SIM Only (also known as BYO – Bring Your Own – Mobile) used to be the best kept secret in telco. Now SIM only plans are some of the best sellers in Australia’s Smartphone plans market andnow make up two thirds of phone company business. If you’re looking for a great value deal on calls + data and you already have have your own device, well read on. You’ve hit the jackpot.
SIM Only is the second largest type of BYO plan, after Prepaid.
WhatPhone September 2017 Survey & What It Means For SIM Only Plans
- SIM Only plans are an easy, flexible way to save money on your phone tariff.
- They’re such a sensible choice and represent such good value that they are taking over.
- Today, the majority ( around 60% ) of people have a SIM Only plan from their phone company.
- SIM Only plans provide access to the phone company’s network services.
- Network services are the data, voice, SMS, international calls and other phone company services you need to use your phone.
- There are different types of SIM Only plan : Prepaid, Postpaid (included on this page), and PAYG.
- We explain each of these terms below.
- SIM Only plans rarely have contracts. They are extremely flexible agreements.
- You can usually change the plan you’re on at the end of each month.
- Or, you can move to a new phone company whenever you want to.
- Even if you’re buying a brand new phone yourself and adding a SIM to it, you can save a lot of money.
- We often suggest SIM Only plans from smaller phone companies ( also known as MVNOs ) because they’re so much better value.
- There are some changes coming in Australia which are likely to make SIM Only (and eSIMs ) an even bigger part of the market.
The basics of SIM Only plans
We’ll introduce you to the basics of SIM Only plans here and then show you the results of our SIM Only survey.
SIM Only plans are often the quickest, easiest and cheapest way to get a phone service from a phone company. There are some basic questions that come up about SIM Only plans all the time. Almost everyone thinking of buying a SIM Only plan asks the same things. We have tried to answer them here.
- What do SIM Only plans give me? :
This sort of plan offers you a connection for whatever device you have to the phone company network. Importantly, you get access to the network without buying the phone itself from the phone company. Access to the phone company network gives you the use of voice, text, data, international calling, and any other ‘network services’ you need.
- So where does the phone come from then?
To use a SIM Only deal, you’re going to need to already have a phone. Pretty much any phone you have will be fine. If you have been given a phone by a family member, bought one on eBay or took it out of a cupboard, that’s fine. SIM Only will provide you with what you need.
- How do SIM Only plans work? :
Put the new SIM in your existing phone and you’re done. There are sometimes a few small configuration issues to take care of. For example – setting up a data ‘APN’ on the new network you’ve joined. If you hit any snags in doing setting your phone up with a SIM Only plan, don’t worry. Your SIM Only agreement entitles you to call the phone company’s support team, just as if you’d bought the phone from them.
- Do I need to unlock my phone :
If you bought your phone ( the one you’re trying to put this new SIM into ) under a contract from one of the phone companies, you might have to give them a call to unlock it. We explain more about unlocking phones in this article.
- Can I keep my existing phone number if I take this sort of plan? :
Whether you’re buying your phone outright or taking a SIM Only deal – you can keep your existing phone number.
- Why are SIM Only plans called different things e.g SIM Only / BYO ? :
SIM only plans are also known as BYO mobile by some phone companies – mostly Virgin Mobile. It’s crazy in our view. There is enough confusion in the market for phone services already. SIM Only and BYO are exactly the same things.
- How long will it take to move phone companies? Will I be without my phone number/phone service for long?
No ! You won’t be without either your phone number or phone service for long at all! The major constraint to moving is porting your phone number which usually takes only 2 hours. The absolute most you’ll be without a service is 2 days. I move around a lot and the most I’ve been without service is 4 hours.
Why choose a SIM Only / BYO plan?
The primary benefit of a SIM Only plan is flexibility: SIM only plans offer users the flexibility to change plans as often as they want.
Now you know about the different types of SIM Only plan. You also know the financial reasons some people decide to buy their phone outright and add a SIM to it later. We can now move on to the benefits of having a SIM Only plan. The primary benefit of a SIM Only plan is flexibility : SIM only plans offer users the flexibility to change plans as often as they want. This flexibility comes in many forms. The reason it’s so much simpler is that there is no phone to consider. You’ll find the flexibility manifests in a number of ways – most of which you won’t be used to receiving from a phone company.
