How To Make The Most Of Unit Pricing For Mobile Phone Plans

The first major change under the Telecommunications Consumer Protections (TCP) Code kicks in from today: any company selling a mobile plan in Australia must provide a clear, consistent statement of how much you'll pay for calls, texts and data. That's a welcome development, but you still need to check the details carefully. Here's what you need to know.

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The TCP Code was officially announced in July, but its provisions are only being implemented gradually. Mobile companies have had to be signatories to the code since September 1. From October 27, they have to provide unit pricing details whenever a plan is advertised.

It's the same basic model that's already compulsory in supermarkets, and it's designed to make comparisons easier. These are the details that have to be included, and the traps you should still watch out for.

Call Costs

What you must be told: How much it costs to make a two-minute call to a standard Australian number (either a landline or a mobile; plans in Australia don't distinguish between the two). This is the total of the flagfall plus twice the per-minute call charge, and is often higher than people appreciate — $2 or more isn't uncommon.

Traps to watch out for: The two-minute call cost is instructive, but it can be worth calculating the minimum cost of a call — how much it costs for even the briefest of conversations. For the majority of plans, this will be the flagfall plus a one-minute charge.

Calls to 13 and 1800 numbers will often cost more, though this varies between providers. Voicemail charges are another hidden source of expense. Overseas calls will also generally cost much more, a factor that is worth considering if you regularly call foreign destinations.

This figure is essentially irrelevant if your plan includes unlimited calls, but that rarely happens on cheaper contract plans that include a phone. Unlimited plans will also generally include a "fair usage" clause that means you can't use the phone non-stop every single day.

Texting Costs

What you must be told: How much a standard text to a single Australian number costs. This is typically in the 25 to 30 cent range, though some plans have cheaper deals. Some plans include unlimited texts, which can be helpful if you're a serial texter but may not be worth paying extra for if your usage is light.

Traps to watch out for: Overseas texts will generally cost more. Remember that using emoticons in text can result in unexpected expenses. While you can try to avoid texting costs with 'free' messaging apps, remember that this will use your data allowance.

Data Costs

What you must be told: How much you'll pay (at casual rates) for 1MB of extra data once you've used the data included with your plan. This varies enormously; we've seen rates as low as 10 cents and as high as $2.

Traps to watch out for: Find out what the minimum charging unit is for extra data — plans that charge per MB or per 10MB will cost more than ones which calculate per KB. Some providers offer "data blocks" if you've used up your allowance, which are cheaper than the casual rate. The data rates only cover Australia; roaming rates for overseas are often painfully high.

Think Carefully Before Signing Up

Unit pricing makes the cost of a given mobile phone contract clearer, but those three pieces of information aren't enough on their own. Your own usage patterns are what matters. If you rarely send texts, unlimited texts don't help. If many of your calls are to overseas numbers, those rates matter more than the unit pricing numbers for Australian calls.

We've seen occasional problems with how unit pricing is implemented in supermarkets, and I wouldn't be surprised if there are similar issues with phone plans. We've also seen evidence that consumers don't always use unit pricing information correctly.

Telcos need to include this information but how prominent they make it is up to them. On web sites, it will often end up less visible than the 'headline' detail of how much credit is included with the plan.

The next major stage in the TCP code is the introduction of the Critical Information Summary, which includes not only unit pricing data but also calculates how many 2-minute calls you can make with the included credit. Although it only covers calls, that makes comparing plans directly much easier. However, that won't be required until March 1, 2013. (We've already started including this figure in Planhacker tables when relevant; Lifehacker has your back!)

Republished from Lifehacker


Comments

    Why not just "force" telcos to provide untimed calls for only the cost of regulatory-fixed flag fall? This would stop all the spin, traps etc.

      Because it would stop all the spin, traps etc, that's exactly why. Who does the government consult when making the rules - telcos or Giz readers?

    This is a complete farce, if I'm on a plan is $50 and I get $500 worth of calls and I pay $1 a minute with a 50c flagfall (just an example I don't know of any plans with these exact rates) then essentially I pay between 10% and 100% of the call cost depending on how much of that $500 I use, so to be correct they would need to advertise that for a 2 minute call I pay between 25c and $2.50 for that call.

    What this is going to do is make consumers think they are getting a better deal from traditional mobile plans whereby you pay $50 and get $50 worth of calls, because the per minute rate is lower, ignoring the fact that while lower per minute rates you are always paying 100% of the call rate. Move forward 6 months and everyone's mobile bills have increased significantly and guess who's fault it will be?? That's right the Telcos.

    Am I the only one who had a mobile before cap and unlimited plans flooded the market and remembers how much more we were paying then for lower usage than what we get now?

    Last edited 29/10/12 10:05 am

      If I'm reading your comment correctly I think you have it backwards, the unit pricing is so you can tell if other plans with $XXX worth of calls are better or worse. i.e. you pay $50 for two plans one with $500 the other only $250. Ignoring flagfall and just simplifying, if the $250 plan had a unit pricing of half the $500 plan then they would be equal value. Consumers will still need to do some maths to compare plans but a 2 minute call is a good choice as the flagfall will have a larger impact.

