Call plans are schedules that describe how call rates are calculated. They also state the call charges for peak and off peak times, flag charges and free call features if they apply. There are four basic types of service agreements: fixed term contracts, monthly plans, pre-paid and leasing.
Fixed term contracts
Fixed term contracts apply when you sign a network service connection agreement. Mobile phone service contracts are of a specified length, usually between 12 and 36 months. During this period your mobile phone company agrees to provide you with connection to a network and, in many cases, the use of the handset and a certain number of free calls or text messages per month.
Fixed term contract costs include a monthly access charge. Generally call plans with higher monthly access charges have lower call rates. In addition there is usually a flag charge, which is an extra charge on each call you make, including your call costs (peak and off peak).
Pay monthly (no contract)
If you own your own handset, most mobile phone companies offer service plans for connecting you to a network on a month-by-month basis (without a fixed term contract). This offers you flexibility to change monthly plans or phone companies more easily. Because most companies are offering network access separate from the purchase of a handset it’s possible to shop around for the best network deal.
Pre-paid mobile phone services give you more control over the amount you spend. You can use your handset or purchase one separately. The service is activated when credit is purchased from a chosen network provider and the service is registered. It is often possible to buy a pre-paid phone with a certain dollar value of call credits included.
It is important to note that call charges for prepaid mobile services can be higher with some phone companies, so be sure to ask about call charges. Also, if you purchase the mobile phone as part of a pre-paid package, some phone companies lock the phone to a particular Subscriber Identity Module (SIM) card and you may have to pay an ‘unlocking fee’ if you choose to change to a different mobile phone company.
Take control of your finances, consider the pre-paid option
no contracts – no bills – no worries.
Renting or leasing a mobile phone may be a suitable alternative if you only need a mobile phone for a specific period, for example, on a holiday or during a period of work. At the end of the lease you can either return the handset, or continue with the lease. Leasing prevents you from being tied to a lengthy contract.
Comparing call plans
It is often difficult to compare different call plans because of the variety of methods used to calculate the call costs and free call features. Call costs can be calculated in per second lots or in 30 second blocks. If calls are calculated in per 30 second lots then you are charged the specified call cost for every block of 30 seconds in each call that you make. Being charged per second may minimise call charges if most of your calls are less than one minute.
To decide on a call plan you need to work out how many calls you will be making, how long each call will last and when you will be making the calls (peak/off peak). Take the time to do this, especially if you are signing a network service connection agreement as penalties may apply for changing plans in the middle of the contract term.
For more information visit the Australian Communications and Media Authority (ACMA).