Why Your iPhone 6 Won't Have Such A Big Carrier Subsidy

Many users lock themselves into a 24-month contract when they buy a new phone, preferring to pay an extra handset charge each month rather than hundreds of dollars up-front. That results in a cheaper effective hardware price, since the carrier subsidises you in return for signing up to a long-term deal. But with a very evident trend for higher monthly charges for Apple handsets, that arrangement looks unlikely to deliver quite the same level of savings when the next iPhone emerges.

The topic of handset subsidies came up at today's launch of Optus' mildly-revamped contract plans. Optus MD for sales Rohan Gameson noted that the typical rate charged to the customer had gone up across every carrier over the last year. For instance, on a plan charging $60 a month, the handset charge for the latest model iPhone 12 months ago was $5, he said. Right now, it's $11. You're still being subsidised, but the rate of subsidy has dropped.

A 16GB iPhone 5 costs $799, so paying $11 a month over 24 months means you're getting the phone at the end of the contract for $264. It's still a big saving on the face of it. But if this trend continues, the saving may not be so large when the iPhone 5/iPhone 5S appears.


    "For instance, on a plane charging $60 a month, the handet for charged for the latest model iPhone 12 months ago was $5, he said. "

    Wow... what happened to that sentence? lol. Typos/spelling and grammar mistakes galore :P

      Yep, that was an utter linguistic disgrace. Fixed now.

        Nope, you are still on a $60 "Plane"

        I assume Tiger Airways?

        Hasn't the all-touchscreen experiment finished?

          Why in God's name would you want to go back to Physical keyboards and tiny screens?

            because blind

    Considering that you can now access both major networks through far cheaper providers; ie. Kogan, Aldi, amaysim etc; it has become far cheaper to buy outright.

    Unless of course you want 4G data on telstra; in which case you would need to go through telestra directly; but optus has it's 4G through Virgin; so it is still cheaper to buy outright in that regard.

      Prepaid will only generally be cheaper when compared to a contract plan that gives you MORE than you need per month (aka, a pretty poor choice for your needs) because it gives you the flexibility to always use all your credit before buying more.. But when compared to a plan that DOES accurately reflect your needs - you will pretty much always get a better deal on contract than dollar for dollar with prepaid.

      Above anecdotal evidence - it's just basic logic.. A more restrictive plan is never going to be more expensive from such large providers.. Nobody would do that. It makes no sense for business or for consumers..

      As for the handset itself - iPhones are generally one of the only common phones I see around that even attract such a cost.. For most high end phones they simply force you on to a longer contract, or a higher plan (say a $69 rather than a $59)

      Last edited 25/06/13 4:11 pm

        Nope, I pay basically $20 per month for 5GB data and like $500 worth of calls, no way in hell could i get that on a contract

    Who ever said digital would be the demise of good journalism?

    "For instance, on a plane charging $60 a month, the handet for charged for the latest model iPhone 12 months ago was $5, he said. Right now, it’s $11."

      To be honest, i'd rather have Angus' typos than most of the garbage that I see in the regular tabloids :)

    As a average/below average phone network user (dont come close to my call limit, rarely come close to my data limit), I look at it like this.

    For an iPhone 5:
    If i were to get an equivalent plan from say LiveConnected at my usage level its $15 instead of $71 from Optus (ignoring the 3g vs 4g diff for the moment), your paying $56 a month * 24 months = $1344 for the $800 phone. Now unless 4g is worth $22.67 a month your better of buying it outright (if you can afford it).

    Telecos do not subsidise phone costs. Apple doesnt even give 5% discount to telecos. We all know of you terminate the plan they will make you pay $36 per each month remaining to pay for the phone.

    No one gets $59 plans with no phone. They advertise these only to make people think they are getting a great subsidised deal.

    The reason the prices are going up has nothing to do with the phones - its to do with people using more of there data quota - which is strongly linked to phone ability (newer expensive phone owners tend to use all there data up more often than owners of slower and cheaper phones).

    '...the saving may not be so large when the iPhone 5/iPhone 5S appears.'

    5S/6 ? 5 is already out.

    The articles fails to answer the headline, it's made clear that the subsidies are less, but no reason as to why they are reducing. Which I kind of thought would be interesting to know.

      Because they now charge less for excess data, so need to make up the shortfall

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