The low-down on smartphone deals

SMART PHONE PLAN: Choosing from the bewildering array of minutes, texts and data packs is more complicated than it used to be.
SMART PHONE PLAN: Choosing from the bewildering array of minutes, texts and data packs is more complicated than it used to be.

Few things sound more tempting than a free iPhone.

The latest iPhone 4S starts at $1049 but phone companies Telecom and Vodafone are offering it for little or no upfront cost - if you sign up to a two-year contract.

But choosing from the bewildering array of minutes, texts and data packs is more complicated than it used to be.

''It's really all about the data,'' - the 3G mobile internet access that smartphones are made for, Telecommunications Users Association chief Paul Brislen says.

How much data is enough is difficult to work out for a new or inexperienced smartphone user who might be unfamiliar with tweeting or downloading maps.

Consumer NZ technology writer Hadyn Green reviewed Telecom's and Vodafone's standard monthly offerings and found Telecom's offered much more data (up to 3GB) while Vodafone's offered many more texts (2500) and more voice minutes.

That might sound like a ridiculous number of texts, but some people use it, says Brislen.

''Telecom is really making a big push with its marketing around being a smartphone network, so its data plans ... start at 500MB (Vodafone's start at 250MB) and they are low on text,'' says Brislen.

''Vodafone users have traditionally always used a lot more texts.''

For a new iPhone on a two-year contract with Telecom the total cost is at least $1609 for the cheapest contract and $4080 for the most expensive - more if you travel overseas or use more than the allowed minutes, texts and data. The cheapest two-year contract through Vodafone adds up to $2029, after the company reduced the iPhone 4S subsidy on its two cheapest plans by $300 overnight.

Paying nothing upfront does not mean the phone is free - it will be paid off over the life of the contract, says Brislen.

Until then you might be obliged to turn a blind eye to newer, fancier phones and better contract deals. ''All too often people sign up for a deal and then in a year's time in they say, 'Great I'll take the new iPhone,' and of course they haven't paid off the old one yet,'' says Brislen.

''Don't sign up for a two-year deal unless you know what you're getting into.''Brislen has just arranged a two-year contract for a staff member who desperately wanted an iPhone and could not pay upfront. ''If she was happy to sign up for two years, and she got enough of a discount, it worked,'' he said.

But Green says neither of the big telcos offers the quite right mix of usage for someone like him, who texts a lot and also uses a lot of data. ''There seems to be no mid-way where you can turn the minutes down and your texts or data up,'' he says.


After reviewing Vodafone's text-heavy and Telecom's data-heavy plans Green decided it was more useful to even them up by adding data and text boosts.

Vodafone users can boost data by 1GB a month for $20 a month and Telecom users can boost texts to a total of 2500 for $10 a month.

Applied to the mid-range $80-$85 plans, you can see the difference.

A standard $85 a month package from Vodafone with a 16GB iPhone 4S includes 300 minutes, 2500 texts, and 250MB of data at a total cost of $2189 over two years.

A similar-priced package from Telecom includes the same phone and 200 minutes, 300 texts, and 1GB of data at a total cost of $2069 over two years.

Add the data boost and the Vodafone plan shoots up to 1250MB of data for $105 a month ($2669 over two years including the phone and a free 1GB boost for the first six months).

Add the text boost and the Telecom plan gives you 2500 texts for $90 a month ($2309 over two years including the phone).

All that is complex enough. But there are other options outside the big two, including newcomer 2 Degrees. It does not sell iPhones but, like Vodafone and Telecom, it offers discounts on the Samsung Galaxy SII, a high end smartphone that uses the Apple-rival, Android operating system. This does as many whizz bang do- everything-but-talk-for-you things as its rival.

Someone signing up for an $89 monthly contract would get the phone, 460 minutes, 2500 texts and 250 MB of data monthly for a total of $3015 over two years.

The same phone on Vodafone's $85 plan would be $2639 with fewer minutes.

