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Customers Likely To Lose Out As Carriers Push Leasing Plans

Although the promise of low monthly fees and a yearly upgrade to a new phone will undoubtedly attract some, the new lease plans being peddled by Telstra and Optus might not be as good for customers in reality.

In the face of trends that have seen more and more customers buy handsets outright, carriers have begun shifting towards promoting this new business model. The pitch here is that customers can pay less per-month for the latest smartphone and then upgrade from their existing phone to the next year’s model after twelve months.

Unfortunately, the reality reflected in the terms and conditions of these upgrade-friendly lease plans is less wallet-friendly. A Samsung Galaxy S8 or HTC U on of Telstra’s Go Mobile Swap Lease Plans starts at about $75 a month over a 24-month period, meaning that fulfillment of the whole contract will cost you about $500-700 more than buying the phone outright would.

Except that Telstra actually still owns your handset at the end of the contract, regardless of whether you upgrade or not. As well as preventing you from selling your handset off and recovering any of your costs in the short term, this could lock you into a cycle of perpetual contracts in the longer one.

Of course, you can choose to upgrade it after 12-months for a fee of $99. Doing so means you’ll be paying slightly less than the outright cost, broken out over a 12-month period.

However, if the phone has experienced minor damage during your 12-month lease, you’ll be up for an additional $229 in repair fees and $499 for major damage.

Telstra don’t have any exact details on what qualifies as major and minor damage online but they do indicate that cracked screens will see you pay up an additional $229 while non-functioning handsets will cost you the larger fee. This ambiguity absolutely favor the carriers.

Telstra offers an ‘Assure’ service at an additional $10 a month that promises to reduce repair costs for your device to $190. This lets you upgrade your damaged phone at any time and in any condition for a flat fee of $190 when you recontract to a new 24 month service and handset plan.

The key difference here between this and Telstra’s New Phone Feeling plans is that the upgrade fee is $50 less and you don’t get the ability to hold onto your phone at the end of your contract. At the conclusion of your lease, you’ll still have to return the device and (likely) sign up for a fresh contract.

Optus’ offering isn’t much better. A Samsung Galaxy S8 on their My Plan Flex starts at $62 a month but carries a lot of the same strings and drawback present in Telstra’s package. Their ‘Device Protect’ insurance is also a little more costly at $14 a month.

Signing onto a Mobile Go Swap plan puts a lot of power with the telcos and can leave you with little recourse should you lose or damage your phone.

While you have the potential to save a little bit of money over a traditional plan or buying outright, the odds really are stacked against you. It’s a high-risk option where the potential savings are clearly outweighed by the potential extra-costs.

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