The Myth of the Free Phone

If you bought a phone on a contract sometime in the last few of years, you may have been lead to believe that the cost of the phone was either free or dirt cheap. It’s an easy mistake to make, in fact it’s a mistake the telcos are banking on you making.

The truth is, smartphones are far too expensive for telcos to be giving them away. The most popular phones all cost well over $1000, and though there may be a discount in the bundled price of your plan, the rest of the cost is blended into the price of the plan.

The best way to see this is to compare the price of a phone plan with the price of a bring-your-own phone plan.

Take Telstra’s plans for the popular Samsung Galaxy S9, for example.

And compare it a selection of Telstra BYO Phone plans.

As is plain to see, the difference between similar plans with a phone and without a phone is quite a lot more, in this case about $40 per month. If you take this amount and multiple it by the length of the contract the total is $960: definitely not a free phone.

So what’s the plan, then?

If you’re looking to trim the fat out of your household budget, then the simple solution is to hang on to your current phone for as long as possible and save money with a BYO phone plan. Even if you don’t plan on changing providers, you should compare your options and make sure you are on a good deal.

Here are some great plans from the best-known brands:

For lots of people, switching to one of the plans in this list will cut their phone bills in half. And the table above doesn’t show you all of the plan benefits; so make sure you click on the links to take a closer look.

If you’re already a Telstra or Optus customer, it is as simple as logging into your account and requesting the switch, or giving them a call and having someone take care of it for you. If you’d like to save even more money, you might also consider one of the low-cost providers. All of the companies offer service on one of the big networks (Telstra, Optus or Vodafone) so you don’t have to worry about coverage.

As you can see, there are some very cheap phone provider alternatives if you’re willing to try someone new. Jeenee Mobile is a great choice, offering high value plans and unique plan options for seniors and people living with disabilities. Amaysim is another provider to consider; it is the largest of the challenger brands and known for its great customer service.

Jacqui Dent is associate editor at WhistleOut, Australia's largest mobile phone and internet comparison site.

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