, of course, the vague possibility that this is a not-so-subtle piece of promotion for News.com.au's partnership with One Big Switch, a 'people power' financial services company hoping to negotiate a better deal with a telco through a Kickstarteresque "sign up with us and we'll get you a better deal, we promise" marketing campaign. News Corp is a One Big Switch shareholder, and both companies have a vested interest trashing the telcos and contracts that have kept us in discounted phones for plenty of years in the past.
But we'll let that one slide, right?