- Flexibility of plan:
Most providers let you move up and down plans very easily, whenever you want to. For example, if you’re on a SIM Only plan at $30 but you find you consistently use more of your inclusions than you have at that price, you should be able to move to the $40 at the end of the month with a penalty. The same is usually true of a move the other way. (So long as you’re not under contract.) So, if your usage requirements rise with time, or decrease, you’ll be able to flex without penalty.
- Flexibility of provider:
Since most people are not tied into a contract on a SIM only plan, they are not locked to any particular provider for more than 30 days. If your existing phone company overcharges you, annoy you with their customer service or, something simple happens like you see a better deal in the market, you’ll be able to change your provider at the end of the month you’re in.
SIM Only users can move around to new companies when they launch. Australian telco is, believe it or not, a dynamic place. Phone companies are always being added to the market.
How does a SIM Only plan save me money?
At a high level, when you get into an agreement with the phone company, you have a couple of different options. First, you can buy a phone under contract with the phone company. They’re typically 2-year agreements. You’ll get a phone thrown into your tariff.
The other option is buying the phone yourself, outright and adding a SIM to it. You can save a lot of money if you get the maths right.
This is such an important subject, we’ve covered it in a great deal of detail. We even conducted a survey of 500 Australians and their habits. What we found will help you find the right SIM Only plan. We asked them 8 questions :
1. How long have you owned your phone ?
We asked : “How Long Have You Owned Your Phone?”
In our survey of 500 Australian phone users, more than 30% of people have held on to their phone for more than 2 years. That could very well be the reason you are on this page. When you’ve been in possession of your phone for 2 years almost everyone is out of contract and in a facility to pick up a SIM Only plan.
Research suggests that the average amount of time people are holding on to their phone is increasing around the globe. That’s true in Australia, too. The average length of time people keep hold of their phone is now 29 months (up from 24 months in 2015) and it’s rising fast. Many people now ‘wait until it stops working’ before they shell out for a new one.
Our survey suggests the same thing. 30% of people have had their phone longer than the critical 24 month juncture.
Reasons people are holding on to their phone longer :
- New devices are not that impressive :
Plateauing specification improvements and rising device costs mean people are making the best of what they’ve got for longer. It appears that phone manufacturers have used up all their good ideas. Every hero product now has the option of a bigger screen size. Most are waterproof. Alongside the dearth of exciting features in new phones is the other side of the coin. What is being brought to market now are expensive: The 2017 iPhone was the most expensive yet. So was the April 2017 Samsung’s Galaxy range. It could be that, until the launch of 5G, there is no compelling reason to upgrade.
- The proportion of contracts sold is diminishing :
In the old days, most people picked up their new device under a 2-year contract with one of the main phone companies. Some estimates suggest that the number of phone contracts sold in the next 2 years will halve from around 20% of the market now to around 10% of the market in 2 years. Typically, when a phone gets to the end of its contract, the phone company which provided it to you will contact you and offer you a ‘free’ phone if you upgrade. Without contracts, there is no prompt of a ‘perceived need’ for a new device.
- Cheaper alternatives :
Many people just want a phone which does the basics – whatever that means to them. For some, a feature phone may be fine. There are smartphone options from $200 from the Post Office. For these people, there is no need to upgrade every couple of years. Their expectations are low and they don’t want to spend money in this way.
What this means to you :
The key implication of this news for those in the market for a SIM Only plan is the freedom to move provider. The 30% of people who have held their phone for more than 2 years, those who have bought a cheaper alternative, those who chose to buy outright instead of a contract have a suite of SIM Only options available to them. They can all move phone companies when and where they want to, to ensure they always have the most competitive SIM Only plan.
2. Which Type of phone do you own?
iPhone users, together, make up the largest part of the Australian phone market (42%). This is an important finding. The type of phone you have will influence how you use your phone and, as a result, the type of SIM plan you need.
- iPhones use more data :
Generally, iPhones use more data than any other type of phone. Users describe them as more engaging devices that are easier to use. Both factors encourage longer browsing sessions and the device to be picked up more times each day. We cover some iPhone data recommendations on our dedicated iPhone page.
