How you can choose the perfect mobile phone plan

There are three main types of mobile plans in the Australian market, and understanding which one is the best for you can save you plenty of money on your annual mobile phone spend.

Let’s break down the options available:

A contract with a large carrier

Typically these are 24 months duration. If you want the latest iPhone or Android device with all the bells and whistles, but don’t have a spare couple of grand to shell out for the hardware, this is a good option. For $80 per month you will get unlimited calls and text messaging plus approximately 4GB of mobile internet data per month, with the latest iPhone X thrown in. For $10 a month more, the carrier will usually up your data allowance significantly to 10GB or more. You can walk into any of the major carriers stores, pay nothing, and walk out with a brand new iPhone within half an hour. It’s certainly very enticing.

However, there are some pitfalls with these 24-month contracts. You are tied to your carrier for the duration, so coverage needs to be considered. You might have great coverage at your house, but what if you are thinking of travelling? Do you have a weekender, or spend time working at different places, or at relatives’ homes? Two years is a long time to put up with a ‘black spot’ at a place you regularly visit. Also, if your phone is lost, stolen or damaged beyond repair, it doesn’t affect your contract — you still owe the money. Your options are to pay out the contract, which might be say, 8 months x $80 = $640, or you can buy a handset outright and continue with your contract.

Prepaid mobile plans

By their very nature, prepaid plans are far more flexible, and much cheaper than a contract mobile phone plan. You can typically get an unlimited call and text plan with a large mobile internet data allowance for around $20 per month on a prepaid plan. As the name suggests, with a prepaid plan, you pay an amount upfront for an agreed period, and you need to ‘top up’ before that period expires to continue your service. This period can be anywhere from 10 days to 365 days, but the majority operate on a monthly basis.

Prepaid plans are a great option if, like most of us, you are on a budget. You pay upfront and therefore cap your spend each month. You aren’t tied in to your carrier for any longer than the expiry of your recharge, so if you aren’t happy with the service, the coverage or anything else, you can move on at any time.

On the downside, international roaming is not available on most prepaid plans, and you may not have access to things like a full voicemail service or premium services. You need to be careful of expiry periods too. Some carriers have replaced monthly expiry periods with 288-day expiry periods. This is no different to when Cadbury quietly changed the size of the family block from 220g to 200g in 2015. A 28-day expiry period allows the carrier to charge you 13 times over a 12 month period. Sneaky huh?! You also need to be careful to top up before your plan expires or risk you service being disconnected.

Month-to-month post-paid plans

These are commonly known as ‘BYO’ plans, with the BYO meaning bring your own handset. Like a prepaid, you aren’t tied in to a contract, but you get a bill each month as opposed to buying a top up voucher. Plans start as low as $10 per month, and for $10-$12 per month you can get unlimited calls and text within Australia, and 1GB of mobile data. You aren’t tied to the carrier, you can usually access international roaming, and your plan doesn’t ‘expire’ until you want it to.

Also like a prepaid, you may have the upfront cost paying for a handset, but unless you want the new iPhone, you can pick up a reasonable handset for $150-$200 these days.

Each option has its merit and its downside. For me, I prefer the flexibility and price of a month-to-month post-paid. I come from an era where we didn’t have mobile phones or pay TV. I still consider them luxuries, and I pay the bills with mild resentment. My kids, on the other hand, see these things as necessities. They will happily shell out $80+ per month to have the latest hardware. Go figure.

Do you have a mobile phone? What sort of plan are you on?

Do you have a story to share with Starts at 60 or Travel at 60? Sign up as a contributor and submit your stories to here. If your story is published on our websites, you’ll go into the draw for some great weekly prizes. You can also join the Starts at 60 Bloggers Club on Facebook to talk to other writers in the Starts at 60 community and learn more about how to write for Starts at 60.