The Pros and Cons of Prepaid vs. Postpaid Mobile Broadband

prepaid vs postpaid

Comparing prepaid and postpaid mobile broadband

Mobile broadband is becoming increasingly popular in Australia, thanks to improved connectivity and affordable deals. All major telecos in Australia, including Telstra, Optus, and Vodafone, offer mobile broadband services in various parts of the country.

Growing demand for mobile data drives up high-speed mobile internet subscription. Latest reports show that global mobile broadband subscriptions increased by 8% or 108 million subscriptions in 2018.

Mobile broadband subscription (2018)

Mobile broadband subscription, 2018. Source

When it comes to choosing a mobile broadband plan with network providers, consumers have two choices – prepaid and postpaid mobile broadband plans.

What is prepaid mobile broadband?

With prepaid mobile broadband plans, you pay for each individual internet recharge on a month-to-month basis, prior to actually using the service. There is no contract, no automatic billing, and no overages included in this type of mobile broadband plans. If you run out of data, you have to recharge your plan again to continue using the internet. No extra fees can be incurred in prepaid plans without you purchasing additional inclusions because you pay ahead of time.

Many telcos offer longer expiry plans where you get a large amount of data to use over a longer time period. Many network providers offer plans with as long as a 365-day expiry. Such prepaid plans are ideal if your mobile broadband will serve as a back-up to a fixed line connection.

What is postpaid mobile broadband?

With postpaid mobile broadband plans, you receive a bill after using the service for a month. These plans are like an agreement — consumers choose a plan, and the telco bills them every month. Their plan inclusions automatically refresh on the first day of the billing cycle.

Postpaid mobile broadband plans can be SIM-only, which means consumers only pay for the service and bring their own device. SIM-only plans offer a better value than plans with mobile phones included, as consumers get many competitive options to choose from. Besides bringing their own device, choosing a SIM-only plan means consumers can also buy one outright.

Prepaid vs. postpaid mobile broadband

Prepaid data plans are often more expensive than postpaid mobile broadband plans of the same value, per gigabyte (GB). A great advantage of picking prepaid is if you’re not going to use the service every month — it can sit unused, but so long as you don’t recharge it, you won’t pay anything.

Here are the pros and cons of prepaid and postpaid mobile broadband:

  • Bill payments — Prepaid mobile broadband subscriptions come with many more bill payment options. You can pay the bill via scratch cards, make bill payments by visiting the respective sales and service centre, using a debit/credit card, or even using apps. However, when it comes to postpaid, you lack many of these options.
  • Billing cycle — Postpaid billing comes with a fixed billing date, which is often the 1st of every month or your billing cycle. However, when you choose prepaid plans, you can pay bills whenever you want to renew your subscription.
    This is one of the major deciding factors when you choose a mobile broadband plan. If you have a postpaid subscription, you strictly have to pay your bill within the 1st week, otherwise you’ll be fined with late payment charges or face a temporary service disconnection.
  • Contract — Because prepaid plans are pay-per-use, costumers don’t have a set lock-in period with the service provider. As a result, they can quickly switch to another provider if they aren’t satisfied with the current network provider, at any given time.
    On the other hand, with a postpaid mobile broadband plan, consumers are committed to paying the monthly amount for a time period.
  • Risk of overspending — With prepaid, you can only use the amount of the service you’ve subscribed to, so controlling your data costs is easier. With a postpaid plan, there is the risk of spending more than you planned. Before signing up for a postpaid plan, consumers should be aware of how much data, texts, and calling minutes they usually consume every month. It enables choosing the right plan for their needs while avoiding extra charges every month.

Final words

Whether you choose a prepaid plan or a postpaid mobile broadband connection depends on your needs and budget. Prepaid plans are often ideal for those who use the internet for regular, trivial tasks such as using social media, chatting, streaming, etc. However, heavy data users may be better off with postpaid plans, as they typically provide larger data inclusions.

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.