- Bigger screens use more data :
The bigger your screen, the more data you’ll use. Since the iPhone 6, Apple users have had the option of bigger screens. Some Samsung devices (for example, the Galaxy Note series) are also renown for the size of their screen. You need to consider bigger plans if your phone fits this bill.
- 4G phones use more data :
Almost all phones sold new are 4G. However, if you’re one of the people from our survey who own an older smartphone or feature phone, you’ll need a plan with less data. Consider PAYG plans for this type of device.
- Phones with faster processors use more data :
Every new device release has a new processor. (A processor is the part of your phone which does the thinking and makes your phone do what it wants to.) Very often the speed of the processor affects how quickly the phone can ‘drawdown’ data from the network. Newer phones have faster processors and use more data.
What this means to you :
The type of phone you own can make a big difference to the data requirements you have. Consider the guidance we offer above on the factors that will influence the usage. You might also like to check out more information on data plan recommendations below on this page.
3. What did you do with your old phone
We asked : What Did You Do With Your Old Phone ?
There are nearly $10 billion AUD worth of old mobiles in Australia. In total, more than 150k iPhones are sold on eBay Australia each year. Who says the resources boom is over?
The smartphone market is saturated and, as we’ve seen from the above, people are holding on to their phones longer. Incredibly, phones lose their value quicker than cars (in percentage terms). When you sell your phone ( time of year, time of month), how quickly you want to sell them (how many days you’re prepared to wait to get the money), what brand they are (Apple phones hold their value longer) all influence the price you’ll get for your old phone.
It can be sensible to hold on to your old device, to use as a spare. We do advise the following.
- Consider selling it :
Old phones can be sold for good money on eBay or Gumtree and the proceeds applied to your SIM Only Plan.
- Consider using it :
The list of alternative uses for expired devices is also long and growing. You can use last years phone as a remote control for all your in-house entertainment equipment, a security camera in your home, you can strap it to your bike and use it as a trip computer or so on.
What this means to you :
Your old phone is an opportunity. For some, it will make sense to keep their old device as a backup. Many are just wasting previous years’ hardware. Our suggestion is that you, do something useful with them.
4. How much data do you have on your plan ?
We asked : How much data do you have on your phone plan, each month, at the moment ?
Data is the most important thing in a phone plan these days. The key thing to remember when you’re buying your plan is that your data usage is rising every year.
The range of answers people gave in our survey, to this question, indicates the problem with recommendations you see on many sites, telling you what the average data need is. Telling visitors to this site what the average users should do about their data needs is misleading. The mean average data plan chosen on our site at the moment (late 2017) is about 6GB. As we can see from the chart, however, there are people who use a great deal less and a great deal more than that in their plan.
What does that mean to you?
So how do you work out your data needs? We offer advice on how to establish your data usage, to help you find the right plan in this article.
Data Price Deflation and SIM Only plans
Data price deflation is an ongoing general reduction in the price of data. You might not be fully aware of it but it’s been going on around you for years. Where once you paid $30 a month for 300 MB of data, you can now get 3GB or more in a plan, for the same monthly spend.
This is one side of a critical balance you need to strike when considering a phone plan. The amount of data that people are using increases each year: Cisco ( the data and networking people ) say that data use on mobile phones, in our region, is growing about 80% per year. That’s huge. It means that if your phone plan comes with 1GB of data when you buy it, you’ll need something like 3GB or 4GB by the time your 2 year contract ends.
That means if you manage your plan well, you will keep spending the same amount. If you don’t manage your spend well, you will end up paying more.
- Consider 2 individuals, Matt and Mel. Matt has his iPhone under a 2 year contract with Optus.
- Mel bought hers outright. She now has a SIM from a smaller phone company. Over time, both Matt and Mel use more data.
- However, because Matt is bound by his iPhone agreement, the amount of data he gets is set for the 24 months of the contract.
- His contract includes 2GB of data which is fine for the first year. But, in the 2nd year, he soon as to pay extra each month to cover his rising data use.
- Mel on the other hand has been a bit smarter. Over time, the amount of data the phone companies provide their users increases. It happens irrespective of phone provider or spend level.
This phenomenon is called ‘data price deflation’ and it’s the reason you should never buy a phone under contract again
5. Where did you get your current phone?
We asked : Where did you get your current phone?
Remember, this answers to the question we asked, graphed here, relate to the phone people hold now, not the one they’re intending to buy their next phone.
