Telstra has announced today that it plans to release a $0 upfront laptop and broadband package for consumers and small business, but the inviting initial price tag belies the real cost of the deal.
"Building on the success of the $0 upfront mobile phone offers that really took off in the 90s, we've decided the time is right to extend the same deal to mobile broadband," said Cathy Aston, executive director of Telstra business in a statement.
Under the plan, users can purchase a laptop connected to the telco's Next G for no upfront costs, but will be contractually bound to an AU$99 per month agreement for the hardware and broadband connection — with a 1GB data allowance — for a total of 36 months, with an estimated minimum total cost of AU$3,564 over the life of the contract.
The scheme has been formulated in response to the growth in Australia's mobile workforce, with Aston saying there are estimated to be more than three million Australian mobile workers, and is an attempt to target small business owners.
The national carrier has partnered with Harvey Norman and direct distributor Techhead Interactive for its first offering of the package, leaving it up to the retailers to decide exactly what hardware to offer as part of the deal.
"Bundling a laptop with broadband connection for $0 upfront was an offer which we were expecting in the market for a few months now," said Waqas Javed, senior analyst, mobile services at analyst group IDC.
"The competitive state of Australian market suggests that other operators will soon jump into this new wave of competition with Telstra," he said, adding: "We can now see the network solution providers re-defining contracts with the hardware vendors to offer their 3G capabilities as built-ins with the new hardware items."
Javed told ZDNet.com.au today that he expects Optus, Vodafone, Hutchison and a number of other second-tier operators to come up with their own laptop based offers in response to Telstra's move today.
Dr Kevin McIssac, advisor at research firm IBRS, said the $0 price tag isn't an indicator of a great deal. "It seems like a very poor deal. Anyone who looked at that and thought it through could see it," he said. "Compared to paying for a separate data plan from another telco and purchasing a laptop independently of that the numbers just don't add up."
According to McIssac, the deal is indicative of Telstra's overall pricing regime, with analyst describing the package as "fairly consistent with Telstra's land-based broadband offerings".
At the moment, you can use Flexirent and rent a $2,000 laptop over 3 years for $102 per month or a $1,000 laptop for $52 per month. Add to that the Optus package of $39 a month for 5 Gig (and no upfront cost for the modem). Getting a personal loan would be even cheaper. The spec's of the laptop for the Telstra deal have not been mentioned, but it would have to have an RRPof $1,200 or more to make it even remotely competitive.