What is a 12 month SIM Only plan?
A 12 month SIM Only plan is one with a minimum contract term of 12 months. Each month is paid for individually but the phone companies get your comittment that you’ll be with them for a year.
In exchange, you get a range of ‘extras’, often at extremely good price points. Often, data inclusions are twice, per month, what you’ll get on phone company postpaid month to month agreements, or if you had spent the same amount on a prepaid plan.
What if I want to leave before the end of the contract?
When you sign up to one of these 12 month contracts, you’re agreeing to stay with the phone company you select for a year. You can get out early but you will have to pay the MTC (Minimum Total Cost) associated with the SIM / Plan.
How often should I check my phone plan against the competition?
We ran some research recently which showed that most people check their phone plan less than once a year. If you’re one of these people, 12 month plans are great. They’re set and forget, at least until this time next year, you get more data and bonus extras in the plan and, you weren’t going to move phone companies anyway.
Are 12 month SIM Only plans prepaid or postpaid?
Strictly speaking, 12 month contracts are postpaid plans only. That means you use the service first and then pay for it (plus any additional costs you’ve incurred – for example, roaming) afterwards.
However, recently, some phone companies have been offering prepaid plans with a 365 day expiry. These prepaid plans are paid for annually in advance – which can be a big cost to swallow. These aren’t actually contracts per se but they do much the same thing, so we’ve included them on this page.
What is an MTC (Minimum Total Cost?)
A Minimum Total Cost is the guaranteed payment you promise to make the phone company. MTCs are a feature of all contract phone plans, including 12 month contracts.
If you’re on a $50 per month 12 month contract with Telstra, for example, your MTC is $600. That’s 12 x $50 per month.
What is a ‘365 day expiry’ or 365 day prepaid term?
An ‘expiry period’ is simply the time for which your prepaid plan will work, without you paying any more money for it.
Some prepaid plans can now be bought 12 months in advance – that means they have a 365 day expiry period. Because you pay up front for the full year, your expiry period is 365 days. Don’t worry though, your voice, SMS and data allowances will renew every month.
We have some examples of this type of plan, in the article below.
- 50%-100% more data than month to month plans at the same spend level
- Set and forget - no need to worry for another 12 months
- Now prepaid plans are available with 365 day temrs
- More International Minutes at the same price
- Consider smaller phone companies for even sharper pricing
- Not quite as flexible as month to month postpaid plans
- Minimum Total Cost can appear scary
- It can be hard to know where you'll be and what you'll need 12 months from now
Everything you need to know about Australia’s best 12 month SIM Only plans – in 60 seconds
- Optus, Telstra, Vodafone and many smaller phone companies all offer 12 month SIM Only contract options.
- 12 month SIM Only plan options offer data allowances which are 50%-100% bigger than you’ll get with the same monthly spend on a month to month plan. See charts and infographics, below.
- 12 month contracts also come with a Minimum Total Cost (MTC). (We explain what that is and some of the problems MTCs presents, below.)
- Generally, 12 month SIM Only agreements work for people who don’t have time to check how competitive their phone plan more than once a year. That’s most people.
- We explain how this works, below, under the ‘Data Deflation’ section, also below.
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The best 12 month contract SIM Only plans in Australia
12 month SIM Only contract plans are dis-proportionally popular among the people who shop and buy on this website. The reason isn’t hard to see. Pick the right 12 month SIM Only contract option and you can win yourself a huge data allowance – a data inclusion which will give you a monthly entitlement often twice what you will get for the same spend on a month to month agreement.
We often recommend prepaid plans, a different type of SIM Only agreement (in fact, you can read all about these different types in our prepaid vs postpaid vs month to month article ) 12 month agreement plans tend to include unlimited voice and SMS for use in Australia, some sophisticated SIM Only plan options like easier roaming, the ability to share data between plans, say, in a family and, these days, even streamed entertainment services to your phone.
They do, however, tie you in to a Minimum Total Cost (we explain that below) and focus on ‘upselling’ you to a higher price point than you might otherwise have spent with huge data inclusions.
We love 12 month SIM Only plans because they work in a way that people actually behave. Most people don’t have the time to check their phone plan more than once a year. This can expose buyers to data deflation.
You can only really get 12 month SIM Only plans from the bigger telcos in Australia. Optus, Telstra, Virgin and Vodafone. Generally we find that Virgin and Optus offer the best value among those providers. With recent improvements in the quality of their networks, that makes Optus and Virgin a safe bet, whatever your spend level.
What is a Minimum Total Cost (MTC)?
The MTC (Minimum Total Cost) plan feature has to be the most commonly misunderstood plan component in Australian telco.
- What is an MTC ?
An MTC is a legal term used a lot by phone companies in their literature and documentation relating to contracts. By law, they have to show the Minimum Total Cost of any agreement you sign up to alongside the monthly spend. That’s so you know what you’re getting yourself in to overall. It’s kind of like an APR in financial terms. It’s a single number which you can compare equally across the phone companies to shop for the best deal.
- What it is not:
A minimum total cost is not the maximum you will pay. It is a limit of a sort. It is the absolute least you will pay for the service you’re getting from the phone company. It’s a floor, not a ceiling. If your minimum total cost is $480 (say a 12 month agreement on a $40 plan) you could end up paying $500 or even $1000 (in theory) for the service over that time.
The money you’re charged on top of the MTC are for elective services. They’re plan options, offered outside the ‘core’ of the service, which you might be charged for. These can include extra data, roaming fees and, in some cases, things like Voicemail. Check the specifics of your plan so you know what’s included in that MTC.
- You’re tied in:
You are obliged to pay that minimum. This time, they mean it. They mean it to the point that, if you want to leave the phone company you sign the 12 month agreement with, early, you may have to them the remainder of the MTC – here, $480. Getting out of your agreement can be difficult when you are in contract. That means you may even have to buy your way out of the contract if you really want to leave, something usually only applicable to agreements which included a ‘free’ phone.
What’s good about 12 month SIM Only contracts ?
- Bonus Data:
The nature of the SIM Only plans we’re discussing on this page is that they tie you in to a spend / data allocation agreement. For the phone company, the deal can be just as sweet as the deal you get. They want to tie you in so you can’t leave (they call that ‘churn’) and they want to move you up to spend as much as possible with them (they call that ‘ARPU’ – the Average Revenue Per User.) You will see from each of the examples we’ve given on this page that the phone companies are visibly enticing you to them by each focusing on a single price point with a ‘headline’ data inclusion which will get your attention. Optus at $40 per month (MTC $480) offer a staggering 10 GB of data. That’s pretty much the biggest allocation in the Australian market at the moment. Virgin, similarly, highlight the $50, 12 month price point offering 15GB ! Incentivizing people towards spending more in exchange for data they may not even use is the kind of very smart thinking that gets people promoted in phone company marketing teams.
- You get prepaid and postpaid options:
Kogan Mobile have a series of 12 month prepaid plan options which offer you the best of both worlds. They are prepaid in nature – so you get all the benefits of prepaid plans but by committing to the spend in advance and for a year, you’ll get the enormous data inclusions that this kind of agreement provides.
- You get better value than paying for each month:
As you will see from the charts in this page, an equivalent s