Mobile phone price war: Optus to cut costs and contracts in pre-Christmas customer battle

Experts have warned to shop around for a smartphone this Christmas as Optus prepares to cut prices and contracts, and other telco rivals could follow.

Exclusive: The battle for smartphone buyers will intensify tomorrow when one of Australia’s largest carriers launches a new range of cut-price, build-it-yourself, month-to-month plans to lure new customers during the Christmas rush.

Optus will also launch a pricey package for “premium” smartphone users that controversially promises to deliver their messages before anyone else’s.

But mobile industry experts warned Australian consumers to shop around to make sure they were getting the best deal this holiday season as rivalry between the companies was at an all-time high and even more price cuts could be on the way.

Optus CEO Allen Lew will launch new prepaid mobile phone plans in Australia on Monday, November 25.

Optus will reveal the complete overhaul of its smartphone plans tomorrow, ditching long lock-in contracts on all of its prepaid plans and replacing them with four monthly packages, priced from $39 to $79, and the ability for customers to build their own plans, determining what data, phone call, and overseas roaming allowances they needed.

Optus marketing managing director Matt Williams said the revisions had “been a few months in the planning” and came in response to customer demand for more freedom in phone packages.

“We’re confident our service is a great service but if customers don’t like it, they can change,” he said.

But, in what could be a controversial move, Optus will also launch a high-priced “priority” service for smartphone users willing to pay more to get data in crowded spots, have their messages sent before other subscribers, and to receive personalised customer support.

Mr Williams said Optus One subscribers would pay $119 a month for the plan, which would also come with a 500GB data allowance, 10GB overseas data roaming to some countries, and “network priority”.

This would not break “net neutrality” rules, he said, but would simply put Optus One customers at the front of the queue.

“If you’re in a place where there are lots of people on the network, you will get priority, a bit like if you’re boarding a plane and you’re a frequent flyer,” he said.

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Optus rival Telstra overhauled its mobile phone plans earlier this year. Picture: Michael Dodge/Getty Images

“If the network has the capacity to send a picture, it will send the Optus One picture first.

“This is about serving a specific group of customers … these are busy people who are time-poor.”

The mobile phone plan overhaul from Optus follow similar moves from Telstra and Vodafone earlier this year, both of which removed extended contracts.

Telsyte managing director Foad Fadaghi said the level of competition between phone carriers this Christmas was fierce and far from over.

“You’re going to see more creative plans from operators like this over the next few months,” he said.

“The mobile services market has become incredibly competitive on price and carriers are looking for new ways to differentiate their services.

“There’s probably going to be even more changes to plans as carriers react to each other and to new technologies.”

Australian smartphone users typically used Christmas not just to buy new handsets but to “consider their subscriptions,” he said, and this year could provide big savings for savvy shoppers.

Originally published as Mobile phone price war: Optus to cut costs and contracts in pre-Christmas customer battle