Guide To Choosing A Mobile Phone
Purchasing a mobile plan is more than a matter of simply choosing a handset! After picking a service provider and a call plan, you will most likely be thrown into the never-ending world of data plans, social networking options, insurance costs and warranty issues! Understandably, it can get very complicated very quickly more than a little bit confusing!
So, we've taken it upon ourselves to create a step-by-step guide which will help you safely through the legal and financial minefield that is the mobile phone plan!
Essential Steps to Choosing a Mobile Phone Plan
1. Budget - What's your budget? Before you do anything else, think about why you need a mobile phone and determine how much you want to pay for it every month. Is the phone for business, social, family or emergency? Is it for a young child, a teenager or an elderly person? Think about your usage patterns and how often you use the phone, and budget accordingly.
2. Plans - What type of plans are available? When picking a plan, you have to decide which one best suits your needs! There are three basic types of mobile plan: fixed-term contracts, monthly plans or pre-paid. Pre-paid plans are ideal for people who want to ensure that they stay within a specified budget - perfect for teenagers. Month by month plans allow you the flexibility of receiving monthly bills without signing a long-term contract but often don't include a handset. Alternatively, business or heavy users may prefer the value of a fixed-term plan, which also includes a handset. Today, fixed-term and monthly plans are 'capped' plans and offer more convenience and value over their pre-paid counterparts.
Examples of specialized plans today include:
cap plans - post-paid monthly or fixed-term plan which gives you a certain allocation of credit per month for an ongoing fee. If you exceed the 'cap' limit, you will be charged per call. Great for teenagers and socialites!
international calls - plans which give big international call bonuses. Good for travellers!
unlimited - post-paid plans which give unlimited call value and peace of mind every month for a high ongoing fee. Ideal for heavy users and business people!
pre-paid - a manual plan requiring you to physically top up credit at the end of a specified period. An option for younger children, the elderly and the money conscious!
BYO - 'bring your own phone': a fixed plan contract which gives great value at the expense of a handset. For those who already have a handset and only need a SIM card.
M2M - 'month-to-month': rolling monthly plans without the commitment of a long-term contract but do not provide a phone.
Check out and compare some award-winning plans here!
3. Handset - Do you need one? If so, what features do you need in a handset? A basic handset will allow you to make calls and send and receive SMS, while a smart-phone will allow you to browse the internet, check email, use Apps and take photos. When looking at which phones to purchase, consider features like battery life, memory and ease of use, as well as technical specifications like operating system and camera. Consider what you really need - or you'll be paying for features you never use. If you already have a handset, look towards BYO plans and monthly plans which don't force you to commit to a fixed-term plan.
4. Call rates - What are the call rates within each plan? Call rates vary from plan-to-plan. It is important to assess the rates and the call charge calculation methods when assessing your options. Issues to consider include: how are call charges calculated? On some plans, you may be billed per second; on others, per 30 seconds or 0 seconds. Is there a flag fall connection charge, in addition to call costs? Are there any special offers like cheaper calls off-peak, free SMS to friends, family discounts or free minutes? And most importantly, what happens when you exceed your allocated call credit? Does it increase your bill at a phenomenal rate or is it capped a certain point?
5. Contract - Do you want a contract attached to your phone plan? As a rule of thumb, if you are looking for a plan and a handset, you will most likely select a 24 month fixed-term contract. Fixed-term contracts typically include the phone value in the total monthly cost, along with the allocated credit, and are always better value than buying a phone out-right and subsequently purchasing a plan. Such contracts will typically state that the phone is available for free, 'for $0 upfront.' Alternatively, if you are not looking for a handset, the month by month rolling contracts are a convenient way of staying on top of your bills without a fixed-term contract, but still giving you a decent amount of call credit. Finally, the BYO ('bring your own') phone option is an attractive 12 month fixed-term contract which gives you more value than the month by month plan but doesn't lock you in as long as the 24 month plan!
Occasionally, you may find that you'd like an expensive phone but you don't particularly want or need an expensive plan! In such cases, you may sign a contract with a fixed-term handset repayment. Handset repayments occur in cases where the value of the handset far exceeds the value of the plan. For example, if you decided to purchase an iPhone 4S 64GB (typically available on a $79 plan) on a $19 plan for 24 months, you would have to pay a handset repayment fee of about $35 per month for the contract duration. This is to prevent people from unfairly purchasing expensive phones on cheap plans.
6. Extras - This is the confusing part! Many telcos include extra services in their phone plans to lure and entice unknowing customers into signing their contracts. These services include:
3G mobile data plans - most cap plans provide users with a 3G mobile data allowance to allow their users to surf the internet. Data caps typically start from 100MB (very light browsing and checking email once per day) and can range from 2GB all the way to 5GB (very heavy browsing, heavy streaming and heavy downloading). Additional data caps can be purchased for an additional price - starting from $4.99 - if you find that you are close to, or exceeding your current usage.
