Most of us won’t keep our New Year’s resolutions past the first week (if we get that far at all). Exercising regularly was probably just as hard to pull off on Dec 31 as it is on Jan 1, so unless we possess extreme willpower, it’s unlikely that a new year brings with it a complete lifestyle change.

But organizing our finances can be easier when it comes to services like mobile, internet, utilities and insurance. Get on a plan that works for you and the rest is easy. You don’t have to do anything – if you make the right choice from the start, the rest will just work.

Of course, if it were that easy, we wouldn’t have to use the start of a new year as a jumping off point to find something better. The point there is – there are definitely plans out there that are structured in a complex way to extract more money from you. There’s no nicer way to put it. There are usage monitoring tools to help you use your service without paying penalties, but few people have the time to use them. Wouldn’t it be nice to just pay one fee, and that’s it?

“Cap” Plans

"Excluded calls?"

There are mobile plans out there that are true caps (in the sense that there is a finite amount you will pay every month), but the ones with the word ‘cap’ in the description usually don’t apply. When cap plans started to get introduced, the idea was to pay a flat fee every month. Of course, it doesn’t quite work like that – the flat fee you pay covers a specific amount of credit, and you must pay over that if you use more than the cap plan allows. This contradicts the dictionary definition of a cap, of course – but most people don’t exceed their cap limit.

Over the years, the providers have chipped away at the overall value of caps. First they’ve jacked up the per-minute virtual price of calls. Paying $30 a month for $200 worth of calls, with calls costing 12 cents per minute, is vastly better value than $20 a month for $500 worth of calls with calls costing 99 cents per minute. But at first glance, the second plan seems like much better value.

But even if you want to do the math, the providers have another way to get you. These are ‘exclusions’. Some calls will not be tallied as part of your cap credit- this often includes calls to numbers starting with 13, 1300 or 1800. These numbers have traditionally been free or cheap on landline phones, so people are in the habit of thinking they’re free or cheap on mobiles. Not only are they charged as regular per-minute calls, they’re also not included as standard, so they’re charged above the cap.

This is the reason why ‘bill shock’ is still identified as the biggest problem with mobile phone services. And here’s a tip – any time you buy a phone on contract, you will be put on a cap plan. That’s it – no exceptions. So remember: the seemingly cheap $0/month price you pay for a handset is being subsidized by all the poor saps regularly paying hundreds of dollars in excess usage fees on the same plan. And chances are, over a 24 month contract, you’ll be one of those poor saps at least once.

SIM Only plans

Amaysim (1300 302 942) and Dodo (1300 136 793) are both classified as Mobile Virtual Network Operators (MVNOs). That means they offer mobile services without actually owning a network; they wholesale network space from Optus, who act as the main wholesaler to most MVNOs. In fact, almost everyone who offers a mobile service, who is not Telstra or Vodafone, uses the Optus network.

Amaysim was the first to offer the blockbuster $40 Unlimited plan. If you already own your phone, you can get just a SIM card, pay $40 a month, and all calls are free. And I mean pretty much any call that can reasonably be expected: mobile calls, landline calls, 13/1300/1800 numbers…all included. International calls and calls to 1900 numbers are blocked; but you can add pre-paid credit to make those calls. Amaysim borrowed this model from a European operator called Simyo who had big success in Germany and Switzerland. They also include a very generous 4GB of mobile data.

A number of providers have followed, with Dodo sweetening the deal by including $50 credit for international calls, and 5GB of mobile data. Though their customer service has come under fire when it comes to broadband services, mobile services usually require less interaction with frustrating call centres – especially when the plan comes with so much baked-in value.

Buying a Handset

Beep. Boop.

Obviously, getting the latest handset with a SIM-only plan is difficult – you have to purchase the phone outright, which can cost up to a thousand dollars. That’s not a coincidence – the providers don’t provide those phones cheaply because they’re nice, they do so because they want to entice you on to a Cap plan. Even providers who offer comprehensive ‘unlimited’ plans don’t provide them as part of a handset purchase.

Dodo (1300 136 793) is trying hardest here. Many of their best phones (including the Samsung Galaxy S3 and HTC One X) are available with a plan that includes most of the free stuff as on their $40 Magic Sim Unlimited Bundle. The overall price with the handset repayment is sometimes slightly more expensive than what Optus, Vodafone and Telstra offer directly, but there’s less chance of Bill Shock thanks to the structure of the plan. It’s worth it.

iPrimus (1300 137 794) have better value bundles than most other providers who offer new handsets as well, but with one of the best customer service records (and an all-Australia based call centre).

iPhone

Unfortunately, none of the budget providers can offer the iPhone right now. You will have to settle for one of the major providers, with Optus (1300 137 897) faring the best for price and value, while still offering a 4G network.

4G?

The latest iteration of mobile phone data speeds, 4G (or LTE, for Long Term Evolution) is currently available on Optus and Telstra (and Virgin, which is owned by Optus) in a handful of early rollout areas. Vodafone will be launching their network around April.

We have mixed feelings on 4G. Despite amazing speeds, it’s still subject to two major limitations: you still get very little data, and it’s still essentially radio- even excellent 4G speeds can be halted by poor reception and interference. So be aware that the premium you pay may not be worth it – most applications that sip data (like Maps, E-Mail and Web Browsing) still work fine on 3G speeds.

Conclusion

If you have a phone that you’re happy with and you’re not in contract, go with Amaysim (1300 302 942) or Dodo (1300 136 793) for the absolute best value plans with the least risk of overspending.

If you need a new (Android) handset, Dodo is probably your best bet – but be prepared to pay $70 or so for a decent plan. Keep in mind that this ‘decent’ plan will be far safer and better value than a cheaper cap plan from one of the majors. iPrimus (1300 137 794) is an alternative with high value cap plans (still requiring you to monitor your usage) but at better value than most with great customer service and support.

If you’re getting the latest iPhone, or need 4G data speeds, best to try Optus first (1300 137 897) with Telstra (13 22 00) a good bet if you need their superior coverage in rural and regional areas, or if you already have several other bundled services with Telstra.

For more enquiries, please contact us on 1300 106 571!