Mobile phone plans


Key points

  • There are many different considerations when choosing a phone service agreement, including your budget.
  • There are different types of service agreements.
  • Phone contracts are binding financial agreements - falling behind affects your future credit rating.
  • Calls can be charged in different ways - some plans involve monthly caps.
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Teenagers using mobile phones for calls and texting


Comparing mobile phone plans

To choose an affordable mobile phone plan that offers all the features you need but stays within your budget, you will have to know how to compare a wide range of plans from different phone companies.

You'll need to consider the different networks, service agreements, phone features, call plans, data plans, coverage and data usage.

Service agreements, contracts and plans

Signing a mobile phone contract or service agreement is effectively applying for credit. You are agreeing to be personally responsible for regular payments and missing payments or getting into debt can impact your future credit rating.

The four main types of service agreements are:

  • prepaid
  • fixed term contract
  • pay monthly (no contract)
  • rental.

Things to consider

Key factors to consider when choosing a plan:

  • whether you already have a phone or want a new phone included in your plan
  • where you live
  • the number of calls you will make per month
  • the number of text messages you will send per month
  • data per month – is it included in your plan?
  • the time of day you will use your phone
  • the duration of your calls
  • whether your friends and family are with a particular phone company and there are ‘mates rates' or free calls/messages between people with that company
  • whether you can change your plan if you find it's not economical for you
  • phone insurance in case it's damaged or lost  while under contract
  • the fine print - make sure you check all the conditions to avoid hidden costs.

Call charging

Once you've decided which type of service agreement suits you, you need to look at how different phone companies charge for calls.

The difficulty in comparing plans is a common complaint, due to the many variables in the way companies structure their plans. For example, calls may be charged per-second or per block of time (usually 30 seconds).

Per second charging means that if you make a call lasting 32 seconds, you will be charged for 32 seconds. But when calls are charged per block of time, for example in 30 second increments, a 32 second call will be charged as one minute (two 30 second blocks).

Some providers also charge a flag fall or call connection fee for each call made. In this case, if you speak for 32 seconds, you'll be charged the flagfall, plus the cost of 32 seconds (depending on whether you are paying per second or by blocks of time).

Capped plans

A 'cap' is supposed to keep costs low and predictable, but beware of exceeding the amount you're allowed to spend each month, or your bill may be dramatically higher than the capped amount. Once the cap is exceeded, call and sms may be charged at a much higher rate - it should be covered in the fine print of your contract. 

A 2010 study by the Australian Communications and Media Authority (ACMA) found that 58% of users in Australia aged 15 years and over reported that they had exceeded their capped expenditure limit at least once in the last year.

More information


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