BEWARE however, if you do exceed your data cap limit, as paying for data is INCREDIBLY EXPENSIVE! Paying for an additional 1 MB of data will typically set you back around $2.00, so a bit of accidental browsing after you have exceeded your limit could potentially cost you a fortune! Thus, it is definitely worthwhile to ensure that you have the optimal data plan for your needs.
premium call services (18/19/1900 numbers, international calls and roaming) - premium call services are NOT part of your monthly usage and will cost you significantly if you choose to use them. Telcos often offer premium call packages for a monthly fee of about $20-30. Because international calls can cost upwards of $5 per minute, it may be sometimes in your best interests to purchase a package if you make occasional calls overseas and to such numbers.
social networking - many telcos offer free access to social networking sites like Facebook, Twitter, Myspace, Foursquare and LinkedIn. If you are a big social networker, you can definitely cut down your 3G mobile data usage by taking advantage of such free offers like this!
warranty - warranty typically covers manufacturing defects and software faults. Where a phone malfunctions due to no fault of your own, it may be covered by manufacturers' warranty. If your handset satisfies the warranty conditions, it will be repaired or replaced as new. Most handsets offer a 12 month warranty but an additional year can be purchased for an one-off fee, typically around $30-50. Consider whether you are a safe pair of hands and can last the full 24 months, or you would need the extra year.
insurance - mobile phone insurance offers you total protection over your handset, in return for a fixed-term monthly fee of ~$10. Whereas manufacturers' warranty will only cover manufacturing defects and software faults, phone insurance covers all personal fault, including and not limited to physical damage, liquid damage, loss and theft. Insurance handsets are always new. HOWEVER, if you do claim through insurance, expect to pay an excess depending on the cost of the phone. For example, to replace an iPhone 4S, expect to pay ~$150.
7. Service provider - Picking a service provider is often a confusing and complicated process, made more difficult by the fact that each company desperately wants your business and will do just about anything to get it! In Australia, our market is primarily dominated by the four main providers: Telstra, Optus, Virgin and Vodafone/3. Smaller competitors include Dodo, AAPT and Primus Telecom, each of whom piggy-back on the Telstra and Optus networks. Each company has its own flaws and its own advantages and has to be judged individually. For example, Telstra is known for their great reception and coverage but relatively high prices; by contrast, Vodafone has developed a reputation for providing customers incredibly cheap plans at the expense of reception. Optus, Virgin and the smaller competitors generally maintain average prices alongside average reception and service.
When selecting a provider, ensure that you the value and relevance of the plan is your sole guidance point. Staying loyal to a specific provider is a thing of the past as the market itself is highly competitive! Competitors will often offer awesome incentives like 3 months off your bill or free upgrades if you sign with them over another company. Occasionally the smaller, non-established companies like Dodo advertise fantastic deals that easily outdo the corporate heavy deals churned out by Optus and Telstra, so make sure that you are always looking around! Importantly, consider both the pros and cons of the individual service providers and the relevant plans, and also determine whether reception or value is more important to you!
And finally:
8. Evaluate the options - Always shop around! Once you've worked out what you want, do your homework; shop around and compare what is available, and what will best suit your likely usage and budget:
Shop, shop, shop! - Make sure that you are always on the look-out for deals. Telcos advertise heavily online and often offer great discounted plans for cutting out the middle man. Christmas, New Years, Valentines and Easter deals are all the rage currently, and given the Australian retail crisis, expect prices to only drop lower! Visit your local dealers, enquire on the phone, check out online offers, compare carriers, talk to friends; phone plans are always changing, and the consumer is the only one who benefits!
Consider the whole cost of the package - Offers such as ‘$0 upfront’ mean that the cost of the handset is absorbed into the overall contract price, not that the handset is free. Such offers may provide you with a good way of obtaining the handset you want, but they may not be your only – or cheapest – option. Similarly, think about whether you really want any ‘free’ gifts – or whether it’d be cheaper for you to choose a different plan and go and buy the ‘freebie’ yourself. Ensure you understand which services are included at special prices. Premium rate services, for example, may not be. Make sure you read and understand such policies.
Ask if there’s anything you don’t understand - Make sure you understand and are comfortable with everything before signing. Remember: whoever signs a contract is ultimately responsible for ensuring that the terms and conditions of the contract are met. So don’t sign a contract for someone else unless you’re prepared to pay all their bills. If you sign a contract for a friend (or child), and they don’t pay their bills, it’s YOU who will have to settle the debt. So unless you’re completely happy to cover someone else’s costs, don’t sign a contract for them. Help them choose an appropriate pre-paid option instead.
Happy Shopping!
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