Mobile Contracts: If The Cap Fits, Wear It

Sun Herald

Sunday September 10, 2006

Jackie Pearson

Jackie Pearson looks at the plans.

MOST mobile phone providers offer some sort of discount when you make same-network calls.

Free or discounted "on net" calls are promoted as a way to stay connected with family and friends during our busy lives. They also give the networks a chance to recruit more customers.

So before you convert your extended family and friends to a new network, it pays to know if you'll really save money or whether you'd be better off on a capped plan.

HOW THEY WORK

There are three main options when selecting a mobile phone contract: prepaid (with or without same-network bonuses); post-paid contracts with bonus options (such as free or cheap same-network calls); and capped plans without bonus options.

Some prepaid offers come with on-net bonuses. Vodafone's prepaid Talker, for example, has a 20-cent preferential rate for calls made to other Vodafone mobiles up to a set number of hours (100, for example). Its Night Talker prepaid deal includes free night-time calls and the 20-cent preferential rate.

Telstra has just announced a one-cent SMS rate to existing prepaid customers when texting other Telstra mobiles. Optus offers prepaid customers a variation of its MyTime on-net offer (see table below) with 100 to 200 free minutes per recharge to five nominated Optus numbers (prepaid, contract mobile or fixed phones).

Minimum monthly spending levels for the post-paid contracts with bonus options usually start at $25. They're really designed for people who have a low or moderate level of monthly mobile use. Call rates vary, with flag falls, from one network to the next. Contracts are usually for 24 months and a free handset is usually included in the value of the plan. Optus MyTime, Vodafone's 20-cent Voda-to-Voda offer on its Talk 'n' Text plan, or the Primus five-cent Primus-to-Primus rate on its Selecta plans, are examples of the family and friend bonuses available.

Capped plans are mainly for big mobile users who want certainty about their call costs. For instance, the Primus $49 capped plan gives you $230 of calls and SMS a month, but all your usage is billed at standard rates. There are no other discounts or bonuses available. If you're a big user of SMS, a capped plan on a network with low SMS rates may be particularly attractive.

WHO DO YOU CALL?

Reg Robertson, spokesman for PhoneChoice, a free website that compares mobile plans, says "on net" deals are of little use if you make a lot of calls to people on unknown networks.

"You need to know which network is used by the person you are calling," Robertson says.

Mike Smith, group marketing director for Optus Consumer, agrees. "Most people only really talk to a small circle of people, but the number of people that you call on a known network could be an influence," he says.

IS A CAPPED PLAN BETTER?

Smith says a capped plan is really only as good as the underlying rates at which the calls will be charged.

"Capped plans give you not the cheapest but middle-of-the-road call rates with very few extra offers, but they do offer extra included value," Smith says.

Primus mobiles product manager Melissa Smith says it's worth checking exactly what's included on a cap before determining whether it's a better deal.

"Every network's inclusions are slightly different," she says. "You have to check that they include national calls, SMS, MMS, GPRS data transfers, 1800 numbers, international calls and directories in their eligible usage."

KNOW YOUR LIMITS

The precise on-net bonus you receive may also depend on your spending level. For example, while Primus doesn't have a time limit for its five-cent Primus-to-Primus calls, Optus limits its MyTime calls to the first five minutes, then it reverts to the normal 30-second billing rates. Vodafone imposes a maximum number of minutes depending on the level of your plan.

VERDICT

Family and friend discounts can be an excellent way to cut your mobile bill if you regularly call a small pool of people. They won't result in significant savings if most of your calls are to people on other networks. If you're a high-volume user it may be worth forgoing on-net discounts for the certainty of knowing how much call and SMS value you have each month.

SAVE BIG BUCKS

AUSTRALIANS are blowing more than $1 billion a year on unnecessary mobile phone bills.

A study has found 60 per cent of mobile phone users are being overcharged because they are not on the best plan for their circumstances.

The PhoneChoice research showed the average household's monthly bill was $57.64.

But PhoneChoice spokesman Reg Robertson says many people could get a better deal - one in five users spends less than five minutes choosing a plan, which they are then locked into for up to two years.

CASE STUDY

JASON (pictured) and Karen Davies have been with Vodafone for several years now. They're not big mobile users, but their phones are a vital lifeline.

"I work in Sydney but we live on the Central Coast with two primary school-age children, so our mobiles enable us to keep in touch and be on hand if we're needed," Jason says.

Normally the couple's calls cost 30 cents for 30 seconds, plus a flag fall, but if they call each other it costs only 20 cents as long as they don't talk too long.

"We've never talked for long enough to reach the 20-cent limit, so it keeps our bills very low," he says.

© 2006 Sun Herald

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