Mobile phone costs up, but savings options increase too

Phone plan charges have climbed this month for many Australians, but experts say there are ways to cut your costs.

It’s often people’s most precious piece of technology, sleeping next to them at night and never leaving their side during the day.

Smartphones have become a vital tool of everyday life and like other major household expense, costs are climbing as inflation surges.

On July 1 millions of Telstra customers were hit with price rises on their plans of up to $6 per month, while prepaid plans rose between $2 and $5 for 28-day recharges. There were similar rises at Telstra-owned Belong, as well as at Boost Mobile, which is powered by Telstra’s network.

Vodafone’s minimum plan prices rose from $40 to $45 per month in March, while Optus last increased its monthly mobile plan prices by $4 in July 2022.

Telecommunications comparison website Whistleout.com.au says large phone companies typically charge more.

“No one loves a price rise, especially in the current economic climate,” says Whistleout spokesman Alex Choros.

“At the very least, Telstra’s price rise shouldn’t have been too surprising to customers.

Many Australians’ phone plan costs climbed on July 1. Picture: iStock

“As of last year, all of Telstra’s upfront plans have come with a disclaimer that the price may rise each year in July, in line with CPI.”

Choros says costs are similar among like-for-like plans, largely reflecting wholesale pricing.

“A $30 plan on a Telstra network provider like Tangerine should be pretty similar to a $30 plan from another Telstra network provider – Superloop, for example,” he says.

“The big benefit of smaller providers is that while you’re looking at spending at least $62 per month for a Telstra postpaid plan, these smaller providers have options under $30 per month, with different data options.

“For example, Tangerine has a $29.90 per month plan with 32GB of data powered by the Telstra network. Alternatively, you can pay $34.90 per month for a 42GB plan on Tangerine, which is much more affordable than Telstra’s 50GB $62 plan.”

However, Telstra’s plan has premium inclusions such as perks program, roaming and more unlimited call options, Choros says.

His other tips include:

• Matching your plan to your usage – don’t pay for a 100GB mobile plan if you only use 10GB per month.

• Considering buying a phone outright rather than via a plan, giving you flexibility and an ability to switch.

• Changing plans every six to 12 months, as many providers offer discounts to new customers for an initial period.

“If you own your own phone, consider a smaller provider,” Choros says.

“While Telstra, Optus, and Vodafone are the big names, smaller providers like amaysim, Boost Mobile, and felix mobile are powered by exactly the same mobile networks, and often have more affordable options.”

Moneysmart.gov.au says most plans now include unlimited calls and text to Australian numbers, so the key differences to compare are data, entertainment packs and international calls and texts.

It recommends comparing plans with different providers before deciding.

“Comparison websites can be useful, but they are businesses and may make money through promoted links,” it says.

“They may not cover all your options.”

Telco More, partly owned by The Commonwealth Bank, says there are savings available.

More CEO Andrew Branson says customers of big telcos often pay for things they don’t need or want “and are often subsidising their big-spending marketing budgets”.

“Lock-in contracts are very 2000, so it’s fair that customers are opting for flexible plans that can be upgraded, downgraded or switched as needed,” Branson says.

“Consumers can unlock the door to savings by taking advantage of welcome offers and promotions such as double data.

Wesley Pearson switched phone companies to help save money. Picture: iStock

“Consumers should calculate the costs to buy a handset outright – this gives them more options when it comes to choosing a mobile provider … it’s an upfront investment that can lead to long-term savings and reduced monthly bills.”

CommBank customer Wesley Pearson says he saved about $30 a month by switching to More.

“I got the same plan that I was on with another provider for what I thought to be a much more reasonable price,” he says.

“I made the switch as I was looking to save and cut down my expenses.”

COMPARE BEFORE SWITCHING

Moneysmart.gov.au says weigh up these features before changing phone plans:

• Contract length – usually 12, 24 or 36 months.

• The new provider’s network coverage, ensuring it delivers service where you live and work.

• The cost of a new phone if included in the plan.

• Minimum total cost over the length of the contract.

• Data allowances that deliver what you want, plus additional data costs.

• How much you will be charged for making calls overseas.

Source: Moneysmart.gov.au

Originally published as Mobile phone costs up, but savings options increase too