How to get the cheapest iPhone plan without handset repayments

Alex Kidman 23 June 2016


Want an iPhone on contract without extra handset repayments? It can be done, but choose carefully with older iPhone models.

You’ve always got the option to buy an iPhone outright and go on either a month-to-month or prepaid plan, but that requires a significant upfront spend on the iPhone handset, which can often equate to $1,000 or more. This is why so many Australians who want iPhones buy them on a contract with a carrier instead, typically over 24 months. On that kind of contract, you'll pay a monthly total which includes both the charge for the plan and a handset fee.

Some carriers don't show the costs separately, but our mobile phone finder will always show you the split price for any handset, as well as the total cost.

Apple’s iPhone remains the most popular smartphone in Australia and this has enabled Apple to continue to charge a premium price for its phones. Indeed, it has been able to arrange deals with carriers that still include handset repayments on almost every plan, which something that no other phone series, including Samsung’s very popular Samsung Galaxy S7, does.

So is it possible to find a mobile phone contract for an iPhone that doesn’t include a separate handset repayment? Can you sign up for a contract where the iPhone is essentially thrown in for free and you're just paying for calls, data and texts?

The answer is yes, but you'll have to make some compromises. If you are looking to avoid handset repayments as part of a contract, you’ll almost always have to settle for the 16GB variant of your chosen iPhone model. That brings its own storage challenges if you want to store a lot of photos, music or video on the device. You'll also have to be content with an older iPhone model.

Below we've rounded up all the currently available Australian iPhone plans (as of June 2016) that don't include an extra handset repayment. Every single plan on this list includes unlimited national calls and texts, so the main features that differentiate them are the included data and which network they run on.

iPhone 5S

The budget option: iPhone 5s

The oldest current iPhone in Apple’s lineup is still offered by the major carriers, and it’s far and away the lowest cost way to score an iPhone on contract with no additional repayments required. That being said, even for a phone that's as old as the iPhone 5s, there's a difference between lowest cost and "inexpensive", especially depending on your choice of carrier. Here's how the big four players compare.

PlanDeviceMonthly CostDataMinimum 24 month cost
Telstra Go Mobile SiPhone 5s 16GB$551GB$1,320
Optus My Plan Plus $40iPhone 5s 16GB$401GB$960
Vodafone Red $60iPhone 5s 16GB$603GB$1,440
Virgin Mobile $40 ContractiPhone 5s 16GB$40500MB$960

There’s an obvious catch with getting an iPhone 5s at this stage in the iPhone life cycle. We’re just a couple of months away from what’s being assumed will be the iPhone 7 and a new version of iOS, and that’s the point at which the iPhone 5s is likely to lose access to future iOS upgrades. Within the span of a two year contract that will almost definitely be the case. That doesn't mean the phone won't work, but your access to new apps is likely to become patchy.

Into the mid-range: iPhone SE

Apple doesn’t officially call the iPhone SE the "cheap" iPhone, but that’s effectively what it is relative to the outright price of other current iPhone models. You pay less for it upfront, and that means it’s also a more attractive prospect for carriers to offer at lower contract tiers, at least in theory.

In practice, there’s wide variation between the major carriers as to which price point the iPhone SE is offered with no additional handset repayments, as you can see below.

PlanDeviceMonthly CostDataMinimum 24 month cost
Telstra Go Mobile LiPhone SE 16GB$956GB$2,280
Optus My Plan Plus $60iPhone SE 16GB$606GB$1,440
Vodafone Red $70iPhone SE 16GB$707GB$1,584
Virgin Mobile $80 ContractiPhone SE 64GB$8010GB$1,920

It’s interesting to note that Virgin Mobile’s pricing isn’t the cheapest, but at the $80 tier it doesn’t differentiate between the 16GB and 64GB iPhone SE models, making the bigger model an attractive proposition. In many ways the SE sits in the sweetest spot if you want an iPhone without handset repayments being part of the contract, because you won't pay that much more than for a 5s over the same timeframe, but you're looking at a 2016 handset that should last the course of a two year contract easily.

Into the mid-range: iPhone 6/iPhone 6 Plus

You might think that an iPhone model that’s rapidly approaching two years of age would be easy to score relatively cheaply on contract.

