iPhone 7: Contract or SIM-only?


The release of the new iPhone 7 has once again got Australians thinking about their phone plans. But before you get carried away and sign up to an expensive two-year contract just to get your hands on it as quickly as possible, take some time to consider how you might find the best value deal. It could mean not signing a contact at all, but it could also require a little patience. Do good things come to those who wait? Let’s find out.

We’ve been crunching the numbers behind the iPhone fanfare to work out whether you’re better off with a two-year handset contract, or just a good SIM-only deal, be it postpaid or prepaid. Sure, going SIM-only with the new iPhone means you’ll have to pay for the phone outright, but doing so could mean you get superior value for your money in the long run. Choosing the SIM-only, no-contract path also gives you the flexibility of switching service providers whenever you like, so you can chase the best, most data-packed deals around. Let’s kick this comparison off, looking at the iPhone 7 (32GB).

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Handset plans

If you’re not able to pay for the iPhone 7 outright, and don’t have the patience to save up the $1,079 you need to buy it, then a contract plan will be for you. Just make sure you find the best value one you can!

The big Aussie telcos, Telstra, Optus, Vodafone and Virgin Mobile, are all offering the iPhone 7 on two-year plans, although their features vary considerably, as do costs.

To do this, we’ll need to determine what sort of plan inclusions we’ll want for the new phone. Let’s set the bar at a minimum of unlimited local talk and text, plus a healthy 7GB of data. If we can get a bit more data, international minutes, or entertainment features as well, then it’s a bonus. Here’s what these four carriers currently offer with the new iPhone 7.

Provider Contract period Plan name Monthly Cost Data allowance Cost over 24 months
Optus 24 months $85 My Plan Plus $87 7GB $2,088
Virgin Mobile 24 months $87 Plan $87 7GB $2,088
Vodafone 24 months $80 Red Plan $92 9GB $2,208
Telstra 24 months L Plan $99 10GB $2,376

As you can see, Optus and Virgin Mobile match our plan demands at a reasonable monthly cost. Vodafone and Telstra don’t offer contact plans with 7GB of data, so we’ve gone with the closest alternative above that allowance. This naturally means more expensive plans, but the trade-off is you get more data.

All in all, there isn’t much difference between them. It’s worth noting, however, that the offerings from Optus, Virgin Mobile and Telstra come with other features that may appeal. The Optus and Virgin plans come with a modest amount of international call time, plus data-free music streaming with selected services. Meanwhile Telstra brings unlimited calls to selected countries and a three-month subscription to Netflix, Stan or Presto.

SIM-only plans

If you’re not convinced about the value for money on offer from these contract plans, then it’s time to start saving up your cash and searching for the best SIM-only deal you can find. There are more than 30 service providers queuing up to offer you a great deal. The big carriers will also have SIM-only options to choose from, but these will largely reflect the same value as their contract plans.

Again, we are setting the minimum plan features at unlimited local talk and text, plus at least 7GB of data. Some SIM plans come on 12 month contracts, but we’re only comparing no contract postpaid or prepaid offers because we also want the flexibility of switching providers whenever we want. We are also only comparing plans that give us 4G coverage.

Here are the cheapest plans you’ll find that meet our plan demands, and what they will cost you over two years, including the initial cost of purchasing the iPhone 7 ($1,079).

Provider Contract period Plan name Monthly or recharge cost Data allowance Cost over 24 months
TPG 1 month T4G-2 $34.99 7GB $1,918.76
Jeenee Mobile 1 month $35 Pennywise $35 8GB $1,919
OVO Prepaid 30 days $34.95 Plan $34.95 8GB $1,929.45
ALDI Mobile Prepaid 30 days XL Value Pack $35 6GB $1,930.67
Vaya 1 month Unlimited XL $36 8GB $1,943
Kogan Mobile Prepaid 30 days Large Plan $36.90 8GB $1,976.90
Lebara Prepaid 30 days Mega Plan $39.90 7GB $2,049.90
Amaysim Prepaid 28 days Unlimited 7G $39.90 7GB $2,119.25
Coles Prepaid 28 days Coles Prepaid $40 7GB $2,121.86
Woolworths Mobile Prepaid 30 days $45 Recharge $45 8GB $2,174
SpinTel 1 month L Plan $46 8GB $2,183

When it comes to SIM-only plans, additional features are limited. However, five of these plans come with some international call minutes, most notably the Amaysim Unlimited 7GB deal which boasts unlimited international calls to 10 selected countries.

So, where’s the best deal?

As the tables above illustrate, there isn’t a huge difference in costs over two years, whether you go with a handset contract or a SIM-only deal, after buying the new iPhone outright. However, seven of the SIM-only plans we’ve compared come in under the cost of the cheapest contract offers. The cheapest of the SIM-only deals from TPG and Jeenee Mobile will cost you around $170 less than the Optus and Virgin Mobile plans over two-years. That’s a pretty good saving when you’re getting the same basic plan inclusions. It also means your monthly costs are much less once you have splashed out to buy the new phone.

Going SIM-only also gives you the advantage of switching providers whenever you want. The mobile market is hugely competitive at the moment, so it’s likely we’ll see even better value plans appear in the coming months. Being locked into a two-year plan means you’ll miss the opportunity to switch for increased value.

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