On Telecom's $80 plan it would be $2519 with more data and fewer texts and minutes. And of course you can take your own iPhone and sign up with 2 Degrees. Shorter, one-year terms at all three companies will still earn you a smaller phone discount, too.

For those whose heads hurt already, Green says Consumer NZ has come up with an online calculator,, that will calculate the cheapest plan for the number and time of calls, texts and web use you expect.

He says 2 Degrees tends to be cheaper for calling and texting than the big players but with smaller data caps. ''You will probably end up in same position you are with Vodafone (where you might need to add data),'' he says.

The newcomer might suit talkers and texters who want to taste-test a smartphone with a small data cap, says Brislen.

Then there are the data lumps. 2 Degrees customers can purchase pre-paid data starting at $20 for 1GB and lasting between one and six months. But its data can only be used in the 2 Degrees mobile broadband zone - generally inside the main centres. Outside those areas customers have to buy additional roaming data packs.

Brislen is a talker - he spends 600 or 700 minutes on the phone each month - so he has a voice-heavy contract for his smartphone that he recently moved from 2 Degrees to Vodafone. He wanted better reception from a Vodafone signal-booster because he happens to live in a coverage blackspot.

But for his iPad he buys 12GB of data from 2 Degrees for $150 every six months.

''The trick is to know what it is that you do and what you want to do before you go into the exercise,'' he says.


Which brings us back to estimating data.

Green is disappointed that the two biggest telcos did not offer bigger or unlimited data caps. Not because people necessarily need 3GB or more but because people tend to make better use of their smartphones when they are not worried about running out of data.

With bigger, cheaper caps people could freely indulge in such data-sucking activities as checking maps, downloading applications and music, taking and sending more photos and sending more email - the kinds of activities that justify buying a $1000 smartphone, he says.

Brislen says that, in fact, many people overestimate how much data they will use. There are no official figures for New Zealand, but experience overseas suggests the average user will get through about 250MB a month, he says.

Brislen uses slightly more than that. He works from home, downloads music regularly and is a prolific tweeter but he rarely reaches a third of his 3GB data cap.

His iPhone automatically connects to the internet through a wifi connection whenever one is available - at his home office and in hotels and cafes - and saves his data allowance for when he is on the road.

His iPad uses more data because he often uses it away from wifi, he says.

A survey from the United States researchers Nielsen found Americans used more data as smartphones spread and the cost per MB fell. In the first quarter of 2011, the average Android user went through 582MB a month and the average iPhone user 492MB.

Overall, the average smartphone user sucked 435MB up from 230MB a year earlier. Green agrees the typical New Zealand user would need less than that - more like 250MB or possibly 500MB.

But he warns that it is best to keep track. Some functions that appear to be built into the smartphone - such as the iPhone's in-built helper Siri - actually use up 3G data.

''A lot of these phones use data without you really knowing,'' says Green.

Even the experts get caught.

Brislen - a former head of communications at Vodafone - once received an $1800 bill for a 48-hour period visiting Australia. He was emailing a few photos and tweeting, ''nothing big or heavy'', he says.

While he says roaming costs have fallen sharply since then (from about $20 MB to about $1 or $2 a MB) they remain hundreds of times the price of using data in New Zealand - something the Ministry of Economic Development is trying to remedy along with its Australian counterpart.

In his case: ''I literally could have flown home to Auckland each night and hand-delivered the photographs (more cheaply).'' But, as they say, there's an app for that. These days Brislen has an application installed on his iPhone that tells him exactly how much data he is using each month. 

As of last week, six days before his monthly allowance was up? 285MB.

The upshot?

The best plan for you - and whether you are willing to lock it in - depends on figuring out if you're a texter, tweeter, talker, constant email updater, gamer, muso or all of those.

For my money, I'm going to back myself to make the most of 3G with a 1GB, $80 Telecom plan. No boosts required - who needs to talk and text when there is 1GB of tweeting and Facebook?