Pre-paid, BYO SIM plan, 24 month contract? What should a yearly iPhone upgrader do?

Did a bit of last minute “do I go on a 24m contract, or go pre-paid, or BYO SIM contract” setup for new the new iPhone and thought I’d share my specific scenario. If you’re after a 64GB iPhone 6s on Telstra and like to upgrade your phone every year, then this could save you some cash.

Why Telstra? I was with Optus for a few weeks but they were awful. Billing system confused me and on the train from Ballarat to Melbourne got pretty much zero data throughput. That’s kind of a deal breaker for my wife and I. No big deal, it’s a month to month thing with Optus so there’s no cancelation fees. Vodafone is excellent but they won’t let me sign up for any of their non-prepaid products. I fail a credit or ID check every time. Plus where my wife works is a giant Vodafone blackspot so it’d be useless for her. That leaves me stuck with the expensive Telstra. Oh well. At least they’re chucking in free Apple Music – saves me $12/m on Spotify I’d otherwise be paying.

So some long winded calculations:

The $95 Go Mobile plan and a 64gb iPhone 6s is $112/month. Over 12 months the spend is $1344.

When it’s time to upgrade there’s two options: take advantage of the New Phone Feeling or cancel old contract and sign up for new one with new phone.

New Phone Feeling is $149 but you don’t get to keep the phone and have to re-sign for 24 months. All up you’ll be out of pocket $1493 for 12 months of use and have no iPhone to re-sell.

Alternatively you can cancel your contract and just sign up for a new plan. The full terms and conditions are here in this PDF. Of course it’s very dense and deliberately full of jargon to confuse people. But I’ve waded through it on your behalf.

Telstra will waive the early termination charge if you sign up for a new contact with them leaving you just to pay the remaining handset repayments. These are $17/month ($112-$95), but only whilst you’re under a contract as you get a hidden “Device Plan Credit” as part of going on a 24 month contract. When you cancel the contract, that credit no longer applies and you need to pay the “full” amount of the handset repayments. Unfortunately Telstra doesn’t make the Device Plan Credit amounts publicly available before you enter the contract. I asked on Telstra’s live chat and they told me that if I cancelled after 12 months the remaining handset repayments would be $612 for the 64GB iPhone 6s. In this scenario, the 12 month spend would be $1956. But you’d still have the old iPhone, which I would estimate to be worth at least $700 for a quick Gumtree sale in a year’s time. You’d be out of pocket $1256 for your 12 months of usage once you sell the phone, cancel the contract and sign up for a new Telstra plan.

Last year pre-paid was cheaper than all the other options for some reason, giving more data for the same price points. The telcos clearly fixed that error this year. Telstra has also moved to 28 day recharges, so there’s 13 recharges a year instead of 12. For $50 you get 4GB a recharge – a year of that is $650. An outright iPhone 6s 64GB is $1229. $1879 all up and if you sell the phone later for $700 you’ve only spent $1179 over the 12 months.

The bang for buck seems to be the SIM-only plans. $50/m gets you 5GB of data and free Apple Music. On pre-paid all you get is 4GB and Apple Music is not included for free. Though to get Apple Music, you need to enter a 12 month contract. If you leave during the 12 months, the ETC is $25 for every month left on your contract (e.g: leave with 9 months remaining and you’re up for $225). This is a bit of a bummer, as you can’t move around to whoever has a sweet deal on at the time. Unfortunately after trying out the 3 telcos again now that I’ve moved out to the country, Telstra is pretty much my only bet.

24 month contract (7GB/month) & New Phone Feeling – $1493 ($1350 after Apple Music) over 12 months
24 month contract (7GB/month), re-contract after 12 months & sell old phone – $1256 ($1113 after Apple Music) over 12 months
Pre-paid (4GB/28 days) & sell old phone – $1179 over 12 months
Go Mobile BYO plan (5GB/month) & sell old phone – $1179 ($1036 after Apple Music) over 12 months

So for this scenario, going on a BYO phone plan and buying the iPhone outright is the cheapest option. Means I have to cough up the $1129 up front for the iPhone, but also means I don’t have to stuff around with Telstra and contracts. Going on a contract instead of pre-paid also lets me pool my data with my wife, so we get 10GB/month to share and free Apple music, saving us a further $17.99/m (the cost of an Apple music family plan). The New Phone Feeling thing is a bit of a waste of money unless you really really hate selling your old iPhone on eBay or Gumtree.

Now to just sit and wait patiently for the new iPhone to arrive tomorrow via the lovely, competent and terrific under stress TNT. What a nice bunch of people TNT are. So good at their jobs too. Can’t wait to engage with TNT tomorrow. Mmmhmm.