What is a prepaid plan ?
A prepaid plan is a set of charges and entitlements attached to a SIM which grants you access to one of the phone company networks in exchange for a fee. Users don’t need to pass a credit check to get a prepaid service. The defining features of a prepaid plans are :
- Users pay before they use a prepaid service :
With prepaid plans you pay for the voice, SMS and data you are going to use in advance. Paying for the service is often in the form of a ‘recharge’. Once recharged, a prepaid service is said to have ‘credit’.
- You are buying access for a period of time :
Prepaid users buy access to their prepaid service over a chunk of time. That chunk is usually 28 days of service but can be 1 day or 365 days. The time they have access to the prepaid service is known as an ‘expiry period’ – a term we define below.
Rather than a single plan, ‘Prepaid’ actually refers to a range of plans all of which share the ‘pay in advance’ and ‘access for a period of time’ features. There are a variety of prepaid plans on offer in Australia from some which last a day to some which last of 365 days.
Some people level criticism at prepaid, suggesting it can be inconvenient when the service runs out of credit unexpectedly. Other complains link it to budgeting concerns, which can lead people to believe it is for ‘immature’ users. We think these aspects of its reputation are unfair characterizations of this type of plan. This is especially true recently, given improvements in Self Service apps, which make checking data usage and recharging easier than it’s ever been, on smartphones.
You can find more information on each of these concepts in our article on prepaid vs postpaid vs month to month.
The best prepaid plans – a quick summary
Don’t have much time ? We’ve stripped the best of the best prepaid plans out of the tables above. We provide the key information points you need to compare, including price. phone company, voice inclusion , network, cost and, critically, the data inclusion you’ll get.
|Mobile Phone Company||Voice||Data||Network||Partner Site|
$500 of cap Voice Calls
Optus 3G + 4G Plus Network
Unlimited Voice and SMS in Australia
Optus 3G + 4G Plus Network
Unlimited Voice and SMS in Australia
Unlimited Voice and SMS in Australia
Optus 3G + 4G Plus Network
Unlimited Voice and SMS in Australia
Unlimited Voice and SMS in Australia
Optus 3G + 4G Plus Network
The variety of plans and denominations ( like $10, $20, $30 etc ) of plans that are available have made prepaid the most successful type(s) of plan on the market. Alone, prepaid represents around 45% of telco revenue. The reliability of prepaid arrangements in assisting customers manage their bills means it’s especially popular with younger users and people buying phone services from them.
How prepaid plans work – Overview
- Get a starter SIM :
To get going with a prepaid service, you need a starter SIM. You can order yours online. Ours are clearly marked in the table, above, on this page. Starter SIMs can be free, cheap or they come pre-loaded with credit ( in which case, you can skip the first ‘recharge’ step below ) in which case you’ll likely have to pay the face value of the plan when you buy the SIM. E.g. Buying a starter SIM for $30 will give you a SIM pre-loaded with $30 of credit.
- Get it delivered :
Most prepaid SIMs will be delivered to you within 24 hours from your online order. They will be provided to you in an envelope. In cities you might get your SIM faster. In rural areas, it might take a bit longer.
- Activate it :
After you have loaded the SIM card into your mobile phone and activated it, your monthly prepaid data allowance begins.
- Recharge :
You may need to recharge the service post activation if it was not ‘pre-charged’. You can recharge in a number of ways, most frequently with a bank card. Recharging will apply credit to your service which can then be used in spend against a prepaid plan.
- Use it :
From that point on, you have until the ‘expiry period’ to use all of your mobile data, texting and national calls. You will also be able to receive calls from other phone users.
- Repeat recharge at ‘expiry’:
Once you run out, you simply recharge your SIM. That means you are buying more credit on your account. This allows you to continue using the network.
How to find the Best Prepaid Plan
First, understand the terminology, especially ‘Prepaid Expiry’. Then consider whether extras the phone companies have added recently like ‘data free streamed audio’ will sway your choice. Make sure you understand the good side and the not so good side of the prepaid product. Pick a plan from the prepaid range and finally, compare the phone companies’ plans.
