Is it cheaper to buy an iPhone outright with a Pre-Paid SIM?

Summary: Tech types sing the virtues of buying iPhones outright and grabbing a Pre-Paid SIM, but is it actually cheaper in the long run to buy yours this way?

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Tech savvy types will often tell you that the most affordable way to buy and own a smartphone to pay for it outright, then choose a SIM-only plan. But is this actually true, especially for the iPhone 5s and iPhone 5c?

On the surface, this does make a fair bit of sense. One of the things that people hate most about phone plans is the feeling that they are 'locked in' for the contract period, so the outright purchase path does save you from feeling obligated to a telco. But based on price and the value of inclusions, is it cheaper, and therefore better?

To figure this out we'll look at the cheaper iPhone models, the 16GB iPhone 5s and 5c handsets. We'll then add in the cost of a pre-paid plan over 24-months and compare with the total cost of some of the telco's plans.

Telco Plans incl. handset repayments

Plan Inclusions iPhone 5s iPhone 5c
Vodafone $65 Red Plan Unlimited Calls + 1.5GB Data $1728 $1608
Optus $60 Plan 600 mins + 1GB Data $1776 $1656
Telstra $60 Plan 504 mins + 1GB Data $1872 $1704

SIM Only Plans (x 24 months) plus outright phone cost

Plan Inclusions iPhone 5s iPhone 5c
AldiMobile ($35) Unlimited Calls + 5GB Data $1709 $1579
Amaysim ($39.90) Unlimited Calls + 4GB Data $1827 $1697
Bendigo Bank ($39.90) Unlimited Calls + 3GB Data $1827 $1697
C Mobile ($49.90) Unlimited Calls + 2GB Data $2067 $1957
Vaya ($52) Unlimited Calls + 3GB Data $2117 $1987
Live Connected ($55) Unlimited Calls + 3GB Data $2189 $2059
Boost Mobile ($40) Unlimited Calls + 3GB Data $1829 $1699

The obvious bits

Thanks to the telcos subsidising the retail cost of the phones, you don't always save money by going the SIM only route. You often get more included value though, especially in the amount of data on offer from month to month.

The not-so obvious bits

One of the big differences between going with a network operator or choosing a smaller virtual telco is whether you get 4G services included in your account. The prices above for Vodafone, Optus and Telstra all include 4G speeds, which the iPhone makes great use of. Of the smaller carriers, only Vaya, Live Connected and Bendigo Bank offer 4G.

You might also miss out on important functionality too, like international roaming. It is certainly worth reading the fine print on these plans before deciding to go the SIM only path.


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