Telstra has taken the wraps of their brand new phone leasing option. The plans are open to both Business (lease Plans) and Personal (Go Swap plans) customers alike. However, unlike a typical lease, the Telstra plan allows you to upgrade your handset after one year for a flat fee of $99, or free if you sign up before 24 December this year.
Now, there are a few caveats before we cover the specifics of the lease.
To get the phone upgrade you must “return the phone in good working order and contract to a new 24-month handset and service plan”. To spell that out, the phone must be in good nick, no damage etc and you’ll need to sign up for another 24 month plan, and if you don’t sign on before December 24th you’ll pay the $99 swap out fee.
If you’ve cracked your screen the upgrade fee at 12 months is increased to $229 (so $130 to repair the screen), and for phones that are smashed beyond repair, the cost rises to $499, again with all the same upgrade conditions. For people who know they are likely to break their phone, there is another option, and that is to buy a $10 protection plan that will let you upgrade at any time for $190.
For those with a little more patience you can wait for 18 months and get a new phone for free but with all of the same conditions, device returned in good condition, and sign up for a new 24-month contract.
With a lease you never actually own the device, you pay an ongoing monthly fee for the use of the phone and at the end of the service contract (2 years in this case) you simply hand the device back and you’re done, but you don’t have a phone anymore.
According to Telstra, customers can save up to $10/ month, or a maximum of $240 over the life of the plan. Just remember that while you can save “up to” that amount you won’t own the phone at the end. Let’s look at a comparison. Let’s look at buying a Pixel XL 128 GB on either a business lease or purchase plan.
In the comparison above, a 128Gb Pixel XL will cost $117/ month if leased or $120/ month if purchased. That’s a saving of $3/ month or $72 over the life of the plan, but you end up with nothing at 2 years. Let’s compare the upgrade options.
With the lease plan if you sign up now you can swap the device once for $0, if it’s in good condition, or if you signup after Christmas a swap over will cost $99 after 12 months or free after 18 months. With a purchase plan (business or personal) you get the ‘New phone feeling” option. This allows you to upgrade after 12 months for $149, again as long as the phone is in good condition and if you recontact for another 24 months.
Analysis
So if you grab a lease now and intend on swapping device in 12 months it MAY be a good option, or if you are accident prone and will smash your phone to hell, and you’re willing to pay either the $499 swap over fee or the $10/ month ‘insurance’ and the $190 damaged device swap over fee it may also be a good option for you.
Overall it’s unclear how beneficial these plans are in the long run.
Perhaps, some business will find an economic way of massaging the most out of these plans. If you’re the type to get a new phone every year, and the math works out for you perhaps Telstra’s new phone leasing options may be the best way to keep your phone habit fed?
If you’re interested in the Business lease plans then check them out here. If you more interested in the new Go Mobile Swap Plans for personal use then check them out here.
Let us now if you’re tempted to lease a phone instead of buying one.
Don’t sound like much of a deal, whylease better or buying there’s always eBay lol…
That looks like truly awful “value”.
Where do all the traded in phones go?
According to Telstra they get refurbished and resold
In that case, I’ll just wait for one of those refurbished phones as it might be lower in price.
You’d hope so, considering somebody else has already half paid it off.
Do you know where can I buy one?
They get resold overseas. Australian carriers arent legally allowed to re-sell used phones or hardware.
Telcos would rather lock you in to the plan and it’s limited offerings than they would the device. They make hardly anything from the device, but charging $100 for /only/ 10GB will be ludicrous in 18 months time. They don’t like the customers who buy outright and go on BYO offerings because they aren’t locking the customers in to a plan that will have crappy inclusions by the end of it. With BYO if you don’t like the inclusions you simply switch to the newer offering. Vodafone allow you to ‘rate plan change’ within your contract to the new version… Read more »
Agreed about dodgy Telstra. I’d recommend everyone to watch the ABC TV clip on Youtube : Plan and Simple | The Checkout Providers are trying to hit you with the “lazy tax” – an invisible surcharge on consumer apathy. Maybe you had a good plan with the telco 2 years ago. Your phone plan hasn’t changed, but the world has changed a lot since then. e.g when you signed up 2 years ago, you probably still cared about the cost of making phone calls. Now, every telco is offering unlimited voice and text, but your old plan doesn’t offer those,… Read more »
well said
All good points, but your advice all hinges on purchasing a phone outright. The vast majority of Australians stick to handset contracts because they just dont want to drop upwards of $1000 on a phone which they’ll likely break, lose or want to upgrade in a year.
I agree with you that handset contracts arent the best value, but for most people it’s the convenience factor. Also, all 3 major carriers offer month-to-month SIM only contracts.