Is Reliance's Rs 2,599 and Rs 2,999 iPhone 5 offers worth it?

( Editor’s note: A calculation error in this story has now been corrected)

What’s the buzz on social media today? Nope, not the Sensex which shot through the roof. But, the fact that Reliance Communication now offers iPhone 5 for a fixed monthly fee ranging between Rs 2,599 and Rs 2,999, respectively is making round on Facebook, Twitter and like. Sounds like a deal? Or is there a catch somewhere? Firstpost decodes this iPhone offer. Read on.

What’s the offer: The offer is on two models the iPhone 5C and iphone 5 S. While the iPhone 5C is available in 16 GB and 32 GB. The iPhone 5S is available in 16 GB, 32 GB, and 64 GB. You will need to pay Rs 2,599 for 24 months for C model and 2,999 for 24 months for the S model. You won’t need to pay a down payment for the 16 GB handset. But for 32 GB 5C model, you would have to shell out Rs 11,600. While for the 32 GB 5S model the down payment is Rs 10,992 while for 64 GB 5S model is Rs 19,992.

You get unlimited voice minutes (local and STD) across all networks, unlimited SMS (local & STD) across all networks and unlimited 3G Data usage.

Which bank’s credit cards: Currently the offer is available on ICICI, Citibank, Standard Chartered and HDFC bank credit card. While the Reliance spokesperson told Firstpost that the process of more banks being added is going on.

Finer details:

Mode 5C:

16 GB: Monthly amount: Rs 2,599/-

For 24 months you pay: Rs 62,376/-

Down payment: 0

Total you pay: Rs 62,376/-

Outside MRP: Rs 41,900/-

Difference: Rs 20,476/-

32 GB: Monthly amount: Rs 2,599

For 24 months you pay: Rs 62,376

Down payment: Rs 11,600

Total you pay: Rs 73,976

Outside MRP: Rs 53,500

Difference: Rs 20,476

Model 5S:

16 GB: Monthly amount: Rs 2,999

For 24 months you pay: Rs 71,976

Down payment: 0

Total you pay: Rs 71,976

Outside MRP: Rs 53,500

Difference: Rs 18,476

32 GB: Monthly amount: Rs 2,999

For 24 months you pay: Rs 71,976

Down payment: Rs, 10,992

Total you pay: Rs 82,968

Outside MRP: Rs 62,500

Difference: Rs 20,476

64GB: Monthly amount: Rs 2,999

For 24 months you pay: Rs 71,976

Down payment: Rs 19,992

Total you pay: Rs 91,968

Outside MRP: Rs 71,5000

Difference: Rs 20,468

Now remember that your card will be swiped for the whole amount, but you will need to make the payment of Rs 2,599 or Rs 2,999 every month for 24 months towards you card, depending on the model you choose. As far as the down payment goes, if you are unable to make that down payment amount in full towards the credit card next due date, you will have to pay a rate of interest to the bank, as per your cards’ interest rate.

Chances are most won’t be able to take care of the amount as a lump sum, and let’s not forget that in the next card statement you will also have the EMI amount to service. So more often than not, the down payment will be rolled to the next month on revolving credit. Credit cards charges 30-36 percent per annum for revolving the credit amount.

Usually an average post paid user’s bill is approximate Rs 900. If you see, depending on the model you choose from, you land up paying as much as Rs 20,486 more than the market price without contract product. This means, you pay around Rs 20,486, which is Rs 854 more a month for 24 months as compared to if you’ve would have bought the phone at MRP without contract. But remember, that you do get all your voice, SMS and data free, which you would pay on average on an MRP phone without this contract.

If you would have bought the phone from an outside vendor and continued to pay the Rs 900 odd monthly charges, the final amount you would bear as cost, would be almost the same as this offer. Take for instance, if you buy Rs 71,500 pieces and you would have paid Rs 900 a month for 24 months as mobile bill. Your total cost would be around Rs 93,000. Not much of a difference. So this means, if you are someone who has their mobile bill in the range if Rs 900 plus, this offer might just work for you.