With smartphone technology advancing every year, staying up-to-date with the latest and greatest models has been an expensive aspiration.
Add to that the fact that most contracts are a minimum of two years and it is clear why so many experts encourage consumers to compare contracts carefully to avoid frustration a few months down the track.
In fact, new research from Pureprofile has revealed that almost half (46%) of all Australians would like to have the option of getting the latest smartphone when locked into a phone plan.
But these issues could change in the near future, following the launch of a new contract option from Telstra. The telecommunications giant recently announced a new 24-month plan that gives customers the chance to upgrade their smartphone after just 12 months.
The feature, dubbed ‘Telstra New Phone Feeling’ means customers pay $10 per month on top of their plan (minimum cost $120 plus plan and handset costs) and return their existing phone undamaged and in good working order to trade up to a new model on a new two year handset plan.
The company’s Group Managing Director for Product, Warwick Bray, says Telstra has listened to feedback from consumers and is the first carrier in Australia to make this offer available across a range of plans for consumer customers.
“We know lots of Australians really look forward to getting their hands on the latest smartphone technology and we want to give them the chance to experience that ‘new phone feeling’ more frequently,” he explains in a statement about the new offer.
The new contracts are bound to fuel competition between other telcos. Optus already offers a trade-in deal for new customers, who can get a credit on their bill if they upgrade to a new phone (and Optus contract) and exchange their old one.
Virgin Mobile, on the other hand, lets customers upgrade existing plans as long as they are worth the same or more than the previous option (otherwise the contract has to be paid out). And Vodafone vaguely outlines that customers “may be eligible for an upgrade, which means no need to wait until the end of your contract.”
These options are not as flexible as Telstra’s new deals, which roll out in March 2014, suggesting change will be needed to keep up with the competition.
Other Ways To Upgrade Smartphones
The most common and flexible smartphone plans in recent years have been available only to customers who buy a phone outright and then take it to a chosen provider – a trend highlighted by an increase in the number of BYO or SIM-only phone plans available through all providers.
But getting customers to sign onto a contract still gives telecoms more guaranteed revenue, which could be why phone-and-plan deals have also become more competitive. There are now discounts for trading in an old phone and signing up for a new one on a plan (such as the Optus example given above), cashback offers and complimentary extras as well as online and in-store sales on plans.
Then there are the phone calls that some customers have received from their providers, stating that they are eligible for exclusive deals based on how long they have been a customer, and new upgrade offers when there are only a few months left on a 24-month contract.
All of these signup deals make contracts more appealing because they mean people avoid spending hundreds of dollars upfront buying a new phone. Plus most deals now have 24-month warranties, so any phone troubles are covered during the contract term.
But they still frequently leave people stuck with the one smartphone, while new models are released almost yearly and often upgrade essential and popular features such as the operating system, battery life and camera quality.
Data collected by Pureprofile, however, also shows that one in three people actually willing to pay out a contract and upgrade their handset before the end of their two-year contract.
“Those aged 25-34 are most excited about the prospect of a plan that includes the chance to trade up to a new phone every year with 63% indicating they’d like the option, followed by 18-24 year olds (61%) and those aged 35-44 (55%),” the research – which was commissioned by Telstra – noted.
While there is also the option of buying a phone outright and negotiating contract terms with telcos, the new plans from Telstra could be a real game-changer for the Australian mobile phone market. But it will still be consumers who compare plans between networks and do research on the phones available that come out on top with these kinds of deals.
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