SOUTH AFRICANS BEING TEMPTED TO TAKE A 36 MONTH CONTRACT, JUST TO MAKE THEIR NEW PHONE MORE AFFORDABLE

March 09, 2016

Did the new Samsung Galaxy S7 or iPhone 6S deal look too good to be true? Well, it probably was. If you look carefully, you’ll notice that the new phone comes with a 36 month contract, rather than the regular 24 month contract. Unfortunately, this is a new and deliberate tactic in the cellular operators’ marketing toolbox. They’re trying to sell consumers affordable contracts with fancy new phones by changing the duration of the cell phone contract.

It’s a cheap trick to sell “cheap” contracts. The reality is that cell phone providers are very much aware that consumers choose their contracts based on the phone they’d like to have, rather than on what type of contract is suitable for them. This gives the cell phone providers the perfect platform to tempt customers into long-term contracts while distracting them with the pretext of a new, flashy phone at a “great rate”.

“But what could happen in 36 months”, you may ask yourself? Well we’re currently living in a fast-changing cellular market. With the addition of new cellular providers, increased competition among providers, and regulators clamping down, cell phone rates are developing in favour of the consumers. Consumers should expect to see their cell-phone rates dropping quite significantly in the near-to-medium term. A three year contract would only serve to disfavour the consumer who would be paying the same rates in three years’ time when the market would have shifted (in favour of the consumer) quite substantially. And this fast pace of change is being seen in the hardware space as well, and with new phones being produced every day, your fancy new iPhone 6S will be as obsolete as a Nokia 6210 by the time your 36 month contract (finally) expires.

Unfortunately, there is an education gap in the market, where cell phone providers are failing to guide consumers correctly, when choosing their new cell phone contracts. Providers should be telling consumers that their decision of what type of contract to choose should be completely separate to what phone they’d like to have next. They should buy the best contract for them, first, based on their lifestyle and needs and, only then, choose a phone.

So when you’re looking for a new contract, don’t take it for granted that it will last for 24-months. Keep an eye out for the contract duration and think twice before you find yourself stuck in a very long contract, with the same phone and call rates, for a very long time.

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