Contract vs Buying a Phone Outright
A “free phone” can be paid for through monthly charges. Enter the same handset and equivalent service in both paths, over the same term. Include device instalments in the contract monthly total.
Worked example
The hypothetical example has three months at R399, then twenty-one months at R499, plus R99 upfront: R1,197 + R10,479 + R99 = R11,775. Buying a R6,000 handset and spending R150 monthly for twenty-four months totals R9,600. The R2,175 difference is meaningful only if the device and usable service are equivalent.
Before accepting a quote, ask whether the normal price includes the handset, when the introductory price ends and whether the provider will change charges during the term. Keep the written quote with your comparison. A promotion lasting three months must not be multiplied across the entire contract.
What the total includes
Contract total = introductory monthly total × introductory months + normal monthly total × remaining months + fixed costs. Outright path = handset price + prepaid monthly spend × the same term + fixed costs. Amounts round to cents before multiplication.
Include delivery, setup, device settlement, insurance and any other known fixed charge in the appropriate input. Variable usage, future price changes, interest on financing the outright phone, repair costs, resale value and the opportunity cost of paying upfront are not modelled. A cheaper total does not show whether you can afford the initial purchase. Do not enter a short-validity bundle’s single price as a whole month’s equivalent service.
Read the prepaid versus contract guide or compare retention with switching.
Method checked 12 October 2026. Form inputs stay in this page; they are not sent to DataCost. More tools and practical guides.