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You've bought an awesome phone, now get an awesome SIM only plan
If you’ve just bought your phone outright (or you’re just about to) you’re one of the smart ones. Now get a phone plan and a new SIM too. Check out the list below.
Remember, you can keep your existing phone number when you move to a new phone company.
The days of phone contracts are all but over
A massive 5 million smartphones were sold in Australia in the previous 12 months. But the phone industry is changing. It used to be that most people bought their phones indirectly, through a 24 month contract with their phone company. Fewer and fewer people are doing that every year. Some predictions suggest that phone contracts, already only 18% of the market will fall further in the years ahead. By 2020, only 8% of people will buy their phone under a 2 year agreement with the likes of Optus, Telstra or Vodafone.
So why the change and what does it mean to you?
Adding a SIM yourself is often much, much cheaper
People are buying their handset themselves and adding a SIM for a number of reasons :
The economics of phone + SIM make it cheaper : The most obvious reason for buying your phone yourself and adding a SIM is that it can work out substantially cheaper to do it that way. Do the maths yourself or check out our comparison infographic below. Tying your deal together in this way can often save you 25%-30% over the 2 year lifetime of your phone.
Phone purchase is now much easier : Australia now has more options than ever to get the phone outright. You can see them on this site. Brand new phones make up the majority of purchases in Australia but ‘Pre Owned’ phones also make sense, especially if budgets are constrained or people don’t need the latest and greatest phone to service their mobile needs. Finally, value for money models from the likes of OPPO and Alcatel offer 90% of the features and functions you’ll get from a Samsung or Apple device and cost a fraction the price. Add a SIM and you can save even more.
At the end of the contract : Most people have a vague idea when their phone contract is going to end. They don’t know exactly, they don’t track it and they don’t know what to expect when their agreement ends. What should happen is that your phone bill should fall substantially. When you’re paying $50+ for a monthly bill, it’s because you’re paying for the price of the phone as part of your monthly plan. At the end of the 24 month contract period, the hardware should be all paid off. You might notice, however, that a lot of the time, your bill won’t be reduced when the 2 year term is over. Managing the process of purchase and SIM change yourself makes this far more manageable.
Buying your own SIM opens up new opportunities
Consider these facts when weighing the alternatives available to you :
Your data usage is rising all the time : Just as kids you haven’t seen in a couple of years are noticeably bigger when you do bump in to them, your data usage is rising all the time – you just don’t notice it because it inches up day by day. Analysis by our partner site for SIM deals whatphone.com.au suggests that data usage on phones is rising by between 70% and 100% per year. There are a number of causes for this. They all stem from the increasing prevalence of mobiles and the reliance we all place on them, particularly the increase in the amount of video we watch on them. Being outside a contract means you can change your SIM Plan to include more or less data, as your needs change.
Data deflation : The counterpart to rising data usage is the phone companies’ need to stay competitive. The amount of data they include in a plan at any given price point tends to roughly double each year – for those who are not trapped in a contract. If, 12 months ago, you were able to get a plan for $30 which had 300MB of data, you can now find one with 1GB or more for the same price.
Flexibility to change provider : When you’re not tied in to a phone contract, you can move phone companies whenever you want. That gives you access to the most competitive deals when you’re ready to change.
So, how do you make the most of the opportunity
Yes, you can keep your phone number : The most commonly asked question for those looking to get a new SIM is ‘Can I keep my phone number.’ The answer is yes. Every phone company, has to let you leave them and take your number with you when you go to a competitor.
Get the basics right : Broadly, phone companies break their offerings in to two areas when it comes to getting access to their networks. You can either buy your phone from them, under contract, with prices starting typically at $50 and going up from there. The alternative is known as a BYO (Bring Your Own) Phone Plan. Other names include SIMO (SIM Only) deals or just ‘Prepaid’ which is, itself, a suite of plans which will be provided to you with a SIM. The major difference between the two is that if you sign a contract to get the phone, you’re actually paying for the phone hardware as part of your plan.
Know the difference between prepaid and SIM Only deals : Prepaid plans are paid for before you use them. In a literal sense, prepaid plans are all SIM Only plans. However, SIM Only deals are often used by the phone companies to describe their postpaid SIM offerings. The only difference is that with postpaid plans, while you still pay monthly, you do so at the end of the month you’ve just used. In practical terms, postpaid plans are often seen as the more mature, easier to manage choice. They require a credit check and services you use outside your core agreement (for example, in some cases, calls you make from your mobile in Australia to an international number) are applied automatically to your account.
Compare your phone plan options on this page : See the plan options on this page and you’ll notice that there is a choice of payment type (prepaid/postpaid), network and inclusions. We’ve laid them out in a table so you can easily pick the right one for you.
Pick a smaller phone company : There are around 50 phone companies in Australia you know. Our advice is to consider the smaller ones alongside the big phone companies you’re more familiar with. In the case of Lebara, for example, you’ll get access to the same Vodafone 3G and 4G network that you would if you went direct to Vodafone. Similarly, providers like OVO Mobile and Moose Mobile offer price plans which connect you to the Optus 3G and 4G network and are often much better value.
Service your phone as you do your car : Make a note to check in again on your phone plan in 12 months. You will likely be surprised at the extra value you get for your money.
Bringing it all together
Things are changing for the phone companies. The days they tied people in with phone contracts are over. The range of options available to people who have bought their phone outright are substantial and the benefits are easy to see.
Buying your SIM alongside your phone lets you keep your existing phone number and gives you access to cheaper plans, often on the same networks you’re used to with, critically, generous data allowances. Make sure you use your new found freedom and compare every 12 months or so. Your data usage is rising and you’ll notice, when you come back in a year, that inclusions have increased.