        I definitely don't have it backwards, my point is that if a 2 minute call is $2.50 and I make 200 of them (on the before mentioned plan) I wouldn't be paying $500 I would be paying $50. Therefore if I work out what I am actually paying for my 2 minute calls (and for the sake of this example I am assuming all calls are exactly 2 minutes) the equation would be $50/200 calls therefore I would really be paying 25c per 2 minute call, in actual dollars, therefore the unit pricing is not correct and does not reflect what it will cost the customer.

        My problem with this is exactly what you've said, the customer would still have to do some maths, so its not like at the supermarket where I can say this toilet paper is $1/100 sheets and this one is $2/100 sheets so the first one is cheaper. And if they have a special on the first one that is 3 for the price of 2 they will give a unit price of 66c/100 sheets. This is not the case with the new TCP Code.

        Smart consumers are already making smart decisions when it comes to phone plans, this is there to help everyone else, and they will just go for plans with the lowest per 2 minute rate and ignore the inclusions and end up on a much worse deal.

        Maybe consumers should have to pass a basic maths test and and if they fail they get prepaid, problem solved lol.

        I think AzTech's point, which I agree with, is that 'cap' plans are intrinsically deceptive marketing doublespeak. A $50 plan with a $500 cap charged at (in very small print) $1/min, is essentially a $50 plan charged at 10c/min, and should be advertised as such. The inflated numbers are a deliberate obfuscation, and I'm actually quite surprised that it's been allowed to go on this long.

      I don't think consumers will think that a $50 plan with 250 free two minute calls (equivalent) is worse value than a $50 plan with 25 free two minute calls (equivalent) - using your example numbers. This actually makes it easier to work out what the "$500 worth of calls" really is.

        I just think it's not enough, as I've stated people that understand numbers will still be able to compare as they always have but for average joe (who this code is designed for) just looks at the numbers and says well this number is smaller than this number, he will be no better off. I don't think it's enough, all the marketing double speak related to caps and inclusions needs to be cleaned up otherwise this will have no effect and people will still blame everyone but themselves for their bad decisions.

          AzTech, you're correct, but have a look at the end of the article. It says:
          "The next major stage in the TCP code is the introduction of the Critical Information Summary, which includes not only unit pricing data but also calculates how many 2-minute calls you can make with the included credit."

          That will start in March next year. That should provide a better indication of value for money.

            I must admit I did miss that, makes a lot more sense.

    To do this properly, you should be told how many MINUTES of calls you get.

      Check out the last paragraph of the article. It says on March 1 2013, Telcos will have to tell you how many 2 minute calls you can make with the included credit. That effectively allows you to directly compare 2 plans.

      That would be best however a few problems arise with that.
      1) Premium rate Calls (eg international), which i guess could be excluded generally and those plans that include it could be as a $ value, and extra charged they way it currently is.

      2) SMS/MMS (local and international), perhaps make them same cost (its virtually pure profit anyway) 1xSMS could be 10seconds or something, even better would be for SMS to be unlimited, with data messaging becoming ubiquitous the arcane SMS is loosing its luster, once its not the big money spinner it used to be there is hope it'll be all unlimited (at least to a reasonable amount).

      3) Call connection fee (stupid rip off and should be abolished if you ask me), this is the real problem that magnifies the complexities of the plan, and is most likely impossible to deal with in a x minutes per month plan.

      As long as they don't do what they do in the US (or at least used to, not sure if they still do), it doesn't matter if you call or are called, you both get minutes deducted from your account.

    I've done a bit of work on this lately due to needing to renew my contract at the end of the year. It all falls down when the cost per minute and amount of included credit are manipulated. If you look at the Amaysim $19 plan, a two minute call costs 0.18c. The Optus plan at the same tier will cost you $2.15.
    The Amaysim plan includes $19 worth of credit, the Optus plan includes $180 worth of credit. At face value they're completely different plans. If you take the time to work out approximately how many minutes are included in the plan you get... wait for it.... 200 minutes of calls (give or take).

    The difficulty comes when you see that a flag fall is a fixed cost per call and a call varies in length. The other difficulty in comparing plans is that both SMS's and calls (of some types) come out of the amount of included credit. So a "standard use" needs to be settled on in order to determine which plans are better value. I'm sure someone who has algorithmic experience could come up with a formula to work out how many minutes of calls and messages you could get out of a particular plan at their given rates but it's not particularly easy.

    Given that, what hope have we of being able to compare plans which, it feels like to me, are being deliberately manipulated to make it difficult to compare.

      Just go for Live Connected instead, cheapest BYO plans I've seen.

        That wasn't the point of my comment.
        It's incredibly difficult to compare plan for plan because of the way operators are manipulating cost and inclusions. The TCP is a step in the right direction though you still can't use it to comprehensively compare a plan.

          Absolutely, I agree with you point entirely, they have definitely made them impossible to compare apple for apples, I just thought I would mention Live Connected if you're looking at amaysim as I think the amaysim $19 plan is a rip for a BYO. More of a side note not really a commentary on your post.

    Except live connected is not taking any new connections as they couldn't deal with the growth or some crap. So until they get more staff they not connecting anyone lol.

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