Mobile phone plans don't have to be complicated. They're made to seem that way because the harder your decision is, the more likely you'll buy whatever's put in front of you. This guide will help you work your way through the maze of mobile phone plans so you can find one that's right for you.

On this page:

• Getting a good deal
• Pre-paid or post-paid?
• BYO device plans
• What are the different mobile networks?
• Can you use your SIM overseas?
• What happens if you exceed your data limit?
• What are portable numbers?
• What do pre-paid SIMs/phone plans cost?

Getting a good deal

Before looking into the hundreds of phone and plan packages out there, you need to decide what kind of user you are. Think about:

• where you'll you be calling (local, long distance or international)
• how much data you're likely to use, or how much media like music or video you think you'll download onto your phone every month.

While there was a time when mobile plans had a limit to the number of texts and calls you could make each month, this is no longer an issue – even the cheapest mobile plan will included unlimited mobile calls to landlines as well as SMS and MMS to mobiles.

It's also worth checking to see if calls to certain numbers (such as 1300 and 1800) are covered, as well as premium numbers (1900).

Pre-paid or post-paid?

This is the big decision, really. Think about it from the perspective of "Sure, post-paid usually has some good deals, but do I want to commit to a monthly bill? Or will I just top up when I need to?". Some people are better at budgeting with a routine, while others are more likely to use their phones sporadically and will find it costs more to be locked into a contract than they might otherwise use on a need-to-buy basis.

Post-paid plans

These are usually 12–36 months with a minimum monthly service charge, which usually includes a range of data for internet use plans. Most importantly these plans include the cost of a handset, which can make a brand new phone easier to pay off in instalments, but rest assured you will end up paying for the phone.

• Post-paid plans may have infinite talk and text and large (over 100GB) data plans.
• Costs escalate to the point of offering you just a bit more for the next monthly payment level, but make sure you actually want the 'extras' on offer.
• Most carriers have unlimited data plans (within the fair use policies of the carrier) with data provided at a slower rate once the plan's cap has been reached. This removes those surprising bills at the end of a month for data you didn't realise you used.
• If you want to quit a plan early there are usually exit fees, with some carriers insisting you pay the rest of the contract out – check the fine print carefully.
• Before signing up to a long-term plan, think about the length of commitment and minimum total costs. It's also a good idea to find out whether you can change to a higher- or lower-usage plan at any stage without penalty.

Pre-paid plans

With pre-paid plans you buy a starter kit (with or without a handset), which gives you access to the phone network and a dollar amount of calls and data. When that runs out, you can 'recharge' your network access (or, put simply, buy more), which is limited to a set period depending on how much you pay.

• A pre-paid service gives you tight control over call expenditure and is ideal if you're watching your budget or if the phone's for a child or teenager.
• Pre-paid tends to be the cheapest option for people who don't use a lot of data.
• Even if you don't have any network access remaining, you can still use the phone to make 000 emergency calls and receive calls for a limited time (possibly up to 12 months – ask providers for details).
• You won't receive a bill. However, you can check your call credit status at any time (usually via an app, a free-call number or online), and receive reminders (messages or notifications) when you're getting low on credit.
• The call credits may expire after a certain time, so you either use them or lose them. Some carriers let you carry over unused credits for up to 12 months.
• International roaming isn't available from all providers. If you want to go to another network, you may have to pay what amounts to an exit fee (ostensibly a fee for removing SIM security locks). Different networks have different policies – check before you buy.
• Look into how and where you can recharge your call credits. With many you can recharge over the phone or online, but other ways include going to a dealer outlet, service station, convenience store or ATM. You can check how long the credits are valid for, as well as the minimum recharge amount.

BYO device plans

Some fixed-term plans offer a particular phone included in its price in their monthly charge, or alternatively you can buy a new phone of your choice in monthly instalments, but separate from the plan itself. In both cases you'll have to pay out the price of the phone if you leave the plan early.

• Buying second-hand is an option worth considering.
• Don't be fooled by ads for $0 phones – they're usually $0* phones, where * means you're locked into a fixed-term contract that includes you paying for the phone in instalments for the duration of the plan.

What are the different mobile networks?

GSM/2G (no longer in service)

2G is no longer supporting mobile phone telephony. Many dual SIM phones, where the mobile has a slot for you to put in two separate SIM cards, only support a 2G network for the second SIM and 3G for the main SIM, making it effectively a useless mobile for the Australian market (see 3G below). 

These mobiles were useful when travelling to countries that supported 2G networks but we would suggest that the handset is now e-waste.

