Plan Vs Prepaid
There are two options for mobile network access - a prepaid account or a monthly plan on a contract. The choice will affect call costs and the availability of some services, such as messaging, Internet access and global roaming. When making the choice, consider how much you intend to use the phone, differences in call charges and credit vs recharge payment.
Prepaid - A prepaid account begins with a starter kit purchased from a retailer, such as a post office or phone shop, and includes a mobile phone number, registration instructions and call credit card. Some packages also include a handset. Calls are paid for with a recharge card that contains a set dollar amount of call credits. Some prepaid accounts also allow phone or Web recharge with a credit card.
The advantages of a prepaid account are more control over expenditure, quick registration and set-up, and no exit or termination fee for ending a contract. This is a cheaper option for those who don't make many calls and don't mind the need to top up call credit. Prepaid also allows you to bring your own phone without restrictions. The disadvantages of prepaid, however, include higher call charges, restricted network services, minimum recharge amounts (such as $20 or $50 - the phone is restricted to emergency calls or receiving calls if call credits run out), and call credits may expire after a certain period of time. And there may be a fee to unlock the SIM card to use the phone or number on another network or plan.
Contract - A contract involves signing up for a fixed period of time, (usually between 12 months and 24 months), for a set monthly fee. The plan cost usually includes a value of call charges, but beyond this, call costs are applied to the monthly bill. The advantages of these plans include lower call charges, no call credit restrictions, access to global roaming and full network services and the ability to bundle mobile, home phone and internet plans depending on the service provider.
The disadvantages, however, are being locked into a set plan and network provider, termination fees for breaking a contract and having to estimate the expected usage before singing up and committing to a contract. Plans start at about $10 per month and go beyond $200, with more value in the call credits at the higher end of the scale. All three network providers in Australia also offer capped plans. Rather than pay for each call and SMS the usual way, a capped plan means users only pay a certain amount per month if their usage doesn't exceed a maximum value. Once they spend more than that amount, they are charged the regular per unit rate.
Before signing up for any plan, it's also important to check the fine print for connection fees, exit or termination charges, fees for upgrading or downgrading to another plan and cost of directory and operator-assisted calls. It's also important to know what protection the network offers against costs incurred with lost or stolen phones.
Some of the important questions to ask include:
- Are there free calls to phones on the same network?
- Are there "free time" (calls made between certain times and networks that may be free) options?
- What are the choices of plans?
- Are there talk and/or text packages?
- What are the Internet/home phone/mobile phone bundles?
- What are the global roaming (using your phone overseas) agreements?
- What are the service and warranty agreements?
- What are the penalties for breaking a contract?
- How do I transfer an existing mobile number?
- What is the coverage area?
BYO Phone? - The next decision is whether or not to bring your own phone or sign up for a contract that includes a phone as part of the package. Many plans include a phone in the package, but phone subsidies, once popular ways to entice users to the market, have all but ended. When choosing a phone and plan, the cost of the handset will be built into the overall cost of the contract or an additional cost that can be paid off in instalments over the life of the contract. If there's a particular handset you're after, or have bought one already, then just compare plans. But make sure to check what, if any, restrictions or limitations the network provider will impose. For example, a BYO phone may not be fully covered for support or some network services.