Make the call to save cash
With a range of innovative options on the market, Christine Long dials up the best deals for those mobile phone users who own their own handsets.
Fed up with the bill shock that goes hand-in-hand with the arrival of your latest mobile phone charges? If you are free of a contract and happy with your handset, there are plenty of SIM-only options to help keep a lid on your mobile phone outlay.
A range of low-cost providers offer SIM-only options that include unlimited national calls, unlimited SMS and MMS in Australia, free voicemail, and a reasonable data allowance for between $29 and $40 a month.
As long as you have an unlocked handset, you just need to activate a new SIM, which may cost from $2 to $20. Or if you want to hang on to your mobile number, it can be ported across to your new provider.
Elise Davidson, a spokeswoman for the Australian Communications Consumer Action Network, says a decade ago prepaid options were seen as the poor cousin of the mobile market, offering less "value" than a 12- or 24-month contract.
"Nowadays you'd be a bit silly not to look at prepaid, because you just have the ability to save so much money," Davidson says. "It could be half of that of a traditional kind of billed service." In Australia, SIM-only options are growing in popularity now it's possible to buy a decent smartphone outright for a few hundred dollars.
The offerings are a boon for the budget-conscious, such as Brian Rodrigues (see above right) and families who want their children to have access to a mobile and are happy to kit them out with a hand-me-down handset. In addition, says Cameron Craig, director of comparison website Whistleout, they can be a good way to mark time when people are waiting for the next phone upgrade.
Since low-cost mobile virtual network operator (MVNO) amaysim launched its first SIM-only plan in Australia in 2010, the SIM-only MVNOs have attracted 350,000 subscribers, according to Whistleout.
Amaysim, Kogan Mobile, Vaya and now Aldi are among those providers offering the lowest-cost unlimited SIM-only options.
For infrequent users, there are SIM-only options with limits on calls and texts that have an even lower price and longer-lasting credit. Aldi launched a $15 pay-as-you-go option this month where credit lasts 365 days.
If you're choosing between the unlimited options, what should you weigh up?
Look at the network behind the offering and whether it is 3G or 4G. Amaysim uses the Optus network, Red Bull uses Vodafone, while Kogan uses Boost and Aldi uses Telstra. However, it is only 97 per cent of the Telstra network. An Aldi spokesperson says this means that outside the 3G coverage footprint, which covers 97 per cent of the Australian population, customers would revert to 2G coverage and speeds.
Data allowances and the way data is billed can be significant. Kogan has the largest data allowance, at six gigabytes, but it has just put a 400-megabyte daily limit on it.
Craig says rounding up to the nearest megabyte can affect how quickly the data allowance is used.
As the table shows, some players charge per megabyte while others charge in smaller increments.
Phoning friends or family overseas might influence your choice. Aldi includes $10 and Vaya $100 of international calls or texts credit in unlimited plans, whereas Kogan, Red Bull and Boost require users to buy an international option. It is worth checking how international use is billed. Vaya's international call rates are from 29¢ for 30 seconds while Aldi charges from 10¢ a minute.
Although price might be the main reason people go unlimited, amaysim chief executive Rolf Hansen says people shouldn't overlook service.
Last week Kogan attracted the ire of customers for disconnecting people it claimed were breaching its excessive use policy, which deems the unlimited options can be used for residential purposes only.
Hansen suggests factors you might want to consider include: how long it will take you to get your new SIM, can you recharge online or through a smartphone app, and whether call-centre support is important to you.
With providers operating on razor-thin profit margins, Craig says Australia is unlikely to see more price cuts, although amaysim offers temporary discounts on its website.
However, he points out that in the US, Republic Wireless has cut similar deals to less than $US20 by using wi-fi technology to power calls when the customer is at home. "We may see something like that in Australia to further disrupt the price."
Living in SIM
Brian Rodrigues is thrilled to have cut his phone bill in half by switching to a SIM-only provider. "We can be paying another bill with that money," he says.
The 52 year old from Springvale in Melbourne's south-east switched to the $39.90 amaysim unlimited option about nine months ago after it was recommended by a friend. Part of the appeal was the amount of included calls to 1300 and 1800 numbers.
Before switching, he had been paying $89 a month plus $11 for insurance on a 24-month contract with Optus.
Between the two, he tried Virgin but was put off by a series of hassles where he couldn't buy a low recharge voucher online and had to request to be put back on an unlimited plan when credit ran out.
He voted with his feet and has since encouraged his 18-year-old son, Kaizer, to do the same.