In this article, we explain how the different types of plan work.
SIM only is almost always the best choice. With a rising number of SIM Only sales in Australia, we’ve got 2 unusual deals for you – with incredible value.
There are 3 types of SIM Only plan
SIM Only plans can be one of 3 types in Australia. Finding the best value SIM Only plan involves comparing all 3. The complexity of comparing the different SIM Only plan types means that people don’t bother to do it a lot of the time. That can mean they miss out on the best SIM only Plan deal.
The goal of this article is to get you the best SIM Only plan deal
This article has compared the best value SIM Only plans across the 3 types of SIM Only plan which are available. The aim of the article is to save you time and ensure that you get the best deal possible on SIM Only plans in Australia.
You’ll see from what’s below, there are some amazing value deals in the market which will let you get the best out of your existing phone and save you a substantial amount of money. Importantly, we have compared prepaid plans with month to month plans with SIM Only contract plans. This chart summarises the differences between them.
This Month’s Hot Offers
The 3 types of SIM Only plan are:
1 ) Prepaid :
You purchase a SIM and recharge voucher as separate items. Access to the phone company’s network is paid in advance. You can change network providers whenever you want to.
2 ) Month to month :
You purchase the service, the SIM is free. Access to the phone company networks is paid after you have used them. ( That’s called ‘postpaid billing.’ ) You can change network providers whenever you want to.
3 ) SIM Only Contract :
The only company which offers SIM only contracts at the moment is Telstra. You purchase the service, the SIM is free. Access to Telstra’s network is paid for after you have used it.
Key Chart Call Out : The best deals come from MVNOs
Contract plans vs month to month plans vs prepaid plans.
The good and the bad – SIM Only vs Month to Month vs Prepaid
The key call out is that month to month plans and prepaid plans offer ‘hidden’ deals from MVNOs.
Knowing how much voice and data you need
Before you choose the right plan for you, we encourage you to consider your usage. You don’t want to pay for service you won’t use. And, you don’t want to run out half way through a month.
Obviously, your usage patterns will dictate how much voice and data you use. These statistics are valid as of 2014. They are provided as a benchmark to give you an idea of what you and others might use.
- Average voice usage :
Approximately 5 calls of an average 2 minute duration per day
- Average Data usage :
For those with the very latest smart mobile phones about 1 GB of data.
If you are in doubt as to how much voice and data you are using, you will be able to find your personal history in the online self service facilities your current phone company has. You can also study previous bills for hints.
In a nutshell, what are the best value SIM Only Plans in Australia ?
Worth knowing about the Boost and Amaysim plans :
- Since both plans are offered without a contract, if you try them and don’t like any aspect of the service, you’ll be able to move to it.
- If a competitor offers / launches a cheaper alternative, you will be able to move to it straight away since your commitment is only for the month you’re in.
The problem with SIM only plans is the complexity
For years, the telcos ( that’s your phone companies ) have made it incredibly difficult to understand the difference between the different types of SIM Only product. There are 5/6 different types of prepaid plans e.g. Cap, Long Expiry), each of which has a number of recharge denominations ( $10, $20, $40 … )
There is usually only one type of month to month plan ( for example, a SIM Only month to month plan with the same inclusions as the equivalent contract plan but you save $10 per month ) per phone company but there are 5/6 denominations to choose between.
The only phone company to put a contract on SIM Only plans is Telstra. Their 12 month contract for SIM only services is a bizarre anomaly which confuses things further.
Why are the SIM only plans so complicated ?
Having worked in the telcos, I can tell you, people are not trying to confuse you. The staff who work at the phone companies genuinely want to make it as easy as possible for customers to understand what’s going on with their SIM Only service. Unfortunately, the people trying to do that and the industry itself are constrained by legacy understanding defunct marketing messaging .
From a customer standpoint, the difference between the different types of SIM Only offerings is pretty minimal so it’s difficult to tell between them.
Considering SIM Only plans also introduces a new aspect to the problem. There are many MVNOs who provide SIM Only services.
MVNOs have the best SIM Only deals
An MVNO is a Mobile Virtual Network Operator. In simple terms, they rent the network of one of the phone providers you know ( for example, Optus ) and sell SIM Only products on that network.
The benefit to you is that these providers are substantially cheaper than the existing networks.
The growing importance of SIM Only
It is hard to overstate the way that the SIM Only market has revolutionised the phone industry in the last year. For a long time, SIM only plans were predominantly sold as prepaid. Roughly, prepaid makes up 45% of the Australian market for mobile telecommunications products.
