What is a Mobile Phone Plan?

mobile phone plans

Understanding mobile phone plans

To make calls, send texts and use the internet, your phone needs to be connected to a network. Australia has three major network providers: Telstra, Optus and Vodafone. These network providers have laid the infrastructure that all other phone companies use, which is why you’ll see smaller companies like Boost say it uses the Telstra network.

So, every smartphone needs a phone plan that connects it to one of the network providers. Your job is to find a plan that gives you the amount of data (internet download) you need at a good price.

What will you get with a mobile phone plan?

Every phone plan will come with three basics:

  • A voice plan: making and receiving calls
  • A messaging plan: sending and receiving texts and MMS (images/video messaging)
  • A data plan: using the internet

1. How voice plans work

Most plans today have unlimited incoming and outgoing calls to Australian numbers. You won’t have to worry about how many minutes you’ve used like we did when phones first came out. Some plans will also include limited talk time to certain international numbers.

2. How texting works

Texts include SMS (regular text messages) and MMS (multimedia texting, which includes images, videos, gifs etc). Most plans have unlimited texting as standard.

3. How data plans work

Data plans are a little more complicated. You need data to access the internet from your phone when you’re not connected to WiFi. With data, you can watch videos, use internet messaging like iMessage with iPhones, check your bank balance and scroll social media.

Phone plans include a certain amount of data that you use up until the plan expires (which could be one month or up to 18 months long), or until you run out. Some plan providers will say they offer unlimited data, but that means your data speeds are limited to frustrating snail-speed once you hit the data cap!

You might need to choose a small plan to start, see how you use your data over the month and go up or down in data from there.

Great offers to help you get started

Sorting out prepaid, postpaid and long-expiry

In the beginning, phone plans can seem confusing. Let’s look at the different types and who they’re tailored for.

Prepaid plans: you’ll buy a plan with a set amount of data to use until the plan expires. If you run out early, you’ll either have to wait for the plan to renew or buy another plan. These plans keep unexpected costs down.

You can find out more and compare prepaid plans here.

Postpaid plans: much like a power bill, you’ll pay for your phone usage after the plan expires. You’ll have a set data amount, but if you go over you won’t be cut off – you’ll just pay a fee for the extra you use.

You can find out more and compare postpaid plans here.

SIM Only plans: these are the most common way to purchase a phone plan. SIM Only means you’ll be sent a physical SIM card (or a digital eSIM) that you activate via the plan’s app. These plans aren’t tied to any telco or phone and can be switched to any other telco when it expires.

You can find out more and compare SIM Only plans here.

Long expiry plans: rather than a month-to-month term, long expiry plans can last up to 18 months. You’ll purchase an amount of data (for example, 150Gb) and use it up over the course of the plan term. If you run out of data early, you’ll need to purchase more. Long expiry plans often work out cheaper by the month because you’re getting a bulk discount.

You can find out more and compare long expiry plans here.

Phone + plan contracts: contracts are rare these days. You would get a contract if you were to buy a new phone from Telstra, Optus or Vodafone and sign up for a plan at the same time. You’ll get the phone at a discounted price (hence the appeal) because the telco will make money back on your plan. But, you’re bound to that provider until the phone is paid off.

Pay As You Go (PAYG) plans: these plans suit occasional phone users. You can buy a certain amount of data and talk/text minutes, and only renew once you’ve used them up.

How to choose a phone plan

Comparing phone plans means looking at three factors:

The cost per month: make sure you choose something you can afford each month. Look for new customer discounts and special offers.

The amount of data: you want to have enough but not pay too much for data you don’t use. It might take some trial and error to work out your average data use per month.

Any extras you might want: most plans are pretty basic, but some do come with extras. For instance, you can add data roaming to some plans for an extra fee, so you can take your phone overseas easily. Others have limited talk minutes to international countries.

Using our “getting started” quiz

To help you get started, we’ve created a quiz that pinpoints the plans that could suit the way you use your phone, and your budget.

Just always make sure to read the fine print before you sign up, so you know what you’re getting. For help activating your SIM, see our guide here. But, it’s a simple process and the instructions will come directly from the plan provider you choose.