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Choosing a mobile phone in Australia

mobile-phoneAs in most countries, the range of mobile phone models and plans in Australia is huge, and it can be difficult to know where to start looking. The first thing to remember is to stay realistic about how much you can afford to pay.

Many ‘hand sets’ (the phone itself) are free on contract plans. However, newer and more expensive phones attract a monthly fee on top of call charges. Do some research to work out whether you really need features on your phone such as email and internet connectivity. Don’t rely on sales people for all your information. If you only use your mobile phone for calls, you can save a lot of money by choosing a basic model.

Mobile phone plans

As with the phone itself, it is important to choose a plan that you can comfortably afford. Failure to pay your phone bill could affect your credit record, making it more difficult to get a bank loan or mortgage. The two main types of plan in Australia are pre-paid and contract, or post-paid.

Pre-paid plans

If you are trying to minimise your mobile phone spend or you are worried about bill shock, a pre-paid plan is the best option. Unlike contract plans, which charge every month for the life of the plan, you can choose when to top up your pre-paid plan. Bill shock does not exist with pre-paid plans as you are not able to make calls once you exceed the amount of credit you have paid for.

Contract / Post-paid plans

The benefits of contract plans include the phone (often free, depending on the cost of the plan and value of the phone), free calls, texts, and downloads (depending on the plan), and the convenience of not having to ‘top up.’

Most contract plans run for 12 or 24 months. The cost of calls is usually cheaper for longer plans, but remember that you are stuck with the company for a long time, and it is expensive to break a contract; you may even have to pay it out in full.

Always read the details of a contract, especially call/SMS charges, connection fee, data download limit, and extra cost of a handset. You may have a phone from your home country that you could connect to a plan in Australia, however check whether there are any costs for unlocking it. It might be cheaper to just get a new phone.

You must also decide whether you want to pay monthly insurance on your phone. It will cover you if your phone is lost, stolen, or damaged, but it is an extra expense.

Bill shock

Mobile phone subscribers receiving receiving very high bills as a result of exceeding their cap limit, known as ‘bill shock’, has become a major issue in Australia.  The Australian Communications and Media Authority (ACMA) estimates that Australian mobile phone users pay $1.5 billion to telecommunications companies through poor plan choices.

The government is now forcing phone companies to provide more information about how they charge subscribers, and remove confusing language from advertising, in order to reduce the rate of bill shock.

Under the new rules for the telco companies, subscribers must be notified when they reach 50 percent, 85 per cent, and 100 per cent of their plan limit.

Of course, it is better to take control of your plan yourself, rather than relying on your provider. ACMA warns that warning messages could take up to 48 hours to arrive.

Telecommunications Industry Ombudsman (TIO) – If you have a problem with your service provider or think you have been overcharged, the TIO will look into the matter for you. The phone number for the TIO is 1800 062 058.