Why Australian telcos are changing plan expiry dates and what it means to consumers

60-Second Review

In recent news Telstra, Optus, Vodafone Australia and Amaysim have moved to 28 days billing cycles, on their prepaid plans. Read on for our findings in the following story below.

  • The move to a 28 days billing cycle is a Telco industry first in Australia.
  • All national carriers, Telstra, Optus, Vodafone and MVNO Amaysim, are on the new recharge cycle.
  • There is still plenty of other MVNOs on the regular 30 days recharge, for consumers not happy with 28 days.

30 days billing used to be the industry standard

Prepaid plans used to operate on an industry standard monthly basis, which was calculated on 30 days.

The move to change was made by the major Australian Telcos, Telstra, Optus and Vodafone Australia.

But it appears that one MVNO is following suit, with Amaysim announcing that they too will be moving to 28 days.

With Amaysim, one of Australia’s most popular MVNOs moving to the 28 days recharge model, will others soon follow in their footsteps?

By moving to a 28 days recharge, instead of the previous industry standard of 30 days, an additional 13th month can be billed.

This means subscribers will now have to pay for an extra recharge each year, instead of the previous 12 only.

Amaysim has said the move to the 28 days recharge, will allow customers to compare prepaid plans more clearly.

Industry experts are however accusing the telcos of “incremental creep”, by removing clarity when it comes to renewal dates.

Tech entrepreneur Ruslan Kogan, was quoted as saying:

“They’re trying to increase revenue and increase profit through incremental creep. They’re hoping people won’t notice and will just pay.”

By offering 28 day and 30 day plans, consumers are more likely to be confused and no doubt that is part of the Telco companies plans.

“There are 28-day and 30-day plans and they’re confusing people. It’s why when you walk into a supermarket, you now have a product in three different packages and sizes, but there’s the 100-gram labelling, to make it easier to compare.” – Ruslan Kogan

Not all MVNOs have moved to 28 days

But not all MVNOs have yet moved over to the 28 days billing model.

Companies such as Boost, Yomojo and Lebara still operate on the much more acceptable 30 days recharge cycle.

For consumers unsure of what this means, Whatphone demonstrates with this comparison:

  • John is on the Amaysim prepaid, UNLIMITED 2GB, $29.90 plan
  • Before on this plan John would make 12 payments per year
  • John would pay in total $358.80
  • On the new 28 days cycle, there is now an extra 13th month
  • John now needs to pay an additional $29.90

Technology expert Angus Kidman, from Finder, suggests users look at extras they might be receiving on the new 28 days plan.

Even though the Amaysim plans are now on 28 days, they have increased the amount of included mobile data.

This could be seen as a trade off, which in comparison to other MVNOs, might not be such a bad thing.

“You’ve got to ask, ‘What am I getting?’ Depending on the data allowance and quality of signal you’re getting, you may end up with a better deal with, say, Amaysim, which has boosted the amount of data you get.” – Angus Kidman

While Amaysim operates on the 4G Plus network, some subscribers might be happy with the 28 days recharge.

Knowing that they are connected to a premier network, with great plan inclusions and data allowances.

But they are not the only MVNO on the Optus 4G Plus network, with both OVO Mobile and Yomojo on it as well.

With both Yomojo and OVO Mobile, still operating on the standard 30 days billing cycle.

The Australian Telco industry is highly competitive

Industry experts point out that the trend towards a 28 days billing cycle, had occurred as more Aussies moved to prepaid.

With a large range of SIM only prepaid plans on offer, the number of users doubled in the year to December 2015.

Some 14 percent of Aussies are now enjoying the benefits of being on a SIM only plan.

The ACCAN (Australian Communications Consumer Action Network) said that a 28 day billing cycle, unfairly impacts on some users.

Specifically people that are on the lower end, cheaper prepaid plans.

28 days recharges are difficult to budget for and to keep track of the renewal dates.

This is something which consumers need to keep in mind and ensure they have the extra money available for.

Industry experts have commented that Australia is one of the first countries to introduce the 28 days billing period.

When it comes to traditional billing cycles, no other country be it the United States, New Zealand or Canada, is currently operating like this.

There is still a great deal of choice in the market

But there is still plenty of choice in the Australian market, other than the national carriers and MVNO Amaysim.

Great value MVNOs still exist on the usual 30 days recharge period.

Lebara, Boost Mobile, OVO Mobile and Yomojo to just name a few, still offer great value prepaid plans on 30 days.

There is lots of choice in the highly competitive MVNO market, if consumers don’t agree with the 28 days, there are other options.

Expiry periods used to be standard and working on a guaranteed month.

It seems that in today’s highly competitive market, the goal posts are being moved.

A sign of the times as companies struggle to generate revenues amongst tough competition?

Many frustrated subscribers of Amaysim have been venting their views on the social media networks.

“I hate what they have done with the 28 days thing. They stood out from the others and now they’re joining the race to the bottom with the rest of the telco turkeys” – Antsey, Whirlpool forum.

In Conclusion

Aussies not happy with Amaysim moving to a 28 days recharge, have plenty of choice to select from.

OVO Mobile and Yomojo both operate on the super fast Optus 4G Plus network. Lebara operates on the Vodafone 3.5G network, great for people living and working in the major cities. And Boost Mobile operates on the Telstra 3G and 4G networks, providing great Australia wide coverage.

Not happy with your provider moving to 28 days billing? No worries!!! Simply switch to one of the above great value MVNOs and continue enjoying your 30 days on prepaid.

 

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.