Buying on contract means you won't have to pay up-front for an iPhone 6 or iPhone 6 Plus -- but you could actually end up paying more for the same phone, calls and data than you need to. Here's how much you can save by buying up-front and choosing the right prepaid plan -- up to $450 compared to a 24-month contract.
Picture: Getty Images
We summarised every iPhone 6 and iPhone 6 Plus contract plan available in Australia last week in our comprehensive Planhacker guide. Many consumers believe that a contract deal makes sense -- not only do they save paying $869 or more for the handset, they also receive a "subsidy" over the life of the contract, and a fixed amount of call, text and data during that time. But does that actually result in a real saving?
To work out whether going on contract makes sense, we decided to compare the costs of Australia's best prepaid plans over a 24-month period owning an iPhone 6 or 6 Plus with the equivalent consumer contract plans on the same network. If you can buy a phone outright and pay for 24 months on prepaid and spend less than being on contract, then there's no sense in being locked in -- and that's without factoring in the value of being able to switch networks or plans if you move or if a better offer emerges.
The prepaid plans
In this context, an equivalent plan is one which offers the same amount of data. Experience suggests that data inclusions are the most salient feature when comparing smartphone plans -- very few people use all their call and text allocations on a contract, but running out of data on a phone plan is common. As such, we've aimed for the prepaid plans with the best available data allocations. (With that said, three of the prepaid plans we've chosen offer unlimited calls and texts to Australian numbers anyway.)
These are the plans we've highlighted (we discuss these in more detail in our roundup of the best prepaid plans). For Optus, we've included Amaysim (good value but only 3G) and Vaya (less generous but offers 4G). For Telstra, we've included the Beyond Talk plan with added data from your monthly recharge value; For Vodafone, we've looked at the Red SIM Only $50 plan, which is available month-to-month.
We've included two Vaya plans here (for people who want Optus 4G) because going for the maximum data in this case doesn't necessarily produce the best-value deal, as you'll see. Every one of these plans (except for the $29 Vaya plan) includes unlimited texting. We've calculated how much it would cost to stay on this plan for 24 months -- adding that figure to the outright buy price for the iPhone 6/6 Plus handset will then inform our comparisons with the contract plans.
|Plan||Network||Cost||Data||2-min calls||Total cost|
The total costs
We've calculated the total cost for each prepaid plan by adding the outright buy price from Apple. You'll potentially be able to pick up the phones for less through non-Apple providers, and Kogan is currently offering them for cheaper -- using the Apple price provides a worst-case comparison. We've then compared to the total cost on the nearest equivalent contract plan.
Amaysim's plans are very good value, and Amaysim can now handle both 3G and 4G, though Optus plans have become a little better, too.
We've compared Amaysim's Unlimited plan ($44.90 a month) with the closest equivalent Optus plan offering 6000MB of data, which costs $87 a month. That's a small difference, and it means that going with Amaysim results in some savings.
|Model||Cost||Amaysim total||Optus total||Prepaid saving|
|iPhone 6 16GB||$999.00||$2076.60||$2088.00||$11.40|
|iPhone 6 64GB||$1149.00||$2226.60||$2232.00||$5.40|
|iPhone 6 128GB||$1299.00||$2376.60||$2376.00||-$0.60|
Vaya offers access to Optus' 4G network, but has less generous data allocations than Amaysim. The $27 a month plan includes 2500MB of data, but doesn't offer unlimited calls. The closest plan on Optus offers 3GB per month, and costs $60 a month plus handset charges. Here's how the two compare, though keep in mind the Optus plan here offers a bit more data:
|Model||Cost||Vaya total||Optus total||Prepaid saving|
|iPhone 6 16GB||$999.00||$1695.00||$1968.00||$273.00|
|iPhone 6 64GB||$1149.00||$1845.00||$2112.00||$267.00|
|iPhone 6 128GB||$1299.00||$1995.00||$2256.00||$261.00|
Vaya's most generous data allocation, 3000MB, costs $57 a month and includes unlimited Australian calls and texts. Optus' $80 plan also includes 3000MB of data, and in this case comes out ahead every single time -- in this more direct comparison, prepaid will cost you more in the long run:
|Model||Cost||Vaya total||Optus total||Prepaid saving|
|iPhone 6 16GB||$999.00||$2367.00||$1968.00||-$399.00|
|iPhone 6 64GB||$1149.00||$2517.00||$2112.00||-$405.00|
|iPhone 6 128GB||$1299.00||$2667.00||$2256.00||-$411.00|
If you don't need a lot of data and calls but do want 4G, Vaya is worth considering. If data matters, Amaysim looks a far better choice.
It's hard to get a decent prepaid deal with Telstra -- the best option is to use L prepaid plan. That gives you 6GB of data for $70 a month. The relevant contract plan to compare is Telstra's $95 a month L plan -- that includes 7GB of data with its bonus offer of an additional 1000MB. It looks like Telstra have fixed their plans now to be cheaper overall on a contract:
|Model||Cost||Telstra prepaid total||Telstra contract total||Prepaid saving|
|iPhone 6 16GB||$999.00||$2679.00||$2112.00||$-567.00|
|iPhone 6 64GB||$1149.00||$2829.00||$2256.00||$-573.00|
|iPhone 6 128GB||$1299.00||$2979.00||$2448.00||$-531.00|
|iPhone 6 Plus 16GB||$1149.00||$2829.00||$2256.00||$-573.00|
|iPhone 6 Plus 64GB||$1299.00||$2979.00||$2448.00||$-531.00|
|iPhone 6 Plus 128GB||$1449.00||$3129.00||$2592.00||$-537.00|
That's not much savings, and given that it also involves fewer calls and texts, we're honestly not sure it's worth it if you want an iPhone 6 on the Telstra network.
Vodafone an example of there not being much difference between prepaid and contract options. The difference is so small, one might choose to go the prepaid route simply to not be locked into anything. However it's important to note that the prepaid plans now charge $0.02 per MB, and give nthe nature of this PAYG system, its real cost will depend entirely on you. It might be a better option if you never really watch Youtube videos or download onto your phone:
|Model||Cost||Vodafone prepaid total||Vodafone contract total||Prepaid saving|
|iPhone 6 16GB||$999.00||$2069.00||$2040.00||-$29.00|
|iPhone 6 64GB||$1149.00||$2199.00||$2160.00||-$39.00|
|iPhone 6 128GB||$1299.00||$2329.00||$2352.00||-$7.00|
|iPhone 6 Plus 16GB||$1149.00||$2199.00||$2160.00||-$39.00|
|iPhone 6 Plus 64GB||$1299.00||$2329.00||$2352.00||-$7.00|
|iPhone 6 Plus 128GB||$1449.00||$2449.00||$2496.00||$47.00|
This post has been updated to reflect pricing and plan changes.