News flash! A laptop is not a mobile phone

Stan Beer
Thursday, 22 May 2008 15:08

Opinion and Analysis

This may come as a shock to Australia's dominant telco Telstra or any other carrier that tries to sell a laptop the same way they sell mobile phones. It can't be done and there's any number of reasons why.

Looking at Telstra's recently announced $0 up front laptop bundled with its Next G mobile broadband deal, it's easy to see why the telco is tentatively dipping its toe in the water with a limited time offer, to a limited market and a limited price range. The offer expires June 30, is only available to business customers and it only applies to laptops up to $700, which cuts out most decently configured laptop on the market.

The fact of the matter is the Telstra $0 laptop deal is clearly self-defeating. These days if anybody who has a business can't stump up with $700, forget Flexirent they could simply buy it on their credit card. Even at the whopping 20.74% that some banks charge for credit card purchases, they could pay a $700 laptop off at $65 a month over 12 months. Vodafone offers a 5GB mobile broadband plan for $39 a month.

Thus, total cost per month for a $700 laptop purchased by a high interest credit card with a 5GB Vodafone mobile broadband plan is $104 a month for a year, after which the laptop will be paid for. Then the ongoing cost of the data plan will be just $39 a month.

By comparison, $0 upfront laptop from Telstra with a 1GB mobile broadband plan will cost $99 month over three years. Bearing in mind that most business users that need a laptop for mobile broadband use will require significantly more bandwidth than 1GB, at 25c per additional MB, the $0 upfront mobile broadband laptop could end up costing $7000 or even more over three years under Telstra's plan.

Obviously, any business owners who do their sums will simply dismiss the Telstra $0 laptop as not being cost effective. However, there's another very good reason why this plan is doomed to failure. CONTINUED