As well as changing how we shop, mobile phones are changing where we shop. The change in the type of place people are buying their phone is one of the key things influencing the SIM Only plan market.
- People’s phone buying habits are changing :
Research suggests that buying phones new from both online outlets (e.g. Mobileciti) and High Street Retailers is growing fast, especially for Android users.
- This is what’s driving the SIM Only market :
These phones are tied together with SIM Only deals to save money.
What this means to someone buying a SIM Only plan :
Where you buy your phone actually has a significant influence on the way you look at your device over the next 2 years. Buying from the high street, even Apple’s mothership stores, means you’ve bought your phone yourself. That leaves user independent of the phone company and able to buy a SIM Only plan and move anytime they want.
6. What’s the best way to minimize the cost of your phone over the course of it’s life ?
We asked : What’s the best way to minimise the cost of your phone over the time you own it?
8 out of 10 people are paying too much for their phone an bill. As we have seen in some parallel WhatPhone research, about 30% of us have been charged more for data in the last month.
The good news is that 50% of people realize that a small amount of maths is involved. The bad news is that 20% of people think their best option is a contract with their phone company.
What this means to you :
Doing the maths to figure out how to minimize the cost of your phone plan is actually easier than you might think. We have a couple of real-life examples of how to do it on this page.
- Working out the cost of a phone contract :
- First, pick the phone you want. Make a note of the manufacturer, memory, and color you’re interested in.
- Next, figure out the amount of data you need. Here’s the link again.
- Now, go to the phone company you’re interested in – say Optus – and find the cost of the handset (with the data you need) that you decided was right for you.
- Most phone companies either offer the phones they have on a 2-year contract or give you that option. Find the cost per month and multiply it by 24 months.
- The comparison :
Working out the cost of the alternative – buying the handset yourself and adding a SIM.
- To get the cost of the handset you want, go to Mobilecity and find your device in the right color and with the right amount of memory.
- Now, select a SIM Only plan. You can do that using the table on this page. It’s possible to filter your options based on the amount of data you need in your plan if you’d like a shortlist. You might like to also check the network is the same. There are several smaller phone companies which resell the Optus network. Find a plan which has the data you need.
- Now, multiply that plan price by 24 ( so you are comparing fairly with the 24-month contract alternative you have. ) and add the cost of the device.
- You’ll almost always find that buying a phone yourself and adding a SIM is the cheapest option. As you can see from the examples on this page, you can save between 10% and 30% over the course of a 2-year agreement.
7. When did you last compare your Phone plans costs and features?
We asked “When did you last compare your phone plan’s cost & features?”
The most common answer we received to our question was ‘I can’t remember’. Here, the type of phone that was being used also influenced the answer in our survey. iPhone users, for example, generally had not compared their plan ingredients for a longer period than Android users.
The problem with comparing phone plans is that most people suffer from a lack of knowledge (and interest) and are presented with too much information. There are literally hundreds of options to compare.
Worse still, the phone companies deliberately muddy the water with decoy pricing and plans which create the wrong impression. We saw at this year’s iPhone launch some ridiculous data plans of 100GB of data per month. That’s far more than anyone would actually use on a mobile. Unfortunately, for the uninitiated, it creates the impression that 100GB might be required.
It must be said, however, that we received a range of answers to this question. More than 30% of people had compared in the last 12 months.
What this means to you :
We have to be realistic here. You can’t compare your phone plan every weekend. Aiming for an annual health check is likely to be useful, given trends in the rise of the amount of data people and using and the reduction in the costs of it.
8. Would you consider buying a lesser known brand?
We asked : Would you consider buying a phone plan from an unknown / lesser known brand if it was cheaper and offered the same service and benefits?
According to our survey, around 45% of people would consider buying from a smaller phone company (those with lesser-known brands.) There are a lot of misconceptions about smaller phone companies. Just yesterday, someone told me they thought that, behind the scenes, everything ran on Telstra’s network ( that’s not true. ) Others have told me they believe that if you take a SIM from a smaller network provider, it will be slower or get ‘de-prioritised’. Neither of these (or the other misconceptions we hear) is true!
This survey answer, too, is a key finding. Smaller phone companies often offer better SIM Only deals than those available from the ‘tier 1’ phone companies we’re used to. Importantly, they tend to provide more data at a lower cost.
