• ETF Enthusiast

Rethinking Buying a Phone: Part II

Every few years or so we are faced with the big decision of replacing our cell phones, thinking back to the phones I have had throughout my life they probably on average have lasted just over 3 years at a time.

My first phone was a trusty Nokia 3310, it lasted ages and would go weeks with only one charge. We only parted ways because it was no longer cool to be a teenager with a phone that slightly resembled a brick (funny as they are on the comeback now). Later it became all about mxit and bbm with my Nokia Xpressmusic and Blackberry Curve, this was the start of the instant messaging generation. My previous phone a Samsung S4 mini was my only phone that lasted less than two years before it became extremely slow beyond use with a cracked screen and battery that was only lasting a few hours.

I am determined to keep my current phone (a Huawei P8 Lite) for as long as possible, and in the mean time I have developed a guide for myself and others when it comes to making that big decision of what hunk of plastic, metal and glass to carry around with them every day:

Step 1: Do I really need a new phone?

“I’m getting an upgrade” are words said far too often. Is your phone really so useless after two years that you need to spend another two years paying off a contract of an even more expensive phone, if the battery is a problem shouldn’t we rather just replace the battery?

Why not rather enjoy being free from a contract and not owing any money, paying only for the data or airtime that you use in the month on your own terms. The point is to question our normal process of getting a new phone every two years because we are so used to having this monthly debit order come off our accounts every month. This is a big commitment and will cost you thousands over your lifetime (an entry level iPhone 7 contract will cost you over R15000 in two years alone – imagine over 30 years), and therefore we have the potential to save thousands in the process that can go to much better use if we are smart about it.

Step 2: Usage analysis

The first thing you need to know is exactly what you are doing in the average month. What are your usage patterns? Are you using airtime, data, or sending sms’s? Most smart phones have the ability to track your data usage throughout the month. If your phone doesn’t offer this then some manual tracking will be needed. The last thing you want is a contract where you are paying for parts of your plan that you will never use.

The mistake that often gets made is that people generally start with the phone first, this means that they will often settle on a contract that may not be ideal for their usage needs. They will end up spending a lot of money on out of bundle rates, topping up certain components like data, and not using other components of their plan like free minutes and sms’s.

This is also a good time to find out if you have a usage problem. I know many people that are using their mobile phone as their primary internet connection. If this is the case you may want to look at other options before you decide what your data usage is. There are mobile wifi devices that you can buy on contract, which have significantly lower prices than your normal prepaid data. See Vodacom’s pricing*1 below:

Step 3: Entry, mid or exit level cellphone

A massive factor in your decision to buy a phone is just what phone are you going to get. You are going to be carrying this thing around with you for at least a few years right. So you feel it better be something you absolutely love, but how long does that new phone feeling last – a week or two at most maybe? No matter what phone we get we will always get used to it and after a while it will become your new daily norm. You need to ask yourself if it really worth paying that extra R5000-R10000 for a slightly better quality camera, a lightning speed operating system and an extra hour or two of battery life. Do you really want an extra 10 grand walking around with you at all times or in the case of the iPhone 7 R13000+? The cost of replacing the screen alone is more than the price of most cellphones. There is some real value for money in mid price point phones in the market where you aren’t paying a premium for a brand and for the best technology available to us at that point in time.

You know that the main purpose for a car is driving you from point A to point B, and you hopefully know that this is the biggest money guzzler you own in your life. Knowing this you don’t go and buy the fanciest car that would cost a fortune to insure, a fortune if it had an accident, and a fortune in monthly repayments. So why not apply the exact same reasoning to buying a phone, we don’t need the jaguar equivalent of the phone world in order to stay connected throughout the day.

Step 4: Service provider comparison

You now need to look at which service provider is offering you the best package that suites your usage needs and in the range of cellphones that you are looking for. There is no use determining exactly what you need if at this stage you are enticed by the hundreds of deals and specials that the big network provider company’s offer. They are all competing against each other to own a slice of your soul for the next 2 years.

Deals and specials can definitely be your friend but be sure to look in a similar range to what you were originally looking for. Once a phone has been on the market for over a year and the manufacturer is soon bringing out a new model to replace this phone, service providers will throw deals and specials at this phone to get rid of the stock they still have before no one is interested in that phone anymore. This is a good time to get a really good contract with a decent phone whose only sin was being around for over a year.

Step 5: Is prepaid a better option for you?

Contract is not always the only way to go, you need to make sure that a contract suits your unique personal situation. Are you definitely going to be in the country for the next two years?

I know people who have bought next to perfect condition iPhones for half the price because people need to get rid of them when the next model comes out. In a case like this they can save lots of money over the two years.

The newer the phone is the more service providers will make you pay on the phone repayment part of your contract and that is when you should maybe start considering contract alternatives – but for the most part a contract is cheaper on a new phone because the company wants to keep hold of you for at least two years. They want to make even more money on you with those ridiculous out of bundle data charges, and they want to make it difficult for you to go to one of their competitors.

*1 Pricing as at 6 Feb 2017

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