Since the start of 2013, there has been an enormous increase in the number of people using postpaid SIM Only products. Now, SIM only connections form 20-30% of postpaid market. That’s an increase in the number of people who take a SIM only plan of 100% in 12 months.
That means SIM Only plans, both prepaid and postpaid are now 60% of the market for phone company services.
Why is SIM Only becoming more and more popular ?
SIM Only as a term is usually used by the phone companies to describe their postpaid offerings. To normal people, however, it applies to prepaid and postpaid ( whether the postpaid agreement is month to month or for a fixed period of 12 or 24 months. )
- People are smarter :
Australian consumers, informed from the internet and their experience with phone company products over the last 20 years have figured out that SIM Only is almost always the best choice for them.
- There are a lot of ways to get phones :
Some buy second hand mobiles through eBay or family member. Some ship phones in from overseas – often on the grey market at pricing which is better than they’d get if they bought in Australia. Increasingly, people are purchasing their phone in more conventional ways, via either the phone company ( Telstra, Optus, Vodafone, Virgin Mobile – each of which have launched or are about to launch the facility to buy phones outright ) or the manufacturer ( Samsung / Apple. ) It’s often easier to get a good deal on the buy price of a phone from one of these sources.
- The market is flooded with phones :
Since the launch of the iPhone, innovation has slowed down in the release cycle of mobile phones. This year’s Samsung Galaxy will have a couple of new features but it won’t be a million miles from last years. For many, having a phone which is a year or two out of date – perhaps hanging on to their phone at the end f their contract is fine.
- You get great rates :
Typically, with the major phone companies, you will save at least $10 per month for each of their month to month ( post-paid ) plans if you bring your own phone with you. Over the course of a contract, that’s a non trivial $240 extra you will save. However, as you will see from the below, shopping around can get you a much better deal.
What’s good about SIM Only plan contracts ?
Contracts are the the ‘standard’ way people have engaged with the phone companies for the last 20 years. You sign up to an agreement with the phone company to pay a minimum fee for 12 or, more often, 24 months. You get a ‘free’ phone ( the price of it is included in the call plan you get ) and you’re not allowed to leave and get better pricing for the duration of the agreement.
- They’re ‘mature’ :
Contract plans have been associated with a more mature choice for a long time. The reality is that for those who shop around, the best deal can be found in getting beyond this prejudice. However, it does seem to exist.
- It’s convenient :
By default, all postpaid plans have to them an important element of convenience. With postpaid, you usually provide some bank or credit card details and you are charged for the services you’ve used automatically. This sort of facility is available for both On Account and Prepaid plans. However, since it must be established by the user of the SIM and is not turned on as default, we’ve marked contracts as more convenient.
What’s not so good about SIM Only plan contracts ?
- You’re trapped and won’t get the benefit of price reductions :
The core nature of the agreement you sign up to within a contract is a commitment to a period of service. The problem with contracts is that, during the course of that commitment, aspects of the service can end up being something you don’t like. Obviously, customer service, network, more generally customer experience can let you down. However, perhaps most importantly, during that time, competitors can launch alternative products which have better value. The general trend of cost of telecommunication services has been that they have become increasingly cheap with time. When you’re locked in to a contract, for the period of the commitment, you are prevented from benefiting from this sort of competitive move or price depreciation.
- Out of bundle fees :
With prepaid, you know where you stand. You are never going to get a $1000 roaming bill. The most you can be charged with prepaid is the recharge value you have purchased. Almost everyone with a contract, at some stage, has experience bill shock. Bill shock is when you’ve incurred a significant expense over and above what you expected to on your phone bill for an additional service, not included in the cap.
What’s good about SIM Only month to month agreements ?
Reminder – what is a month to month agreement ? Remember, the phone companies call these ‘On Account’ plans. They are postpaid ( you pay after you’ve used the service ) but the only agreement you have with them is for the month you’re in. At the end of that month, you can transfer to another provider if the pricing is better or you are dissatisfied with any aspect of the service you have received.
- You’ll save money :
At a minimum, when you deal with your usual phone company, you will get a discount of $10 per month, for the same inclusion levels as if you took a plan with a phone. For example, on the $40 price point, Virgin currently offers $450 worth of included value for voice and SMS – this plan comes with a $0 upfront phone. You will get that same level of inclusion for $30 if you decide to BYO phone. However, you can see the problem here, in the maths. They are offering consumers a choice of a phone or a $240 ( $10 per month over the course of the 24 month contract ) saving if they BYO phone.