Step 1 : You need to know what a ‘prepaid plan EXPIRY’ is
The most important concept to understand when considering prepaid services is the service ‘expiry’.
- Every prepaid plan has an expiry :
Every prepaid plan currently offered in Australia assigned a ‘recharge window’ ( known in the industry as an ‘expiry’ to the plan. )
- It means the life of the prepaid plan :
An ‘expiry’ or recharge window most often lasts either 28 or 30 days. During that time, your prepaid allowance ( which means any unused credit on your account ) will stay active. While your account is active, you will be able to use the network services associated with your account ( for example, text / SMS, data an voice services ) and receive calls.
- When the service expires, it stops :
At the end of the service expiry, your prepaid service will stop working unless you recharge. Some providers allow you to carry data forward ( known as ‘data rollover’ ) if you recharge your service before the expiry kicks in.
Step 2 : Understand recent prepaid plan additions
Constant innovation and competition have led to a broad range of prepaid plans. In fact, prepaid plans are the majority of those sold on the Australian market. Such is the diversity available, there is almost certainly a prepaid plan which is ( at least ) close to exactly right for you.
2016 saw a genuine step forward for prepaid services in Australia with the addition of new features you can find in your 2017 plan. Some of the most important include :
- Streamed audio :
Some prepaid plans ( notably Optus prepaid ) now grant users access to free ‘streamed audio’ as part of the network services associated with the account. Music from internet providers like Pandora, Spotify, iHeartRadio, Google Music and from Telstra prepaid Apple Music is sent over the phone company network to your phone – and you will not be charged for the data involved.
- Streamed video :
OVO Mobile, an innovator in prepaid which arrives in early 2016 offer included streamed video services as part of their prepaid plans. Believe it or not, you can watch video of Australian gymnastics, V8 Supercars and Audi racing, on your phone, and you will not be charged for the data.
- Parental lock facilities :
Smartphones are essentially mini computers. Providing an internet connected computer to a child raises obvious safety concerns. Again, OVO Mobile offer free, included parental lock software in their prepaid range.
- Extra data on the weekend or out of hours :
Boost Mobile, one of the few prepaid resellers of The Telstra Mobile Network ( now with 4G ! ) provide their customers with extra data on Saturday and Sunday. Many users find this useful – the weekend is the time they are away from home. Other prepaid plans entitle you to more voice or data overnight. Telstra Recharges, for example, can be applied to their ‘Freedom Plus’ Prepaid plan range. This gives you a large entitlement of data, which can then be split between your night-time and day time use.
- Data rollover :
Optus prepaid plans offer a ‘data rollover’ facility. Data unused at the end of your expiry period is carried forward, up to a maximum of 15GB in total, to your newly renewed plan.
These facilities can save users substantial amounts of data from their plan.
Where streamed video or streamed audio is free as part of a plan, the facility is known as ‘zero rating’.
Step 3 : Figure out if a prepaid plan is right for you ?
The main benefits of prepaid services are :
- Total flexibility :
You can leave your prepaid plan provider ( your phone company ) and go to a new one the minute a new deal comes out. Unlike contracted options, Prepaid Plans offer you complete flexibility in the decision to move on to a better deal. Prepaid plans offer no Minimum Total Cost to pay before you withdraw – one you’ve decided you want to go, you can go. Remember though, whatever is in your plan that you don’t use, you’ll lose, once the ‘expiry’ period is up.
- Total predictability :
You will never, get ‘bill shock’ with a prepaid service. You can only possibly spend the value of the prepaid service you’ve bought. It’s the predictability of cost that makes prepaid a favorite for parents getting their kids a phone service. But prepaid plans are not just for children, anyone can benefit from this service feature. Additionally, prepaid services are not automatically enabled with as many services as postpaid usually are. A good example is roaming. If you want to use your prepaid phone overseas, you’ll probably have to buy a paid extra prepaid service ( sometimes called a ‘bolt on’ ) before you leave. Making conscious decisions before you spend the money is what makes prepaid predictable.