Third generation or 3G and NextG (effectively no longer in service)

3G is no longer widely available. While there are some areas with 3G service, this is not a dependable option and should no longer be considered when looking for a mobile phone.

4G, or Long Term Evolution (LTE)

Now the default mobile network option, 4G delivers faster online performance to your mobile phone than 3G. 4G started out on the Telstra network with a very limited area (serving around 40% of the population) but has improved dramatically over the years and is now the main network option for mobile phone communication and data. 

Other telcos, such as Optus and Vodafone, have their own 4G networks using the various Australian 4G network bands so you should be pretty good to go in most places around Australia. Check with your telco for more detailed coverage map information.

5G networks

5G is now here with Telstra, Optus and Vodafone all offering 5G services, and it will continue to roll out throughout capital cities and regional areas over the next few years. All three of those telcos have the option to re-sell access to their 5G networks to smaller providers. After an initial period where there were different phone plans available with 5G access, you should now expect 5G to be added to your existing plan by default. 

However, you do need a device that supports 5G, which will be almost all mobiles sold in the last year or so. Due to the nature of 5G's potential, it may lead to larger monthly data use, so if you're on an old plan with a small amount of data (below 20GB), take note of your monthly usage to avoid any bill shock.

Can you use your SIM overseas?

It's possible to use your phone when you're on holiday overseas, but there are limitations. The phone's bandwidth has to be compatible with the system in the country you're visiting, and your phone service provider has to have roaming arrangements there. Plus, it's often very expensive. 

But the situation does seem to be improving, with networks such as Vodafone offering a $5 roaming deal for compatible plans (where you pay $5 a day while overseas and simply use your phone as if the plan was the same as if you were at home). Look at the Optus and Telstra offerings before leaving.

What happens if you exceed your data limit?

Going over your allocated data allowance used to lead to a nasty shock of extra charges per megabyte. But the situation has improved, with networks often allowing you to continue to use your phone online at a slower rate. Check your plan to see if it has a cap and uncapped mobile network allocation. 

Talk to people you know who are already on a data plan to see how it works for them and the features their plans include. Always be wary of the terms 'free', 'capped' and any other marketing terms used to sell you the plan – always read the terms and conditions to see what you're really getting and learn about the limits and extra costs you'll be charged for going over these limits.

Wi-Fi access

Almost all new smartphones have Wi-Fi access, so you can roam to a personal network or wireless hotspot. This means you don't need to use the internet plan via the network, saving you data usage. A phone that lets you monitor both mobile network internet access and Wi-Fi usage is a handy feature.

Go low

Many carriers let you monitor your usage, either online or via their customer service. Some phones even have the option of monitoring the usage via the settings on the phone or an app. It's useful to be able to reset the usage rate each billing period.

Who are you paying?

One reason buying a mobile phone plan is so complicated is that there can be several different companies (often referred to as 'providers') involved, or the same one could provide the network, service and billing.

Carriers

Optus, Telstra and Vodafone are called carriers; they own, operate and install network infrastructures for mobile phone services.

Service providers

These companies supplement and compete with the carriers by buying services from them and repackaging them for sale to you. They may provide customised billing, and generally have more personalised service and a greater range of plans. Examples of service providers include Amaysim, Aldi and Dodo.

Retailers

In a mobile phone shop you can generally buy a range of phones and plans, but the contract is with the service provider or the carrier, not the retailer.

What are portable numbers?

You can change from one company to another at will, taking your current number with you as well as your business. Generally it shouldn't take more than a few hours. This is really good news if you're looking for the best deal, because you won't have to contact everyone you know to give them a new phone number.

Also, if you're running a small business this could result in substantial savings for you – a small business can't afford to be uncontactable for long, or have their contact details change. But it's not all good news...

• When you leave your current provider your contract will end, but you may have to pay cancellation fees as well as all outstanding call charges etc., so you may be better off waiting until the contract expires. Also, look carefully at the conditions of your new contract to make sure you're not jumping into the same deal you're trying to get out of.
• If you've got a pre-paid package you may need to get the handset unlocked (untethered from the network) before you can move to a new provider, and there could be a cost for this service.
• Only active numbers can be transferred, so cancelling before you move will render your current number unavailable.

What do pre-paid SIMs/phone plans cost?

Plans range in price from under $15 a month for a prepaid plan if you have your own phone, to $150 or more per month for heavy usage and a smartphone included.

Stock images: Getty, unless otherwise stated.

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