There was a time when you had a choice of only three brands for your mobile phone service – Telstra, Optus and Vodafone. Each of these telcos ran on their own networks and each had their own set of 4-digit mobile number prefixes so you knew which network you were calling. Things were much more expensive back then. Now you have a plethora of providers to choose from and tons of appealing cheap phone plans to take advantage of. But is there a catch? We investigate.
Back in the day, there was competition between the three gigantic companies, sure, but nothing earth-shattering in terms of value. It was generally accepted that having a mobile service came at the cost of expensive timed calls and a lengthy contract. This happened even when you were bringing your own phone, as an increasing number of people do these days.
How times have changed, though. The Australian mobile industry has exploded into a value-hunter’s paradise. There are plenty of companies, large and small, offering mobile phone services to cover almost any need. But don’t be fooled by the brand. Whether we’re talking about your favourite supermarket or a fresh company with cheeky advertising, every single mobile phone offering in Australia runs on one of the “big three” networks.
Vast improvements in technology over recent years have been the key factor in this revolution. The costs of international phone links (now often done using internet data rather than expensive voice lines) has plummeted. Moreover, the “big three” providers have, to an extent, settled into a comfortable position. Building of their networks is largely complete and profits are higher than ever. All three are happy to sell capacity on their networks to third-party providers who want to start their own virtual mobile phone company (and they’re literally known that way – as Mobile Virtual Network Operators).
What this means is that when you grab a prepaid SIM from, say, Woolworths or Aldi, once you activate it you’re really making calls and sending texts on the Telstra network. If you pick up a Lebara SIM, you’ll be on Vodafone. And even that long-standing Virgin Mobile brand has always used the Optus network for its calls (and these days Optus owns it as well).
But wait a sec – isn’t this the bargain tip of the decade, then? Why would you pay top dollar for an Optus service? Especially when you can just walk into your local Coles supermarket, pick up a $2 SIM and get unlimited calls and text for a month for 20 bucks? Well, if you thought there might be a catch, there is. Not all services running on the “big three” networks are equal. We’ll explain why in a moment.
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Why choose a cheap mobile plan?
The main reason to go with cheap phone plans is, of course, the fact that they’re inexpensive. But there are other advantages as well. You’re likely looking to keep in touch with loved ones via talk, text and online at a reasonable price. And preferably without having to sign your life away to a contract for a year or more. Furthermore, you probably don’t want to deal with credit checks and direct debits and monthly bills. Cheap phone plans also offer the liberty of switching providers if you find a better deal somewhere else.
There are some incredible offers available on the low-cost mobile market. For example, the prominent supermarket-branded deals. Not that long ago, big supermarkets were doing a roaring trade selling prepaid phones and SIMs for other companies. Hence, it’s not surprising that they quickly moved to launch their own mobile services. Some of their best cheap mobile plans are incredible value.
Coles’ offering is especially versatile, giving you unlimited talk and text across all recharge options including the cheapest, which is only $10 but has a 10-day expiry. It’s perfect for the “need a phone temporarily” market – tourists. Regular users can recharge $20 and get 28 days. Data-wise, the $10 plan offers 1GB and the $20 plan gives 2GB. These are not plans you’d grab to stream Netflix with (those limits are fine for regular internet use, though).
Meanwhile, for those with friends overseas (or those visiting Australia), many cheap mobile plans have international call inclusions. A popular example is amaysim. The telco has a $24.90 28-day SIM that gives you unlimited calls and texts in Australia and unlimited international calls to any of ten countries. Across almost all providers that offer unlimited international calls, the group of ten countries is the same – including the US and UK, India, China, Malaysia, South Korea, Singapore, Thailand, Hong Kong and NZ. Data is again at the low end – 1.5GB. Just fine for regular monthly mobile internet use. Another $5 bumps that up to 3GB, if you’re a heavier mobile data user.
Down at the super-cheap end of the spectrum there’s offerings from the likes of Vaya (at $16/month) and Kogan ($16.90/month). Both come with unlimited talk and text and 1GB of data (and if you pay for a year of Kogan’s service in advance it works out to just over $10 a month). There’s many more options available. Have a look through our comparison of mobile plans to size them up and find the right fit for you. One thing’s for sure – there’s incredible value to be had.
OK, so what’s the catch? How can these companies offer access to these huge networks so cheaply? Well, it’s all about the fine print.
The fine print
Almost all of these “virtual” providers will advertise proudly that they use one of the big three networks. Thankfully, almost all of them now have access to the fast 4G portions of the networks for data (and sometimes calls). And that right there is the hint that all is not equal. The “big three” providers have always treated virtual providers differently when it comes to accessing their networks. And that’s still the case today.
So while you might have a super-cheap plan that runs on, say, the Optus 4G Plus network, that doesn’t mean your mobile will get access to the entire Optus network when using that SIM. Generally, the cheapest phone plans are quietly restricted to only certain frequencies on the wider network they connect to.
That’s not a big deal for most people; for a couple of reasons. Firstly, a “full service” SIM from one of the big providers will have access to more mobile towers and technically have better coverage. But in reality, it makes little difference for your voice calls and texts, unless there is major congestion where you are. For example, if you’re at a sporting event or concert where congestion can happen even on the major networks anyway.
Secondly, the latest super-fast 4G data technology uses multiple frequencies to achieve its raw speed. If your SIM is restricted to using only one, you will never see those 300Mbit/sec downloads advertised on the phone’s box. However, if it’s super-fast data downloads you’re after, you’re looking in the wrong space, anyway. These cheap phone plans are designed for people who make voice calls and send texts, not heavy data users.
Some cheap phone plans require you to sign up for a recurring payment, too. It’s not a contract, but it’s also not as flexible as a pure prepaid service. This can also lead to unexpected excess data download charges being debited from your bank account. Try to look for offers that work on a recharge basis – they’ll usually display pricing per 28 days and mention credit expiry. When you’re on a prepaid service, you can’t be charged for going over your data cap. Instead, you lose data access or have it slowed down until you buy a data pack.
Are cheap phone plans worth it?
Yes. Especially if you’re looking for a plan that lets you talk and text as much as you like for as long as you like. Without even worrying about a bill. You’ve got some incredible value choices in the many cheap mobile plans available right now.
It’s true, the big networks are often offering bonuses and huge data caps as a response to the popularity of these inexpensive plans. But, if you mainly use your mobile phone for calls/texts – with the occasional bit of Facebook or whatever – you can’t really go wrong by checking out the value offerings from this new wave of providers. And remember, if you don’t like your plan and want to change to another, you can always keep your mobile number. No reason you can’t try them all until you find the right fit.