- The same networks :
Whichever provider you pick, you will get the same full network whether you buy a prepaid or postpaid service. Whether you spend $30 with a phone company for a prepaid plan or $130 for a new iPhone on a postpaid contract, you’ll get access to the same coverage, speed and 4G data , whichever network you’re on.
- Total value :
Prepaid deals are often at least as good as the postpaid alternatives on the market. This is especially true at lower spend levels. The nature of the prepaid market is that it’s more competitive. The fact you can leave when you want to means the phone companies have to fight for your custom. Prepaid services tend to be bought by deal seekers and younger customers which puts the market sweet spot at around $30 a month. Since that’s the ‘prepaid battlefield’ that’s where you’ll find the best value.
- Nothing you don’t need :
A growing number of people are keeping their iPhones longer than before. Many ( both iPhone and Samsung users ) are deliberately choosing to not renew their phone contracts when they end. The benefit to the amount they spend on their phone bill is huge. Consider moving from a contract with your phone company to a prepaid plan once your contracted term comes to an end. Your spend can halve. In fact, choose one of our recommendations, below, and you will save more than 30% on what the big phone companies will charge you.
Other benefits include :
- You can keep your existing phone number :
The most common question people ask when they are considering moving to a prepaid plan is ‘can I keep my number.’
- Keep the phone you love :
You don’t need to upgrade the phone you have to use a prepaid service. Early adopters love to have the latest phones and don’t mind paying for the privilege. Many, however, are happy with feature phones, 3G phones or a second hand phone from eBay / a family member. Your prepaid service will work in any of them. Buying a phone outright and adding a prepaid SIM to it can save you a great deal of money. Increasingly, people are keeping their phone at the end of their contract and adding a prepaid SIM to lower their costs.
- You get the same self service app :
And they’re great. And they’re especially great for prepaid users. Most of the phone companies have Self Service apps which are free, easy to use and extremely valuable when it comes to taking convenient care of your account. Take out a prepaid service and you will be given the same self service app as is available to everyone else. The primary benefit of ready access to the self service facilities you rely on through your smartphone are twofold : The ability to track your data usage in real time and the ability to recharge your account easily. The fact you can do both of these on your device is the boon. It could not be more readily available and, critically, you don’t have to call their call center to do these mainstay activities.
- Almost all prepaid plans ( certainly anything over $20 ) come with Unlimited voice and SMS :
With Vodafone’s prepaid services and Optus’ prepaid plans , you get unlimited voice and SMS on every prepaid plan. With Telstra it’s only the base level offering in which you do not get unlimited voice and SMS. There are also incredible unlimited deals from Boost ( on the Telstra Mobile Network, now with 4G ), Amaysim ( on the Optus Mobile Network ) and Lebara ( On the Vodafone 4G network. )
- You can’t be liable for someone else’s fraud :
It’s more common in the UK but it does happen here. If you have a postpaid service and you lose your phone, you’re liable for the cost. If someone makes $10,000 worth of calls before you realize your phone has been taken, you may well have to pay the bill. With a prepaid service, there is no risk of that ( or any other type of overspend ) happening. The phone company has to check with you before they take more money from you.
- It’s just as easy to manage as postpaid :
Prepaid services are bought and paid for in advance. Then they’re used for the period of the recharge window / expiry. Then it stops. It can be inconvenient if you forget that your recharge window is about to end. In rare circumstances, your prepaid service can just stop working. However, while maintaining the ability to limit the money you make available to your prepaid service, you can set it up to auto-recharge with most prepaid service providers. Then, you get all the benefits of prepaid and none of the risk of overcharging of postpaid. ( Remember, the auto-recharge facility simply adds a single recharge voucher to your plan at the end of the recharge window. It does not top up additional services. So, for example, if someone found your phone and make a lot of overseas calls, your extra credit would run out quickly but the core prepaid plan you were on would not. )
- They’re the easiest way to try before you buy :
Prepaid plans are the best way to experiment with moving to another network. Buy the cheapest plan the phone company you’re considering has, apply the minimum credit, use it for a while. If you like the network, stay. If you don’t, let the SIM die. There’s no contract to worry about and you have minimized what you had to pay to trial it.
