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?
Traditionally, 12 month contracts were 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
Most people don’t check and change their phone plan more than once a year, anyway. If that’s you, don’t fear the 12 month contract. You’ll get much more data at the same spend levels and often, some perks thrown in.
- 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.
This Month's Hot Offers
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.
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.
- 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 spend on a SIM Only month to month plan will get you between 50% and 100% less data per month.
- They match people’s real buying behavior:
The reality of this situation is that most people don’t have the time to compare phone plans and change phone companies every few months. This is one of the critical features of 12 month plans which is overlooked. If you know in your heart of hearts that you are not going to compare phone plan features and move providers more than once a year, then you may as well get the benefits of signing a 12 month agreement.
- These plans open up entertainment options:
Entertainment on phone plans is a huge focus area for the big phone companies these days in their search to justify their pricing. 12 month contracts are likely to include more of these value added services. It’s simple math. The phone company know they can rely on your custom if you sign up to a contract and they will invest more in keeping you around.
- These days you get international minutes with these plans:
Signing up to a contract doesn’t just increase the amount of data you will be offered as part of your phone plan. It gives you other advantages, too. Most of the plans we feature from the big 4 telcos on this page have International Minutes included. (Vodafone offer international minutes as an option in their 12 month contracts, which reduces the amount of data provided at a price point, if selected.) For Australians, as happy citizens of one of the world’s most diverse cultures, many of whom still have families overseas, international minutes can be a useful feature.
- You can share data between these plans:
Optus and Telstra both offer the chance for users to share data between users on their plans. Sharing data is not (yet) an option on any prepaid plans in Australia.
- Data deflation:
The major reason that most people don’t take out one of the available contract option for their SIM Only or prepaid plan is that they’re locked in on inclusions. As we have seen in other articles the phone companies increase the data inclusions their plans have regularly. They typically add between 50% and 100% per year to your month to month plan inclusions.
Even the best 12 month contract SIM Only plans tie you in for a year on the same data allowance.
- Unforeseen moves and phone plan announcements:
In the weird world of phone companies, one never knows what will happen next. It is not beyond the realms of reason that something innovative which appeals to your needs will come out while you’re under contract. If it does, you won’t be able to move. Take the recent announcement of children’s plans as an example or Boost Mobile’s plans with extra data on the weekend.
- Your usage is increasing:
These factors amount to being ‘trapped’ when you take a contract out. We’re used to contracts obliging us to particular terms for short periods of time, like a year or two. We see it with credit card introductory offers and rental agreements. Phone contracts seem to fall under the same umbrella, right ? Sorry, but that’s not the case. The difference between the agreement you have with your phone company and these other commercial entities we’ve mentioned is that your usage behavior when it comes to data is changing rapidly. Typically people use twice as much data at the end of each year as they do at the start.
Postpaid | 12 month contracts | All Networks 3G and 4G
With†a 12 month contract you’ll get :
- A choice of phone companies and networks:
There is a great deal of variety available to you both†with options on both†the phone company and network you need.
- Better data inclusions for the same price as you’d get on prepaid:
Phone companies reward your commitment with bonus data.
- Would you even check your plan in the next 12 months anyway?
If not, you may as well take the extra data!
Telstra 12 Month Plan
- Telstra Pre-Paid Max 12 Month $300 = Unlimited calls & SMS in Oz + 150GB.
Boost Mobile 12 Month Plans
Summing up the best 12 month SIM Only contract options
12 month SIM Only plans are like agreeing a fixed mortgage with your bank. The rates are better but then you commit to a period, during which you can’t leave, when a better rate may be announced – understanding that if it is, you won’t be allowed to use it.
These 12 month plans are popular. They are starting to feature in our top 12 plans section month on month, alongside the usual popular prepaid suspects from Boost Mobile.
When it comes to 12 month agreements, the summary is a simple one. We think it is hard to go past Kogan and their plans if you are a fan of the Vodafone network. Weirdly, they’re prepaid contracts, two terms that, until Kogan launched them, had never been used to describe the same thing before.
If we offer one word of caution, with these SIM Only 12 month contracts, it would be to consider your data usage. As we’ve seen above, the phone companies are trying to tie you in to agreements with the lure of a lot of data. In some cases, that means you’re offered so much data you might never use it all in a single month. And there is always the risk that something incredibly funky will be launched in the next calendar month and you won’t be able to get it because you’re committed.
The counterpart to that risk is the satisfaction of knowing that you’re getting some incredible value if you sign up and that you’re doing something sensible. Most people simply do not have the time to compare plans more often than that.