You’d be wrong. The iPhone 6 and iPhone 6 Plus have maintained relatively high contract prices despite being supplanted by the iPhone 6s and 6s Plus respectively, and as such if they’re what you want, you’ve got to choose a more expensive plan to score one that doesn't also include handset payments.

PlanDeviceMonthly CostDataMinimum 24 month cost
Telstra Go Mobile XLiPhone 6 16GB$13515GB$3,240
Optus My Plan Plus $80iPhone 6 16GB$806GB$1,920
Vodafone Red $100iPhone 6 16GB$10011GB$2,400
Virgin Mobile $80 ContractiPhone 6 16GB$8010GB$1,920

That’s quite a lot of cash to lay down for an older phone. It's also worth noting that devices released at the same time as the iPhone 6/Plus’ can generally be had with no handset repayments at much cheaper price tiers. This includes devices such as the Galaxy S6 (which came out some six months after the iPhone 6) or the even newer Google Nexus 6P.

It’s not any better for the iPhone 6 Plus, either; Telstra doesn’t have an offering with a "free" iPhone 6 Plus at all, and other carriers start at the $100/month price tier.

PlanDeviceMonthly CostDataMinimum 24 month cost
Optus My Plan Plus $100iPhone 6 Plus 16GB$10015GB$2,400
Vodafone Red $130iPhone 6 Plus 16GB$13011GB$3,120
Virgin Mobile $100 ContractiPhone 6 Plus 16GB$10014GB$2,400

Like the iPhone 5s, the iPhone 6 and 6 Plus aren’t new devices. We expect the iPhone 6 range to become Apple’s "budget" iPhone range when the iPhone 7 rolls around, presuming Apple doesn't drop it altogether in favour of the iPhone SE.

Staying current: iPhone 6s/6s Plus

While there’s something to be said for waiting to get an iPhone on contract until the next model is released – expected to be around September/October this year – getting the most current model ensures you'll not feel too outdated by the end of the contract.

If you don’t want to include handset repayments, however, you’re looking at the stiffer end of the pricing matrix for both the iPhone 6S and the iPhone 6S Plus.

PlanDeviceMonthly CostDataMinimum 24 month cost
Telstra Go Mobile PremiumiPhone 6s 16$19515GB$4,680
Optus My Plan Plus $100iPhone 6s 16$10015GB$2,400
Vodafone Red $130iPhone 6s 64$13011GB$3,120
Virgin Mobile $100 ContractiPhone 6s 16$10014GB$2,400

iPhone 6s plan pricing, while on the more expensive side of the spectrum, really highlights how the older iPhone 6 makes particularly poor sense on contract. In many cases, you're paying similar money for a much older product if you opt for the iPhone 6 at this point in time.

Predictably, to score the iPhone 6s Plus with no handset repayments, you've got to jump up the pricing tiers and down the storage tiers, especially in the case of Telstra, although you'll end up with a plan that really does have all the bells and whistles included.

PlanDeviceMonthly CostDataMinimum 24 month cost
Telstra Go Mobile PremiumiPhone 6s Plus 16$19525GB$4,680
Optus My Plan Plus $100iPhone 6s Plus 16$10015GB$2,400
Vodafone Red $130iPhone 6s Plus 16$13015GB$3,120
Virgin Mobile $130 ContractiPhone 6s Plus 64$10022GB$2,400

Why do handset repayments matter?

You can always opt for a lower-tier plan with handset repayments built in; at the time of writing the lowest cost you could score an iPhone 6s 16GB for is $61 per month through Virgin Mobile, but that’s for a plan with a relatively meagre 300MB of data usage per month. That’s not going to suit too many iPhone users, and a pricier plan is likely to be better value overall.

Fundamentally, as with any phone contract, it's a tradeoff between the handset repayment price you pay, and the inclusions you get with that particular contract tier. The lure of a "free" phone means that you're essentially spending that money on a larger package of provided services, primarily through expanded data allowances, but also potentially through extras such as free international calls or bundled entertainment packages.

The real contrast point for iPhone handset repayments, however, is against pretty much any other Android phone. There’s nothing at all in the Android space offered by a major carrier that isn’t automatically a "free" phone at the highest tier for every carrier, and most are available at sub-$100 plan price points with no additional payment either, which means you score the best of both worlds.

Image: Shutterstock

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