Outright or plan? Buying a new phone

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Outright or plan? Buying a new phone

Phone contracts are a telco's best friend, but are they the best thing for your business? Anthony Caruana explains.

Phone companies love contracts. They bundle calls with a handset repayment plan and they guarantee that you'll be a customer for a couple of years. At the end of the contract, they'll offer you a new handset and hope to keep you on their books. But is this the best thing for your business?

Another option is to buy your handsets outright and then choose a contract that suits your needs. If a better deal comes along, number portability makes it easy to switch carriers without financial penalty.

The problem is that many handsets aren't cheap. However, if you wait a month or two after a new release, you'll find handsets being discounted for outright purchase. For example, the recently release HTC One XL which has been very popular can be found for under $400 with some online resellers. That's a saving of up to $200 on the original price on release.

Although this means you'll need to put up a few hundred dollars initially, the long term cost, over two years, may be quite a bit cheaper. And the ability to easily change carriers means that you can often extract a better deal.

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