Vodafone shakes up the Aussie market: No more contract phone bundles

There’s no way to sugar coat this – Vodafone have thrown a cat amongst the pigeons and turned the mobile market on its head with a completely new approach to plans, contracts and devices.

Still faced with an uphill battle to gain market share on the dominant Telstra and Optus, Vodafone needed to do something different – and with this approach they will certainly get some attention.

LISTEN: Vodafone’s Ben McIntosh explains the new deals to Trevor Long on Talking Technology – weeknights at 8pm on Talking Lifestyle

Aussies are used to there being two approaches to mobile plans and devices.  You’re on a contract which includes your mobile plan and a phone, or you buy a phone outright and find a plan to suit.

The problem with contract deals are a complete and utter lack of transparency – you get a brand new phone, a certain amount of data and you pay a monthly fee.  On top of the plan rate, you probably also pay a “handset repayment” fee.  That fee doesn’t actually cover the cost of the phone though.  So it’s obvious to us all the cost of the handset is build into that monthly plan.

Alternatively, you find a telco with prepaid or SIM Only plans that suit what you want, and you then use a phone you already own, or you buy one you can afford.

The problem with the latter is most people would struggle to pay up front for a $1000+ smartphone, thus, we’re trapped in the contract phone cycle.

Telstra and Optus are advertising the option to “lease” a phone these days and Vodafone’s Ben McIntosh warns against that “We’re not going down the leasing path, which is the equivalent of paying off someone else’s mortgage and never getting to own the house,” said McIntosh. “We simply think it’s a waste of money and telcos shouldn’t be trying to turn mobile phone plans into something like the Australian property market, where for many ownership is a long-lost dream.

“The aim here is for all costs to be crystal clear, prices to be fair and payment options to suit a range of budgets and lifestyles. When you consider that well over 80 per cent of Aussie mobile users own a smartphone, and the average person holds onto their handset for three years , it’s about time carriers became a lot more flexible.

Vodafone’s radical plan is to only offer SIM Only plans.  Completely and utterly simplifying the entire lineup of plans let alone the marketing for them.

For those looking for a handset, Vodafone will offer them interest free over 12, 24 or 36 months.  Find the price of the phone, divide it by the number of months and that’s the price you’ll pay.

Stick with Vodafone, no contract, month to month SIM Only plan obligation and you’ve got absolute clarity over you payments.

Seen a better deal elsewhere? Well, you’re free to leave – take your number, switch telcos.  What about your brand new phone though?  If you leave Vodafone you pay the remaining amount – no interest, no early break fee – just pay it off and you’re done.

Happy with Vodafone? Ok to commit to 12 months with them?  Good news, the monthly data plan stays the same price but they will double the data for the entire 12 months.

Sick of seeing new and better plans at the same price mid way through a commitment?  No problem, Vodafone will “right” every single customer who contacts them – so you tell them you’ve seen the $50 plan now includes more data – bingo, it’s on your allowance too.

I’m struggling to find a better deal – anywhere.

Now, that’s not to say there won’t be more data available somewhere on the same value, but where else will you get that transparency over your entire bill?

In fact, let’s say you’re like a large portion the country who sign up for a new phone, on a certain plan.    Perhaps the $80 plan, plus the “Handset repayment”.  24 months down the track, your handset payment might stop but the $80 plan remains.  Given we all know that $80 includes the telcos margin for the handset also, they aren’t slipping you back down to a more affordable SIM Only plan are they? No.  Under this new deal with Vodafone after your handset is payed of, that simply drops off your bill – and you’re already on a SIM Only deal.

“Not only have we made our smartphone plans and payments more flexible, we’re proud to announce our new consumer voice, text and data plans, with month-to-month and 12 month options available. They now come with even more data and range from $30 to $100 with six simple price-points,” said Ben McIntosh, Consumer Business Unit Director, Vodafone Australia

Take a moment to compare the inclusions with your telco’s Contract plans and their SIM Only plan, there’s a bit of a difference right?

This will be met by some confusion in the market, but at it’s core its actually the simplest thing you’ll ever wrap your head around – the only real question is how long will it take the other telcos to follow?

Here’s what the new look Vodafone is offering:

SIM Only Plans:

SIM Only 12 Month Commitment Plans:

Month-to-Month Vodafone Red Plans – Paired with a handset
(Choose your handset and divide the cost by 12, 24 or 36 months – add that to these amounts)

There are a range of other plans which sacrifice small amounts of data to add in international calling minutes also available.