Buying A Mobile Phone Outright – Will I Save Money ?

Buying a mobile phone outright - Will I Save money ?

You’ve got to do the maths to work out whether it’s better to take a contract from your phone company or to buy the phone outright and add a SIM later.

Here’s How to Save 30% On A Mobile Phone Contract

If you buy your own phone and get a SIM Only plan there’s a chance you’re going to save a substantial amount of money on your phone bill
over the next 2 years. Better yet, when you know the inside story, you’ll still be able to get access to the Network of the phone company you love – Vodafone, Telstra or Optus for a price which is less than you’re used to paying.Do you have your own phone ? Are you are buying a new phone or picking up a second hand mobile phone? 59% of Australian these days do one of the two. Phone buyers are taking advantage of the market to save substantial amounts of money. The majority are choosing a SIM Only plans or a prepaid plan deal and piecing things together themselves to save money.

To figure out if buying a phone and adding a SIM only plan makes sense for you, you need to understand a little about how the value of the deal is calculated. Here’s how you can do it yourself.


Another example

It makes sense to compare a variety of devices ( phones ) and a variety of plans. We’ve got a couple examples here of Apple’s major 2016 product release which allows us to make an important point. Over time, telcos are adding more and more data to their plans : For new customers. Existing customers, those under contract don’t get the benefit of the improvement.

In the year separating those phone launches, things change. Vodafone’s data inclusion doubled. Remember, if you’d bought the Galaxy S5 at the time it was launched, in mid 2014, your plan would include half as much data. If you bought the Galaxy S5 yourself and added a plan to it, not only would you have saved money, you could have moved to a plan with more data, without penalty, after a year and got twice as much data for the same price.

 So how do you do it ?

The process to follow to save up to 30%

You have a couple of fundamental options when you’re choosing a phone. In our view, only one makes sense for the vast majority of users.

  • Option 1: You can buy your phone outright and add a SIM Only plan to it:
    Whether you buy the phone new or second hand, typically, you’ll save around 30% of your total costs over a 2 year period doing it this way. What many people don’t realise is that if you choose an MVNO ( that’s a Mobile Virtual network Operator ) you can get access to the same network that Telstra, Optus or Vodafone will sell you, for far less money. By using their plans ( we have a few recommendations below ) and your own phone, you’ll save a fortune.
  • Option 2 : You can take out a contract with one of the major phone companies:
    Optus, Vodafone or Telstra. They’ll charge you 30% more, very often for access to the same network. There is no such thing as a free lunch or a free phone. When you take out a contract with one of the major phone companies, you have to cover all of their costs. You’re also tied in with them, whatever happens, for the next 24 months.


Getting the SIM from the right place

When it comes to buying a mobile phone yourself the key to success is focusing on the total costs you’ll incur over the time you own it. We recommend the following plans. We suggest you consider your own usage behavior and use that to determine whether these plans are right for you. Remember, you can choose to access the Telstra, Optus or Vodafone mobile networks with these MVNOs. Below on this page are some recommendations on how you can save money buying a second hand mobile phone.

Just look at the difference the right SIM Only provider can make.

Some SIM Only providers are MVNOs

How can MVNOs save you money

MVNOs save their customers money by leasing network access ‘in bulk’ from the three, major Australian phone companies. Then they sell it, to customers like you, at a significant discount.

With MVNOs, you can take advantage of lower rates, and SIMs that are contract-free.  They almost always offer better deals than the major phone companies. They don’t have the same marketing spends to pass on in the costs they charge you. They don’t spend nearly as much on advertising their brand as the others. By keeping their business models simple, they reduce the support costs and pass the savings on to you. They also need to charge less because they’re not as well known as their multinational competitors.

By keeping their business models simple, MVNOs reduce the support costs and pass the savings on to you in their SIM Only plans.

It’s important to realize that the network coverage component of the ‘product’ the MVNOs sell is very often exactly the same thing being sold by Optus or Vodafone. The coverage you’ll get from an Optus MVNO is exactly the same as the coverage you’ll get from Optus itself. There are a few exceptions and ‘gotchas’ to think about. We’ve covered those in detail, below.

Optus Network or MVNO Comparison


Myths about MVNOs: Prioritization

Some shoppers suspect that MVNOs are getting low quality network bandwidth. For example, minutes that aren’t used by carriers during peak activity. That’s just not true.  In many ways, network access is like electricity. It’s a utility which is the same whomever or whichever company you buy it from. You will not get a lower priority on the network if you go with an MVNO.

Why are MVNO deals cheaper?

The MVNOs marketplace is highly competitive. The competition is focused where you want it. MVNOs have an agreed charter with the major phone companies. Each MVNO is set up to focus on servicing ( selling to ) a particular segment.

A segment is just a group of users. Here are a couple of our favorite MVNOs and the segments they are designed to address.