Optus opens up Australian phone leasing with My Plan Flex
Score a new phone every year, but never own the actual handset in return for a price cut.
Leasing as a business concept is nothing new, but it’s not terribly common in the consumer mobile phone market, with only Telstra opening up leasing via its Go Mobile Swap plans. Optus has announced that it’s entering the phone leasing market for both consumer and business customers via its My Plan Flex plans.
Under the contract terms of My Plan Flex, you sign up for a 24 month contract term, but after 12 months, you’ve got the option to upgrade to a new handset for a fixed $99 service fee. That presumes that your phone is in fine working order when it comes time to upgrade. If there is damage present with what Optus calls an "easy fix" to hand, such as a cracked screen, a damage fee of up to $229 will apply. If the damage is more serious by Optus’ assessment, damage fees of up to $499 will apply in order to upgrade.
Either way, it’s a leased phone, which means that at the end of the 24 month contract it’s still technically Optus’ property. Customers will have the option at the end of the contract plan term to purchase the device at fair market value. You can alternatively opt to continue to lease the phone for a further six months, at which point you must either buy it outright or return it.
Optus is only offering four different phone models under the My Plan Flex provisions at launch, in the form of the iPhone 7, iPhone 7 Plus, Samsung Galaxy S8 or Samsung Galaxy S8+. This does include the PRODUCT(RED) variant of the iPhone 7 which Optus has recently added to its contract handset mix.
The typical monthly contract saving on the My Plan Flex plans is $10 per month over the total contract cost, although for some plan tiers that dips downwards. As an example, here’s what you’d pay for a 32GB iPhone 7 via the regular My Plan Plus and the My Plan Flex contract tiers at the time of writing.
|Optus Plan comparison|
|iPhone 7 32GB||My Plan Plus Monthly||My Plan Flex Monthly||Saving||24 Month contract difference|
Clearly there’s not much value in leasing a cheaper phone at higher contract tiers, but what happens if you supersize the phone? Here’s how the contract tiers work out for a 256GB iPhone 7 Plus:
|Optus Plan comparison|
|iPhone 7 Plus 256GB||My Plan Plus Monthly||My Plan Flex Monthly||Saving||24 Month contract difference|
The practical upshot is that the maximum saving you can make on one of Optus’ lease plans is $240 over the life of the contract, and possibly less depending on your handset choices. Depending on your financial affairs there may be other tax advantages to leasing, but you’d be well advised to check with your accountant for tax related matters.
It's also worth noting that the $99 swap fee is identical to the existing fee that you'd pay if you made use of Optus' New Phone Trade Up deal on a My Plan Plus contract, presuming there was no damage to your existing handset.