Buying-A-Phone-Retailer-vs-Telco

A few years ago, Malaysia’s telco giants began selling phones right from their centres, contract-bound, and they never looked back. Now, as consumers, we’re spoilt for choice when it comes to places to buy our phones.

We have telcos (Maxis, DiGi, Celcom and uMobile), authorised resellers (shops that don’t carry the brand names of Apple, Samsung, Oppo, or other brands, but are allowed to sell their products), and third-party sellers like those you can find in Lowyat. But does from whom your phone was purchased make a difference?

Buying from a Telco

Buying from telcos is a pretty normal thing in America, although it has just recently caught on here. They’re called contract phones because they come with a contract, usually for one or two years, which binds you to the telco for the duration of that period.

The Benefits

1. Smaller up-front payment

If you want an expensive phone whose full price you can’t cough up easily, buying it from a telco allows you to pay for it in the form of a monthly fee. It facilitates financial planning, eases the burden on your budget, and allows you to own your dream device – sometimes even for free!

2. Bonuses

The contract phone usually comes bundled with data packages and calls and SMS allocations to sweeten the deal. It’s a good thing, too, since you need all three. Imagine paying just a bit more than your currently monthly commitment and getting a new phone in the process – isn’t that great?

The Disadvantages

1. You’re stuck with your telco

Or at least, you are until your contract expires. There’ll be no changing from one telco’s phone plan to another until your time is up! The only way to do that is to pay a termination fee and you lose any advance payment you’ve made as well (except with uMobile). Celcom, for example, charges a RM500 early termination fee.

2. You’re stuck with your phone

It’s not just your telco you’re stuck with. If you sign a phone-specific contract, you’re basically stuck with your phone until the contract is up. Of course, you can always let the phone gather dust, but that defeats the point of getting the phone in the first place.

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Buying from a Retailer

Whether it’s from glass-cased stalls, authorised resellers, or shops carrying the brand names of the devices they sell, this was the usual way people got their new phones before telcos started bundling their offerings. But just because it appeared first doesn’t mean that it’s out-dated!

The Benefits

1. You get to shop around

Official stores aside, retailers compete with each other to do business with you, and the one factor they can easily manipulate is price. With the model and specifications of your phone already set no matter where you buy it, you’re free to shop around for the cheapest or most advantageous option around.

2. You can change phones whenever you like

If you’ve used the phone for a few months and decided that it doesn’t live up to the hype, all you need to do is purchase a new phone or trade in your current one so you’re not saddled with a redundant phone.

The Disadvantages

1. You have to come up with a lump sum

You won’t have the option to pay for your phone in monthly instalments if you decide to buy it from a retailer. Be prepared to pay the full cost of your phone when you ring it up at the counter! To lessen the burn in your pocket, consider budgeting for it months beforehand so that you have the sum all saved up before you buy the phone.

2. It might cost you more

One benefit of contract phones is that they usually come with data, phone calls and SMS allocations, so if your monthly usage is less than that, you won’t need to pay more than your monthly commitment. Telcos also offer the phones at sharply discounted prices in order to entice you to sign a contract with them. With a retailer-bought phone, though, it’s the full cost of the phone for you, plus monthly payments for your phone usage.

Conclusion

Both options have their pros and cons, so it’s up to you to decide where you’d like to buy your phone. Do you want the freedom to choose or the financial convenience of paying in instalments? It’s your choice to make!

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