What is a Billing Cycle?

Explaining billing cycles

Paying bills is the norm for adults. In order to access even the most basic of services — mobile network services, water, electricity, etc. — you must get billed with a fee.

A billing cycle refers to the time between the end of usage and the beginning of another round of usage. In other words, the amount of time you use the service is broken down into cycles that are billed.

For phone plans, your billing cycle is the interval of time from when each of your usage starts to when it ends, based on the cycle’s breakdown. You’ll be required to pay another fee to continue using the services provided by the network if you’re on a prepaid plan, or pay the fee after usage if you’re on a postpaid plan.

Billing cycles for phone plans are often set on a monthly basis (usually 27-30 days). However, the lengths of time that determine the cycle can vary depending on the type of product or service being subscribed to.

Are billing cycles particular to prepaid or post-paid mobile plans?

Prepaid mobile plans – also referred to as pay-as-you-go – have to be paid for before the the customer can access the telco’s network services.

On the other hand, postpaid phone plans are paid after the customer uses the network’s services. Often times, post paid payment plans are part of contract phone plans.

Typically, when the term ‘billing cycle’ comes to mind, many consumers automatically think of post-paid plans. These, however, can refer to both prepaid and post-paid mobile services.

Relevant information on billing cycles from Australia’s major telcos

Each of Australia’s telcos has its own policies towards billing cycles. Here’s a closer look at each telco:

  • Telstra
    Telstra customers are assigned a specific date every month when the billing period will begin.  No matter the plan or service, the billing period will always begin on that specified date for that customer.Simply put, if you were to connect to the Telstra network and your assigned billing day were the 6th of every month, your billing cycle would last from the 6th of Month One to the 5th of Month Two. On the 6th of Month Two, your next billing cycle would start, and so it goes.
    A Telstra bill.A sample of a Telstra phone bill. The bill highlights key aspects of a subscriber’s bill breakdown, including due dates and cycle period. Source
    When a phone bill is issued, the network will allow the individual approximately 14 days to pay the bill. If the balance isn’t paid, access to the service will be lost. It’s important to note that the date the bill is issued neither marks the end of the billing period nor the due date.Typically, the charges and payments a Telstra subscriber can expect to see at the end of each billing cycle are:

    • Phone usage (calls and texts);
    • Any one-off (non-recurring) charges during the billing cycle;
    • Recurring charges billed a month in advance (prepaid services); and
    • Any payments made towards your previous invoice.

    Telstra also offers part month charges. Part month charges – also known as Pro Rata Charges – occur when you start a new mobile plan or service while on a scheduled billing period. These are one-offs and charges are only made based on the days the service was utilized.

  • Vodafone
    Similar to Telstra, when you connect to the Vodafone network, you’re assigned a start date for your billing cycles each month.With Vodafone, however, your ‘due date’ can differ from the beginning of your billing cycle. Here, your ‘due date’ refers to the maximum date by which payments for the service must be made before the individual is revoked access. Typically, the due date is around 14 days from the date the bill is issued. Bill extensions can also be requested.
    At Vodafone, subscribers can check their billing dates through the My Vodafone website or simply dial 1512 from their Vodafone cell.
  • OptusA sample of a phone bill as issued by Optus to a subscriber.                        An example of a phone bill issued by Optus via its email platform. Source

    At Optus, subscribers are given the option of receiving their bills via email or regular mail. For the purpose of this article, the bill summary on emails will be the prime focus.Similar to Telstra and Vodafone, the due date is the maximum date by which payments must be made before services are cut off completely. As shown in the invoice above, the due date is approximately 14 days from the beginning of the billing cycle.

What happens if I exhaust my allocated services before my next billing cycle?

In many cases, individuals may exhaust certain aspects of their phone plans – predominantly data – before their next billing cycle. This happens quite often. Thankfully, mobile operators have solutions for situations like these. Subscribers can either let their data expire and incur ‘overage’ charges or buy more data before their current data plan is exhausted.

It is advisable to buy more data before your data plan is exhausted as ‘overage’ fees are often very steep. Some telcos now offer plans that throttle your data speed instead of charging for overages, which essentially allows you to stay connected for as long as you’d like until your next billing cycle restarts your data inclusion.

Final words

A billing cycle is the stipulated amount of time from your current phone usage and the next. You enter a new billing cycle when the old one has elapsed, in order to keep enjoying the network’s services. Typically, when the term ‘billing cycle’ comes to mind, many subscribers automatically think of post-paid plans. These, however, can refer to both prepaid and post-paid mobile services. A quick look at major Australian Telcos reveals that they mostly handle the billing and payment cycles in similar fashion.

Sources

 

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.