Are phone plans getting more expensive?

Is it true that phone plans are becoming increasingly expensive?

Currently at the typing of this article, I have less than a fortnight to pick a new phone plan with Vodafone. Now, when I was younger I couldn’t handle a 24 month plan, this would be the first time I would reach the complete 24 months. Somewhere along the two years, Vodafone removed the option to change phone plans with 2 months remaining, meaning that you were stuck in your contract for the full 24 months. Upon browsing through their phone plans, I noticed that their phone plans appear to be getting absurdly overpriced. Is this true? Let me explain:

Two years ago, I purchase a Samsung Galaxy s6 at a price of $60 a month on their red plans with the phone included, this was around 1-2 months after the release of the s6. Included the phone plan was the typical infinite calls and text as well as 3.5gb of data, the 0.5gb being a free offer.

Last year, A family member purchased a Samsung Galaxy s7 for $70 a month on their red plans with the phone included, now this was yet again 1-2 months after the release of the s7. The plan included the typical stuff but the data had increased to 7.0gb of data, 1.0gb

Now, there are no currently offered phone plans that include the phone, s8, with the plan, the closest plan I could find is a $90 plan, which is an $80 red plan along with $10 for the handset payment. Now you still get the typical stuff but the data has increased yet again, to 13.0 gb of data, this is with 5.0gb of free bonus data offered in a promotional.

 

This had me thinking, phone companies are always pushing consumers to opt for more expensive plans with all their “bonus” inclusions into the plans, enticing the consumer to opt for the more expensive plan. Once they reach a solid amount of customers on a more expensive plan, it is only sensible to then push up the phone plans to make whatever was pushed to become the norm in phone pricing.

 

Current Day offerings

$60 Red Plan $70 Red Plan $80 Red Plan
Handset fees s8 $26 $18 $10
Data 3.0gb 6.0gb 8.0gb
“Bonus Data” 0.0gb 4.0gb 5.0gb
Total Data 3.0gb 10.0gb 13.0gb
24 month payment $2,064 $2,112 $2,160

 

From this table above, we can definitely see the push for consumers to opt for the higher phone contract option, with only less than $100 difference overall between the $80 dollar phone plan and the $60 dollar phone plan.

 

However, we must factor in the different RRP of each Samsung flagship, perhaps the increase in phone prices have affected the phone pricings.

Phone Size RRP
Samsung Galaxy s6 64 GB $1,149
Samsung Galaxy s7 32 GB $1,149
Samsung Galaxy s8 64 GB $1,199

 

No, not really. Phone pricing has been really stable over the last three years, however 4 to 5 years ago we saw a huge jump in pricing, not looking at anyone (apple). If the handsets aren’t changing too much in pricing, then what are we paying for?

 

Data.

 

Data Add ons $15 $30 $50
Amount of Data 2.0 GB 5.0GB 10.0GB

 

The table above shows the current cost of data add on’s and the amount of data the consumer should expect to receive, they are shocking. The entire premise of paying add on’s each month is to receive more data, this is hardly justifiable. What strikes me is the lack of data offering with the $50 dollar plan, 10GB… These data add on’s aren’t meant for the consumer to buy, these are only there to justify the increase in phone contract pricing with the handset. Which too be fair, $10 for an increase in 6GB of data is justifiable in my opinion, but this won’t appeal to most consumers.

 

The only changes in the phone plans has been data, Vodafone customers once received benefits such as free spotify premium in 2014, which ended on the 7th of December 2016 along with Stan or the Sydney morning herald/The age. How does vodafone expect to maintain their customer base when other telcos are offering cheaper plans and an extensive entertainment bundle. Telstra and optus both reward their customers, what are vodafone exactly offering?

 

Things you don’t need or things you cannot receive.

 

For an ordinary consumer, how do they justify the extra $20 a month after their contract ends, an added extra $480 over 24 months. Phone plans add to the continual scary growth of the cost of living in Australia.

 

Within time, we will see the S8 be able with $0 upfront only on the $80 red plan, each year being a $10 increase in their deals.

 

Verdict

 

In my perspective, Vodafone needs to throw in more and more entertainment deals to justify the increases in pricing. Bring back the spotify premium or strike a deal with Netflix so your customers either can have free few months of netflix or free streaming of Netflix. Moreover, Vodafone needs to maintain its customer loyalty with the emergence of cheaper telcos whom offer much more at a cheaper price, credits to Woolworths mobile with their amazing deals on the samsung s8 where they offered a similar plan to vodafone at ¾ of the price!

 

For consumers who chew through data, these phone plans are suited for you and are not absurdly priced. They offer more than enough data with each plan and will truly keep you going whether you be out and about or stuck with some shitty home internet. These data plans will definitely keep you satisfied and will justify the increase in prices.

 

On the other hand, consumers who do not use 13GB a month and only use around 2 – 3 GB a month, you are looking at a wastage of around 10GB. With compression becoming smarter and faster, less data is constantly being used, thus, you may be thinking these plans are absurdly priced. There are a few options however, that will better tailor your needs.

 

  1. Buying the phone outright and getting a sim only plan with vodafone.
  2. Buying the phone outright and getting a sim only plan with cheaper carriers.
  3. Change carriers to carriers such as Woolworths (whom offer phones).

 

For the sake of it, let’s look into option one.

Samsung S8 price at Jb Hi-fi: $1,199

Kogan sim only : $36.90

Vodafone sim only plan equivalent: $40 / $36 with student discount

Optus sim only plan equivalent: $40 / $36 with student discount

 

Total: $2,159/2,063

There are very minimal savings here, however if you find a plan that suits your needs, you should be looking at a saving from anywhere between $1 to $400. Therefore If you do not need the extra data, there are cheaper ways.

 

Vodafone

Image sourced from: http://www.vodafone.com.au/android/samsung-galaxy-s8

 

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