24 Months Phone Plan vs 12 Months SIM Plans

Mar 30, 2017 | Phones

When I used to work as a Sales representative/Account Manager at one of Australia’s biggest telecommunication companies, I came across these questions all the time. Why should I go on a contract for 24 months? I am happy with what I am paying and don’t want to be locked in a contract. It was shocking, how many customers were happy to pay $10 to $50 more per month for the outdated plans. People need to be open-minded about what the other person has to say/offer. The first 2 questions that I kept on asking customers were:

  1. Are you planning to use the service for next 2 years? If yes, why not make it cheaper?
  2. X amount worth of device is also included at a lower price. Why not take the advantage while you can?

What is the difference between 24 Months Plan & 12 Months SIM Plans?

When you go on a plan with a device, normally it is on a 24 Month plan to keep the monthly repayment down and pay off the cost of the device in 24 Months. Since the telecommunications companies buy the devices in bulk, the device cost becomes cheaper for them than buying a phone outright for us. That is the reason they can mix and match the plans and bring out their mouth-watering promotions. The most important thing for these giant companies is customer retention. The more customers they have, more opportunity for them to make more money in the future.

12 Month SIM only plans are the plans without devices. It is worth to buy devices outright from websites like Kogan.com for cheap when you are on a $40 SIM only plan and you get around 10 GB of Data. Also to get an iPhone 7 with the same Inclusion costs you over $90 per month. Basically, you will be paying $50 more every month, which equals to $1200 in 24 months. Whereas, you can buy it outright for as little as $929 AUD (as of March 2017) from Kogan. That is a saving of over $200 in 24 months.

When to change from SIM only plan to a 24 Months plan?

  • When you can’t afford to buy a phone outright right away.
  • When the promotions are better for the plans with handsets.
  • When you are not benefiting from the value of the SIM only plan.

Let me elaborate more on “When you are not benefiting from the value of the SIM only plan”.

This applies to most of the elderly people or for the people who are just not that active online. If your monthly data usage on your phone is less than 1GB (1024mb) and the only reason you use your phone is for calls and text. People need to understand the value being wasted as it’s not being utilized. Instead of the data, you can go on a 24-month plan with the device included at about $40 per month with Unlimited Calls and Text within Australia and 1GB to 2GB of data per month.

Also, don’t sweat it if you do not need a device or the device you are getting doesn’t interest you. Try to find out what phones can be included in the plan and do one of the following:

  • Ask your family members if they need a device OR
  • Give it as a gift
  • Keep it as a spare; it’s entirely up to you.

When I was speaking to my customers, if they didn’t want to do any of the above, I simply advised them to sell it. For example an iPhone SE 16GB of storage, it is listed as $679 AUD on the Apple website as of March 2017. Even if the customer sells it for $550, they will be able to pay off their monthly repayment for the next 13 Months ($550/$40). Basically, you will be using the plan that suits you for free for the next year. If that is not a good deal, what is? You just have to be motivated enough to take one step further to take the reward.

I hope I have made this clear for people who are new to this or for those people who are wasting their money for not using what is given in the plan.

 

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