- You don’t have to use it every day :
With prepaid plans, you don’t use it for a week or a month : With a prepaid service, if you don’t recharge, the service will sit on ‘stand-by’. That means you won’t be charged for a while. With postpaid you will be charged every day whether or not your phone was used. Be careful though. This is fine for a few days but if you leave it a few months, you can find that your phone number was ‘recycled’ ! ( and then you’ll lose it. )
- It’s easy to pick the recharge denomination you want, depending on your current, specific needs :
Recharging a prepaid service is like getting money out of an ATM. You get what you need and no more. With a prepaid service, if your usage is going to be relatively low one month, you just buy less. It’s usually far harder to move ( especially down ) plans with a postpaid service.
- You get incredible introductory offers :
The prepaid market is a battlefield for the phone companies. Because customers are not in contract, they move providers all the time. This means the phone companies have to constantly put in market attention grabbing deals to get you to switch. You’ll usually see a combination of extra data and a lower priced starter pack to get you going. These sort of deals are far less common on postpaid services.
- All prepaid plans charge data per kB these days :
There are two main ways of charging for data in a plan. Per kB or per MB. Avoiding the technicalities, it’s far fairer for users if charging is per kB. Under public pressure, Vodafone rolled back a plan move to per MB pricing a couple of years ago. The 3 main phone companies now all offer per kB charging and it is increasingly uncommon to find even smaller phone companies which do not.
- 4G data network coverage has never been better :
If you’ve got a phone that you paid more than $200 for and bought after 2011, you’ve probably got a 4G ( LTE ) device. 4G is super fast data and it’s now offered by the 3 major Australian phone companies and a number of the smaller ones. You can find out more in our article about coverage.
Step 4 : Inside the different types of prepaid plan
Prepaid is not a single phone plan, it’s a range of phone plans. Each of pinpoints a need in the Australian market. For example, long life plan is for second phone users and people who almost never need to make a phone call. There are plans for people with data usage which varies a great deal month to month (data rollover plans) and plans for people who use more data on the weekend.
Nestled within this range then, there is likely to be a plan which suits you better. The fact that there’s a range means it’s more likely you’ll find a plan which is just right for you. And that means better value and no wasted money on services you won’t need.
Prepaid offers flexibility in terms of how long you want as an expiry period. You can get prepaid plans with an expiry from literally one day to literally one year. Postpaid plans always last for one or multiple calendar months.
- Month to month plans :
These are the marketing heros that the majority of people buy. Typical tenure of a prepaid plan like this is 28 days – although you should check when you’re comparing, some of the better value companies offer 30 days.
- Daily plans :
Optus has, in it’s suite of plans, Dollar Day plans. If you will be using your prepaid service here and there but not every day, this plan will serve you well. And, if you have a super high data need, Optus $2 days will give you 500 MB of data per day – that’s up to 15 GB a month for $60.
- Weekly, tri monthly plans :
Kogan Mobile, Coles and some others offer unusual combinations of tenure to attract customers with niche needs. Weekly recharges from Coles, for example, can be useful for those who do a weekly shop and can combine the recharge with the store visit.
- There are plans you can make a couple of calls per year :
Each of the major operators has a long life plan. Typically, you can get your SIM set up to offer you a small number of calls and to stay live for 6 months or even a year.
Step 5 : Comparing Optus Prepaid, Vodafone Prepaid and Telstra Prepaid
- Vodafone prepaid is known as ‘My Mix’ :
Vodafone prepaid has been famous for many years in Australia ; the best known aspect of their service offering. In our view, however, they dropped the ball with their uncompetitive prepaid offering in 2016 ‘My Mix’. ‘My Mix’ purports to offer users unlimited flexibility in tying together the voice, SMS and data options they might require. In reality, this ‘pick and mix’ solution is a telco nightmare which pops up once every few years ( it is also, currently, offered by Yatango ) and which Vodafone have brought to market in a ham-fisted way. The plans appear overwhelming in number because of the options and, in reality, users (pretty much) get to pick only data and whether they want international calls. Vodafone also misses the point : People don’t know how much of each service they use. We much prefer Kogan Mobile who use the Vodafone 3G and 4G network.
