Choosing the best mobile contract

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Q. Hi Ryan,

I currently have my mobile phone with Telstra and my 24-month contract has recently finished. My iPhone 3 has started to freeze up and run slower than I am used to, so I’m thinking of ending my contract and starting a new one which includes a brand new iPhone. When looking at the available plans, I noticed some companies are now offering 12-month contracts as well as the traditional 24-month contracts. Can you explain the differences? 

Thanks, Tom.

A. Hello Tom,

The main difference between a 12- and 24-month plan is the duration in which a minimum amount has to be paid over the set period. Generally speaking, the price per month of a 12-month contract will be almost double that of the 24-month contract. At the end of a 12-month plan you’ll own your phone and be free to do what you want with it. You could hand it on to a friend or family, sell the phone and use the money towards your next plan, take out a new plan or even switch over to pre-paid.

The biggest advantage of a 12-month plan is that at the end of it, your phone isn’t out-dated and you can sell it easily on second-hand websites such as eBay or Gumtree. This then allows you to use the money towards upgrading to the latest model outright or by taking out a new contract.

Considering you’re still using an iPhone 3, I will assume that upgrading each year might not be as important to you as it may be to some. In most cases a 24-month plan might be the way to go as you receive the newest phone and pay off the costs over the course of two years with your plan. 

To help you decide on which plan you feel best suits your needs, I’ve compiled a list of plans available for the newest iPhone model, the 16GB iPhone 5s, with the three major telecommunication companies.


12 month contract

24 month contract


See below for information.

$68/month, $550 of calls and text, 500mb data.

Minimum total cost $1632


Not available.

$57/month, 300 mins calls, unlimited text, 500mb data. Minimum total cost $1368


$120/month, unlimited calls, 3gb data.

Minimum total cost $1440

$61/month, $300 of calls and text, 300mb data.

Minimum total cost $1464

Telstra’s “New Phone Feeling” offer allows you to upgrade your phone every year. By paying an extra $10 per month for your phone on a 24-month contract, you can swap it for a new model at the 12-month point. The drawback is that whenever you upgrade your phone, you must take out another 24-month plan and you won’t get to hang on to the old phone, which you are already half way to paying off. You can read more on Telstra’s website.

Disclaimer: All prices were correct as of 7 July 2014. Please refer to the companies for more information and to confirm these details.

Written by ryanbo


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