Telstra recently introduced a new add-on customers buying a device on a plan: Upgrade & Protect. The service is ostensibly a mix between phone insurance and an early upgrade path. If you break your device, you can upgrade to another. For a fee. But is it a good deal?
What is Telstra Upgrade & Protect?
Upgrade & Protect is a $15 per month add-on that lets you return your phone or tablet to Telstra and upgrade at any time, regardless of the condition it's in. All further handset repayments are waived, but you'll need to immediately commit to buying a new device on a 24-month term. Depending on how long you've had your phone and the condition it's in, you may need to pay a fee.
If you've had your phone for more than 12 months but less than 24, you can upgrade to a new device for free, provided it is in good working order. This means your phone has to function as intended and be free from physical damage, other than light wear and tear. You will still have to return your old phone to Telstra, no matter how long you've had it for.
If you've had your phone for less than 12 months, you can upgrade to a new device for $99, provided it is in good working order. You'll need to return your old phone to Telstra.
If your phone is damaged - has a cracked screen, for example - you can pay a $249 fee to upgrade to a new device. You'll still need to return your old phone to Telstra. You can make two "damaged device upgrades" per service, every 12 months.
Is Upgrade & Protect a good deal if I want to upgrade my phone early?
If you're someone who always needs to have the latest device, you might be wondering if Upgrade & Protect makes sense. After all, $15 per month sure isn't cheap. There's no simple answer to this; it largely depends on the device in question and how long you've had it.
Upgrade & Protect theoretically makes more sense when it comes to expensive devices. For example, if you purchased a Galaxy S20 Ultra - valued at $1,999 - when it first came out and wanted to upgrade to next year's Samsung phone, you could essentially consider Upgrade & Protect as a way to have a guaranteed buyer. You end up paying $180 over the course of a year to ensure Telstra buys your S20 Ultra from you.
Of course, the sale price is only your remaining handset repayments. If you were selling after exactly 12 months, Telstra is ostensibly waiving $1,000 of handset repayment fees. $820 after the Upgrade & Protect fee. As such, the question becomes do you think you could sell it for more if you do so yourself? After all, you're not locked into your Telstra plan - you can leave whenever by paying out your remaining handset repayments.
Samsung devices don't tend to hold their value as well as iPhones on the second hand market, but it's still possible to get a decent price. A cursory glance at eBay shows second-hand Note 10+ devices selling for between $800 and $1,000. The Note 10+ originally launched at $1,699, and is almost exactly a year old now.
While it's hard to tell exactly how much an S20 Ultra will sell for in February next year, if you think you could sell yours for more than $820, Upgrade & Protect is a bad deal.
And of course, the longer you wait to upgrade, the worse value Upgrade & Protect represents. If you're 18 months into a contract, don't upgrade. At that point, Telstra is only waiving fees for a quarter of your phone's value. If you really need a new phone early, just break your contract and pay out the remaining repayment fees.
When it comes to cheaper devices, such as an iPhone SE, the $15 per month fee becomes a much larger imposition. If you were upgrading after 12 months, you'd only have about $375 in handset repayment fees left. After you factor in the $180 in Upgrade & Protect fees, Telstra is effectively only buying out for phone for $195 or so. You could easily sell a one-year-old iPhone SE for more than $200.
The cheaper the phone, the worst value Upgrade & Protect becomes.
If you're interested in upgrading before 12 months, you then need to factor in the $99 upgrade fee. In theory, the earlier you upgrade, the less Telstra's cut is. Upgrade one month in? Telstra only takes $114 out of its effective sale price. Again, this is a balancing act. You always want to ensure you couldn't simply just sell your phone for more by breaking your contract. For example, upgrading at 11 months would be an awful idea; Telstra's cut is $264. If you don't upgrade within your first five months, Telstra's cut becomes larger than if you'd simply wait to an entire year.
If you're religiously buying the most expensive phone on the market and upgrade to the latest model at the 12-month mark, Upgrade & Protect could take some of the headache out of having to sell your old phone yourself. You may lose out on a few hundred dollars in sale value, but the only thing you'll need to worry about is returning the phone to Telstra. If that's not you, Upgrade & Protect is poor value when it comes to upgrading.
Is Upgrade & Protect a good deal if I break my phone?
Of course, it's worth considering that Upgrade & Protect also serves as somewhat of an insurance policy. If you break your phone, you can simply pay an "excess" of $249. Telstra won't repair your phone, instead, you'll be asked to sign up to a new plan, with a new phone, for another 24 months.
As with simply upgrading, the of Upgrade & Protect directly relates to how long you've had your phone. Once again, think of it as Telstra buying out the remainder of your phone; you're just getting less in exchange because it's damaged.
For example, if you've only had your iPhone 11 Pro for a month and you shatter it screen, $264 (the upgrade fee and one $15 add-on) isn't an awful price to just get a new device. For comparison, AppleCare+ (Apple's phone insurance) would cost you $269 upfront, and then a further $45 for a screen repair. But if you've had your iPhone 11 Pro for over a year, an Upgrade & Protect replacement will cost you at least $429. And you need to commit to buying a new phone.
The longer you wait to break your phone, the worse value Upgrade & Protect becomes. Sure, we all purchase insurance in the hope that we don't need it, but an insurance policy doesn't require you to then commit to buying a new phone after you've paid your excess. While some may think a newer model is better than a replacement, we'd say Upgrade & Protect favours Telstra more than the consumer in most cases.
And once again, it is worth being aware that Upgrade & Protect favours pricier devices. While Samsung may charge you $399 for a Galaxy S20 Ultra screen repair, that drops to $275 for a Galaxy A51. AppleCare+ pricing also changes depending on the phone; it will set you back $199 for an iPhone 11 or $269 for an iPhone 11 Pro. On the other hand, Upgrade & Protect is a flat fee, no matter the value of your device.
Unless you break your phone very early on, Upgrade & Protect is worse value than paying for AppleCare+ with an iPhone or simply paying Samsung for a screen replacement.
Can I add on Upgrade & Protect after buying my phone?
Upgrade & Protect can only be added on when buying a new phone or tablet. You can't add Upgrade & Protect to an existing plan. You can, however, cancel Upgrade & Protect at any time.
Alex Choros
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