- Optus prepaid :
Optus have reinvigorated their prepaid range with a number of new service features. They raided their Virgin Mobile sub brand for the best of their data facilities – data rollover – and applied it to their prepaid range. Additionally, Optus have enabled their entire prepaid range with unlimited free streaming audio from a range of providers which can save users up to 3GB of data a month by using it. To top it off, Optus have innovative plan structures you won’t get elsewhere like $2 Days . Add in the fact that the Optus 4G network is on a par with Telstras and you can see why Optus’ plans are so popular.
- Telstra prepaid :
Telstra claim the best network coverage in Australia. Independent reviews say that is often not the case. In practice, Optus’ and Vodafone’s 4G networks are on a par with Telstra’s. As you can see from the chart below. Telstra do offer overnight data extras which will suit some. Bizarely, their prepaid pricing is better than their postpaid pricing at low spend levels. And, to be fair, Telstra offer streamed music free as part of their prepaid plans – although, unlike Optus, they only partner with Apple Music.
Step 6 : Knowing the bad bits about prepaid plans
There are not many bad things to consider about Australian prepaid plans. If you’re trying to be thorough, however, we applaud that intent. We propose the following for your consideration.
- You won’t get a new phone :
When you take out a contract with a phone company, in exchange for a 2 year commitment, they will (often) give you a new phone. The reality is that they recover the cost of that phone in the rates they charge for the plan. There are times when it makes sense to get a phone under contract rather than buy the phone and add a prepaid SIM yourself.. In certain circumstances, usually, when they’re chasing sales, the phone company will subsidize more of a phone than they usually would and that can actually save your money over the course of the contract. It’s possible that, for some people, the up front cost of a phone would be a strong enough barrier to prevent them taking out a prepaid plan. In that situation, a prepaid plan might not be the right thing to do.
- Prepaid services can run out of credit when you need it most :
In the middle of a call to tell your girlfriend you’ve left your wallet at home, your prepaid credit runs out and you can’t recharge because, that’s right, you’ve left your wallet at home. New smartphones have all but removed this problem from Australian prepaid. Most of the phone companies zero rate access their own sites. To you and me that means that even if you have no call credit, you’ll be able to browse to your phone company’s website. Once there, using the details you have saved on their system, you’ll be able to recharge. These days, this risk applies most to people who have older feature phones and who leave their credit card at home a lot.
- If you top it up too much, you could start to suffer some of the negatives of postpaid plans :
You’ve got to go out of your way to get bill shock on prepaid plans. However, it can still happen. Users who treat their prepaid service like a postpaid service could still get hit with charges they weren’t expecting. This is best explained with an example. Imagine you buy a Lebara prepaid You go for the $29.90 plan. However, instead of charging your account with $29.90, you add $100 to your account. In this circumstance, if you use all of the data included in your plan within the recharge window you have, extra data usage will incur an ‘out of bundle fee.’ If you had only recharged with $29.90 ( what most people do ) then there would be nothing for Lebara to charge you. There would be no balance for them to decrement. In this example, however, users can be charged from their $100 balance. Our recommendation is simple. Just recharge at the end of your expiry with the value of the plan. Then there are no headaches.
Step 7 : How do prepaid plans compare to other types of phone plans?
In Australia, we’re pretty lucky. For us, the difference between prepaid rates and post paid rates are actually quite small. In some cases, especially spends around the $30 mark, you will get more value on a prepaid plan than a postpaid plan from the main phone companies. To prove the point, we wrote an article in which we compared Optus prepaid and Optus postpaid / contract plans.
Where prepaid value really comes to live is with smaller phone companies. Kogan Mobile, OVO Mobile, Boost Mobile and the rest of them who resell the phone networks offered by the Australian big 3 phone companies.
As we’ve seen above, on this page, they have brought new service aspects to the prepaid market, targeting niches and better servicing the market. They also provide better value on core inclusions like data at every price point – as you can see from our comparison ‘best of the best’ table at the top of this article.
We think prepaid is a suite of plans which offer great value and which you should definitely be considering in your 2017 plan choice.