- You could save a lot of money :
Considering month to month as an option puts you in a position where you can consider offerings from the MVNOS : This is why we recommend the MVNOs. MVNOs such as Yava and Amaysim have some of the best value in the Australian market ( depending of course on your requirements. )
What’s not so good about SIM Only month to month agreements ?
There are no negative aspects to a month to month agreement.
What’s great about SIM Only prepaid ?
Reminder : Prepaid services are those you pay for in advance. Initially, you purchase a SIM from your phone company. Then you ‘top it up’ using a recharge. Different recharges have different features. For example, calls might be expensive but be valid for a long time – that’s called a Long Expiry Cap.
- Rates are often as good as any :
Prepaid has a name as an offering designed to appeal to teens. However, the rates available in prepaid are just as good as, if not better, than those available either under contract or within a month to month agreement. The reason isn’t hard to see. With Prepaid, the phone companies don’t have to recover the cost of the phone they included in your plan.
- You could save a lot of money :
There are prepaid deals on the market which most people don’t know about which out-perform very similar offerings from the main phone companies.
- Complete predictability :
Even with month to month on account plans, services which are not included in the plan are applied to your account and deducted at the end of the month. For example, the plan you choose may charge for 13xx numbers if they’re called. With Prepaid, while you may be charged, your exposure – the maximum amount you will pay will only ever be the face value of the recharge denomination you choose. So, if you spend $25 on a recharge, the most you’ll pay is $25. This way, if your recharge runs out sooner than you thought it would, you can investigate and avoid being charged for services you thought were included in your cap.
- Total flexibility :
With prepaid, your commitment to the company you choose is only ever for the period of the recharge. If you want to move to a better deal at another telco, there’s nothing stopping you. It takes a couple of days to transfer your number across and once you’re there, you can carry on with getting the best deal in market.
- Innovative plans :
The prepaid market is not a small one. It’s worth billions of dollars in Australia every year. The phone companies put a lot of effort in to competing for your custom if you’re a prepaid person. The result has been some innovation from the phone companies. $2 Days ( a Prepaid Plan ) from Optus is a good example. Uniquely, Optus will charge you $2 per day on this plan. But they only charge you for the days you turn your service on. If you don’t touch your phone one day, you won’t pay. Other examples include Long Expiry caps which can be used in phones ( or other devices ) that you don’t touch very often. For example, an emergency phone in a glove box of a car.
What’s not so good about Prepaid Plans ?
- There are no real negative aspects to Prepaid plans. The default setting for a prepaid plan is that you will have to buy a recharge manually every time you want to. However, many phone companies allow you to ‘auto top up’ at the end of the month if that’s what you want to do. As a result, in the chart above, we’ve included ‘inconvenient recharge’ as a negative.
4G SIM Only plans in Australia
There are around 4.5 million users of 4G network services in Australia at the moment. Australia enjoys some of the fastest network speeds anywhere in the world. In tests done at the start of 2014, speeds of 24.5 Mbps were recorded 58% of the time. Telstra’s 4G availability was the best with 64% of the time the test was run. Optus was not far behind at 48% of the time. Australia was the 9th fastest provider of network services in Australia.
It’s worth recognising that not all of the phone plans which are available for SIM Only plans are 4G enabled. Specifically, in terms of the recommendations we’re making, the Amsysim $44.90 plan is not 4G.
One of the defining characteristics of people looking for a SIM Only plan is that they already have their own phone. A lot of these phones are second hand or hand me downs and are only capable of 3G speeds. Our recommendation is to ensure that you know whether your phone is 4G capable. If it is, you can decide whether 4G speeds are important to you.
Summing up – If you’re thinking SIM Only choose an MVNO
Choosing SIM only is probably the smartest decision you can make about a phone. That’s why so many people are doing it. Australians are smarter about choosing the best phone plans than they’ve ever been. Unfortunately, the SIM Only market is needlessly complicated. We’ve tried to clear up some of the common misunderstandings in this article.
The key to SIM only is choosing an MVNO. MVNOs just rent their network from one of the major phone companies. As a result, the services they sell are cheaper. But you get the benefit of a tier one network. The examples we’ve provided, Amaysim’s $44.90 plan and Boost’s $20 plan both use the strongest networks in Australia And they both provide the best value in market.
This Month’s Hot Offers
See all SIM Only plans
If you need another network, for example you’re after an unlimited plan with Telstra coverage, or you live in a city and you’re happy with Vodafone, you might like to check our SIM Only Comparison page and compare all the plans ( including every one mentioned on this page. )