Moving Phone Companies – What You Need To Know

Overcoming the ‘oh no’ feeling you get when you feel it’s time to move phone companies

Moving phone companies, whether you are taking the leap from Vodafone to Optus, Telstra to Vodafone or any of the other potential permutations, can seem like a big dead. Like moving bank accounts, the very nature of the transaction can appear so detailed, it’s overwhelming.

We’ve worked through the process for you

The staff on this website move providers all the time, as you can imagine. We check out new phone companies as they arrive to market. We need to do that for the reviews we write. And of course, we all want the best deal we can get on a SIM plan, personally, too. In this article, we have worked through and noted the process of moving phone companies.

Importantly, we’ve done it with ‘normal’ people in mind. In our view, these are the critical factors to consider when you’re moving phone companies. And don’t worry. Like many things of this sort, it’s not nearly as hard as you think when you take a look at the detail.

If you know your billing cycle and the date you get your bill, you can minimize the costs of moving. Here’s how.

You only really need to know this one thing to make the process painless

The most important thing you can establish is your ‘billing cycle date’.

There is a critical element to your agreement with your phone company. Understanding it will make the move to your new provider as pain free as it can be. There is a difference between the date you get your phone bill and the billing cycle that you have entered in to with your phone company.

Starting with postpaid plans : What is a billing cycle ?

If you’re not sure, we have written elsewhere about what the difference is between prepaid, postpaid and month to month.

The billing cycle you have with your phone company is simply the regular monthly renewal of your phone service. The billing cycle starts right at the beginning of your agreement with your phone company. The billing cycle starts when you activate your new SIM service.

To make this as clear as possible, let’s use an example. Say you order a SIM online, from Vodafone, right now. When the SIM arrives, it is likely to be activated almost immediately.

You may have to call them to do it. They may activate it for you. Let’s say the SIM arrived on the 5th of the month and you activated it that day. Your ‘Billing Cycle’ starts on the 5th of each month and ends on the 4th of the following month.

Your charges and allowances all tie in with your billing cycle date. When they say you have 1000 minutes of calls, they mean 1000 minutes of calls to use between midnight at the start of the 5th of each month and before 11.59PM on the 4th of each month.

When they say you have 5GB of 4G data to use – they mean that’s 5GB of 4G data to use between the start of the 5th of the month and the end of the fifth of the month.

What about prepaid ? DO prepaid plans have Billing Cycles ?

Prepaid is, of course different. The billing cycle for prepaid services are simply the term of the prepaid recharge window. The billing cycle for prepaid plans starts the day you recharge your service. For most plans, the recharge window is 28 or 30 days. At the end of that time, you will need to recharge or the service will stop.

How to establish your billing cycle

The easiest way to figure out the key information you’ll need is to locate and print off a recent email bill or recharge confirmation email from the phone company you are using. Most phone companies will email your bill to you these days. And most emails are archived. As a result, you should be able to find a bill without too much hassle.

How is a billing cycle different to the date I get my bill ?

If you have a postpaid service, you will be charged after you have used your phone service. So, for example, you might have a billing cycle which starts on the 5th of the month but your bill arrives later. You might not receive / get charged for your bill until the 20th of each month.

Think of it from the phone company’s perspective. Every time you make a call, they register it. The row they record is called a CDR or customer data record. The billing system charges you for these calls, removing usage from your entitlements. If your usage is outside your entitlement, you will be charged on top of your plan. So, if you use 500 MB of data in a single session on the 6th of the month, your entitlement will be reduced by 500 MB. If you call overseas on a plan which does not include an international dialing component, you will be charged extra, on top of your regular monthly payment. The phone company runs these monthly reviews of customers’ activity, using your CDRs, several times a month. You might be grouped with hundreds of thousands of people, all of whom have their CDRs added up and their bills worked out, retrospectively, on the 20th of the month.

Why is it critical to know your billing cycle if you are leaving your existing phone company?

If you want to maximize the value you get from your plan, when you are considering moving phone companies, you need to know your billing cycle.

If you pay $50 per month for unlimited calls and SMS plus 8 GB of data, and your billing cycle is between the 5th of the month and the 4th of the following month, you want to cancel the service as close to the 4th of the month as possible. In the example here, you will be charged on the 20th for your usage during the month. If you’re leaving, you want to use as much of your entitlement as possible and then leave !

If you were to leave on the 6th of the month, you would still be charged the $50 but you would only have 1 day to use that 8GB of data.

So, how do I leave when my billing cycle is finished ?

Just sign up for a new service. Go to the website of the phone company you want to sign up with and fill in the online form. You will be asked as part of the checkout process whether you want to keep your existing phone number or get a new one.

‘Porting’ can take 48 – 72 hours

Porting is simply the process of moving phone company with an existing phone number.

Porting often takes a very small amount of time. It can take as little as 30 minutes. However, the industry SLA ( Service Level Agreement – the promise they make you that they ‘have’ to keep ) is that porting can take 48 – 72 hours.

What that means to someone moving phone companies is quite clear. To maximize your usage and the value you extract from the billing cycle you have paid for, you need to sign up for your new service 3 days ( 72 hours ) before the end of your billing cycle.

In the example we have stuck with on this page, the billing cycle ended at 11.59 PM on the 4th of the month. That means you want to sign up for the new service with your new phone company sometime around the 1st or 2nd of the month. This way, you will be ported across before the billing cycle starts again. You won’t be charged for another month you don’t want.

It’s worth bearing these things in mind too when you want to change providers

1. Port, don’t cancel :
If you cancel your service, you’ll lose your phone number. We have written extensively on the subject of keeping your phone number. Sign up to the new provider as we have described to avoid the possible negative consequences of losing your phone number.

2. You won’t get any money back :
Bear in mind that once your billing cycle starts again, you’re going to be charged. You will be charged there and then for another month. Whether you cancel your service one day or 29 days after that, you will still be charged. You won’t get money back ‘pro rata’ for cancelling mid billing period. As you would expect, everything works in favour of the phone company !

3. ETPs :
In the examples we have given on this page, we are dealing with a situation in which you can leave your current provider without penalty. If you are within a contract, you will also need to understand the ‘buy out’ cost for leaving your agreement early. In the industry, this is called an ‘ETP’ or Early Termination Payment. They can run to hundreds of dollars. The way to find out your ETP is to contact your phone company and ask them. We recommend that you ask them when the ETP will fall. Typically, your ETP will reduce each month you pay for your contract and fall to $0 within a few months of the end of your contract. At this point, make sure you know your billing cycle, use your entitlements and then buy a new plan.

4. If you’ve used your entitlements early, you may as well leave :
Whenever your billing cycle starts and ends, the goal here is simply to maximize the value you get from your plan.

5. Cancel the direct debit just in case :
I am a belt and braces person. I have also worked in telco for too long to take on trust that there won’t be a problem with billing. If you have set up a direct debit facility ( or, for that matter, any other automated telco deduction from your account ) I recommend that you contact your bank and cancel it when you move away from your existing phone company. If the money is coming out automatically, it’s all too easy for them to ‘whoops!’ take out another $50 from your account. And then getting it back involves hours on the phone.


Summing up the process of moving between Australian phone companies

For the time strapped especially, moving phone companies is considered simply too time consuming to bother with. However, with a simple review of an old bill, you’ll find the your billing cycle. Dip out just before the end of your billing period to maximize the value and reduce the cost of moving.


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.