There are some basics to be aware of here. To realistically consider these plans as a viable alternative to the one you’re on, you need to be able to move providers. That means you need to be outside a contract and prepared to spend a few minutes researching.
What this means to you :
In a way, picking a SIM can be a bit like going to the Aldi supermarket. The smaller phone companies are like big brands only they’re cheaper. Include one of their SIM plans in the calculations we’ve outlined above and see how much you’ll save.
Why lesser known brands offer the best SIM Only Deals
In our view, network resellers ( also known as MVNOs ) offer the best deals. There are MVNO options on each of Telstra, Optus and Vodafone’s networks.
In our view, network resellers (also known as MVNOs ) offer the best deals. There are MVNO options on each of Telstra, Optus and Vodafone’s networks. Network resellers are smaller phone companies which don’t own their own telecommunications network.
Generally, we advise our visitors to choose one of these smaller phone companies. They’re also known as MVNOs. MVNOs are Mobile Virtual Network Operators. These companies rent their network access from the major phone companies like Optus, Telstra and Virgin Mobile. Then they resell that network to Australians and they (usually) provide much better rates for access than you’ll get from the major players.
How can MVNOs save you money
MVNOs save their customers money by leasing network access ‘in bulk’ from the three, major Australian phone companies. Then they sell it, to customers like you, at a significant discount.
With MVNOs, you can take advantage of lower rates, and SIMs that are contract-free. They almost always offer better deals than the major phone companies. They don’t have the same marketing spends to pass on in the costs they charge you. They don’t spend nearly as much on advertising their brand as the others. By keeping their business models simple, they reduce the support costs and pass the savings on to you. They also need to charge less because they’re not as well known as their multinational competitors.
By keeping their business models simple, MVNOs reduce the support costs and pass the savings on to you in their SIM Only plans.
It’s important to realize that the network coverage component of the ‘product’ the MVNOs sell is very often exactly the same thing being sold by Optus or Vodafone. The coverage you’ll get from an Optus MVNO is exactly the same as the coverage you’ll get from Optus itself. There are a few exceptions and ‘gotchas’ to think about. We’ve covered those in detail, below.
Myths about MVNOs: Prioritization
Some shoppers suspect that MVNOs are getting low-quality network bandwidth. For example, minutes that aren’t used by carriers during peak activity. That’s just not true. In many ways, network access is like electricity. It’s a utility which is the same whomever or whichever company you buy it from. You will not get a lower priority on the network if you go with an MVNO.
Why are MVNO deals cheaper?
The MVNOs marketplace is highly competitive. The competition is focused where you want it. MVNOs have an agreed charter with the major phone companies. Each MVNO is set up to focus on servicing (selling to) a particular segment.
Different types of SIM Only plan
Within the SIM Only family, there is a lot of choice. There are many different types of SIM Only plan
Within the SIM Only family, there is a lot of choice. There are many different types of SIM Only plan. The most common are prepaid and postpaid SIM Only plans which are usually just called SIM Only plans. Less common are PAYG ( Pay As You Go ) plans and contract agreements.
Below, we have explained the differences between the different types of SIM Only plans that are available. If you’d like more detail, we have it here.
Prepaid SIM Only Plans :
Prepaid SIMs used to be the realm of the teenager. Now some of the best SIM Only pricing you’ll find is on a Prepaid Plan. I use one myself.
In prepaid agreements, the user has no more commitment than what they’ve spent on their initial SIM or a recharge. Customers pay at the start of the billing period with prepaid. You then use the network services within the entitlements of the plan, for a specified period. One example might be ‘Unlimited Calls and SMS in Australia for 30 days.’ When the time period for the plan and entitlements is up, you ‘recharge’ your service and start the time window once more.
Prepaid SIMs used to be the realm of the teenager. Now some of the best SIM Only pricing you’ll find is on a Prepaid Plan. I use one myself. Prepaid offers feature that other plans don’t. One obvious one is that if you are not going to be using your phone for a while, you don’t have to recharge until you need it.
If you’re aiming to spend $30 or less, prepaid should be your first port of call. With the major phone companies, at the $30 price point, you’ll get better inclusions than if you took their postpaid equivalent.
There are providers out there who only offer prepaid plans. And their value is often incredible. For example, Lebara has unlimited plans with huge data inclusions. And Boost offer 4G access to the Telstra Mobile Network cheaper than anywhere else you’ll find on this site.
Postpaid SIM Only agreements ( also known as ‘SIM Only’ ):
At the other end of the spectrum are postpaid SIM Only agreements. The name of these is mostly abbreviated to ‘SIM Only plans.’
The key difference between a SIM Only plan and a prepaid plan is that customers choosing a postpaid agreement pay at the end of the billing period with a SIM Only plan. Typically, that’s a month in arrears ( behind. ) In some ways, it’s a trivial distinction. Postpaid plans are seen as more responsible and grown up by some people. They tend to be entered in to by older people because a ( rudimentary ) credit check is required in order to get this type of plan.
Contract SIM Only Plans :
Contract SIM Only Plans are rare these days. There’s clearly a little more commitment involved with a contract. However, in exchange for your dedication, you’ll save some money. People usually save around $10 per month for signing a multiple month agreements.
Contract plans make sense for people who don’t have the time to check their options every month. It’s important to be realistic about what you’re going to have time to do. If you won’t have the time or inclination to check the competition regularly, maybe signing up to a contract and taking the price saving is the most sensible thing to do.
PAYG plans – also known as ‘ Pay As You Go’ plans have a mixture of prepaid and postpaid features. They’re pretty rare in Australia. With this sort of plan, buy the SIM, add a PAYG plan to it at the point of activation and then charge – all as you would a prepaid service. However, from that point, money comes from your account as if you were a postpaid customer.
Just as you’d expect, PAYG plans charge you each time you make a phone call. Rates of 7c per minute are typical. With the average call length being around 2 minutes, you’ll quickly see, if you do the maths, that once you’re making a couple or more calls each day, it makes more sense to invest in a plan with a cap value, whether it’s prepaid, postpaid or contract postpaid. However, if you only make one call a day, you’ll often get your PAYG bill in for less than $10 per month.
Payments are still made a month in arrears with a PAYG plan. However, there is nothing like the level of commitment that a contract plan usually involves. You can usually leave your SIM only commitments with one month notice. ( That is, you can leave once you’ve paid the month you’re in. )
How to make it all work for you
Hopefully, this is obvious – you’re going to need your own phone! The phone you’ve got will need to be ‘unlocked’ phone.
- Consider but don’t automatically go for a contract longer than 1 month:
Some phone companies want you to take out a contract (pretty much only Telstra and even then, they only require contracts for some of their plans.) Almost everyone else does not require a contract. Of course, if you do, you will lose the flexibility of the month to month option of you choose them.
- Get one as soon as your contract ends:
When can I take advantage of SIM Only / BYO mobile rates? You can start right now. Remember, if you had a phone under contract, that contract ends at some point (usually, it’s after 2 years.) From the point your contract ends, you can keep your phone and start getting the new, better rates of a SIM Only plan
SIM Only plans have been on the market for a long time now. In the last two or three years, they have really taken off. Already, the majority of people are using SIM Only plans in their phones.
The maths doesn’t always work in favor of buying your own phone and adding a SIM to it. There are exceptions when the major phone companies compete over significant device launches to steal some new customers form their competitors. A good example is Optus’ iPhone pricing which is often very keen.
As people hold on to their phones longer, however, SIM Options become useful and some knowledge about the difference between the different versions that exist (prepaid, PAYG, contract options, for example) can become helpful in keeping your phone bill realistic. You’ll have noticed that we gave an awful lot of information here on the data element of these plans. Not only is data the most important thing in a phone plan, to most people, these days, it’s also the trickiest to figure out. With people pretty evenly split in our survey, the only way to be sure you’re buying enough is to work out how much data you’re using now.
People are more aware of the options they have from phone companies than ever before. They know that if they shop around, they’re more likely to get a good deal. Comparing contract options versus SIM Only options might appear daunting but, as you’ve seen in our write up, it needn’t be.
Most of the primary research that is shown on this page was conducted by us.
Deloitte’s Australian consumer mobile phone summary is also extremely useful: https://www2.deloitte.com/au/en/pages/technology-media-and-telecommunications/articles/mobile-consumer-survey-2016.html