How Australians Waste Money On Calls And Data

How Australians Waste Money On Calls And Data

We’ve often suspected people spend more money than they should on mobile services, and now there’s some solid proof. New research suggests that 68 per cent of Australians don’t believe they get full value from their contract plans. Despite that, 45 per cent have experienced ‘bill shock’, where their monthly bill is much higher than expected.

Picture by Graham Crouch/Getty Images

The ‘State Of The Mobile Nation’ study of 1600 consumers was carried out by Macquarie University (and sponsored by mobile provider Amaysim). We reported on some of the initial findings of the study last year, but the final report provides some additional insights into how we spend our money on phone services.

While we often associate bill shock with going overseas, that wasn’t the primary cause identified in the study. Domestic voice calls were the top reason (cited by 54 per cent of those studied), followed by data costs (20 per cent), SMS charges (18 per cent), international calls (13 per cent) and roaming charges (11 per cent).

Despite extremely high rates of mobile ownership, Australian consumers rank available services poorly compared to countries in the European Union:

Consumers in Australia find it harder to compare mobile carrier offers; they have little trust in the industry to respect their rights as a consumer; they experience more problems and complain more than their European counterparts; they find it harder to switch suppliers; mobile carriers don’t live up to consumer expectations and finally consumers don’t think that the mobile carriers behave ethically.

Macquarie’s Dr David Gray plans to continue the research, including more detailed analysis of why many consumers resist changing even when they feel their plans are bad value. One factor which emerged in focus groups during the research was a widespread belief that all carriers are equally lousy and deceptive, as well as a high level of confusion over what plans included.

Forthcoming changes to how phone plans are marketed, including a ban on the use of the entirely deceptive word ‘cap’, should make it easier to determine if you’re wasting money. In the meantime, the best approach remains to carefully analyse any plans you’re offered, and work out whether all that confusing ‘$500 worth of calls’ messaging actually meets your needs.


  • i think “bill shock” is just a symptom of stupidity and the general willingness of consumers to sign dam near anything, i recently got to a stage in my life where post paid became a viable option and the cost of prepaid outweighed the benefit of financial security, but before i did that i shopped around i looked into every aspect of what was on offer, before i even thought about talking to a sales guy i knew what was going to cast me and how much it would cost on my desired plan, i knew my product so well i picked up a 75c discrepancy in my first bill and was able to point out exactly why i shouldn’t have been charged it, people shouldn’t be signing anything never mind a 24 contract with known large cost possibilities (international roaming) with out this exact level of product understanding, if you do sign it and then le your 5 year old watch 7 hours of streaming wiggles you deserve the giant bill

    side note: dead on right about no trust for carriers in australia, they havent done anything to earn that trust

  • Totally agreed. I believed they deliberately make it happen easily for those people whom has cross over the line. I was with voda on a data only plan (14G/month), till the end of the billing cycle i received a email for them saying my usage was high. Later i realised that it was already reaching 40G. Whatever explanation given to them was useless.

    • How is that Vodaphone’s fault? Don’t they offer a service where you can check your data usage online? Did they do the downloading of the files you watched, viewed, enjoyed?

      You were the person in control of how much was downloaded and should have been responsible enough to make sure you stayed within the allowed usage. You are a great example of the person, fury-s12, above was describing. The kind of person that says when they look at the monthly bill, “Derp! This can’t be right?! Did I really download this much, Derp?”

      It seems everyone wants to be spoon-fed and coddled instead of putting forth even a modicum of time and effort to take control of their lives – even when it comes to something as simple as a phone bill.

      • But even when you do watch your usage, it’s still possible to inure it.
        I carefully monitor my usage, and a few months ago, my home internet connection downloaded an unexplained 36GB of data. Only two computers were on at the time, I checked Windows Update, and other programs to see if they downloaded something, checked my DHCP log for WiFI intruders, but couldn’t work out who used the data. So was it my fault, or a billing error? What can download 36GB without you knowing?

    • sorry but, yes PRIME example of what described, its in no way voda’s responsibility to keep your data usage in check, sure it would be a “nice company” thing to give you a warning of an impending limit but that still not something they must do.

      and to get ahead in case anyone says “but the average user doesn’t know how many gigahoozeys a youface movie takes up” its still the users responsibility to find that out BEFORE doing it

      • I believe that the telcos will be required to send a warning sms when you’re near and then at capacity of data allowance under the new industry guidelines being proposed.

        • That’s just another example of coddling the consumer and negating any responsibility the consumer SHOULD have when entering into a contract.

          Welcome to a world where everything is baby-safe. A world where everyone is too dumb or ignorant to know what they are supposed to do to become a functioning member of society. It’s a world where everyone chants “GIMME GIMME GIMME” — never mind the consequences.

          • whilst that sounds OTT its correct

            forcing the carriers to monitor and send warning messages is not something they can do for free and the consumer will bare that cost, sure its not huge but its more cents im paying coz of idiots

          • On the other hand, it’s saving me time since I won’t have to regularly check my usage. Given the carrier already has systems in place to measure data usage, the overall expense will be minimal compared to the benefits.

          • One of the first apps i installed when i got my HTC from telstra is a small 2X1 widget which tracks my data usage, i keep it on my main screen so i never go over, simple and effective, i cant ever imagine going over my data limit almost 4 times over without realising, with the small exception of windows updates when tethered.

      • I’m not sure if you guys know this or not, but at least Vodafone and Three has the capability to update the usage track every second. This used to be the case with Vodafone about three years ago and until they were taken over by Three.

        Three and Vodafone knowingly update the usage 24 hours to 48 hours late so that you cannot really check the amount for sure. And in my case, even after the confirmation that I was not to be charged for certain data usage, they still charged me.
        I told them that I had the confirmation it was not to be charged, and they told me to give them the name of the person. Are you kidding me? I was transferred like 7 times because they did not know how to handle the issue and they want me to give them a name. They offered me $5 discount at first, with what they call a “good faith” discount. I rejected it. Then they offered me $10 after a few more minutes, $15, $20, $25, $50, then the whole amount of approximately $70 at the end.

        This is their tactic to overcharge people. They do not let you see your balance up to date, they do not send you an email saying you have reached your limit, they do not offer anything until your bill comes to you with a whopping amount of usage. Anyone who experienced this will realise how tacticful they are in doing this.

  • Ahh, people failing to read what they sign then having a cry about the other party following through with their rights.

    The one thing I’m opposed to is constant “value” inflation. What’s the use of $500 of “value” when calls cost $1.50/minute?

  • People should also be more aware of their consumer rights with Telcos. You both make the contract, it is a two way street. I had been with telstra on my current plan for 6 months when they sent me a call cost increase notice, the one at the begining of 2011. I agree that it was unlikely to affect my cap charges (i have not gone over since) however they made a contract with me under specific conditions and one of those was the call rates, by changing the conditions of the contract they invalidate the contract and you can terminate without penalty.

    I did not have a majour problem with the cost increase, apart from business ethics so i lodged a complaint. It got delt with very poorly in the call centre but upon escalation to the mbudsman Telstra were very co opperative and we came to an agreement where they increased my data lmit three fold.

    Just because something is written into a contract does not make it legal! Always challenge them and know your rights

  • Try working at a Telco you’ll see just how dense people can be, actual quote “why was i charged $400 for this call!!?” Customer had spent over an hour on the phone to the UK after being specifically told when signing up that the plan did not include international calls they then wanted to get a credit on their bill, needless to say it was denied.

    Consumers are idiots

  • The software that is provided by Vodafone and most of the providers is very limited in being able to monitor data. I can monitor my data within the hour with Internode for local usage, yet Vodafone would say data usage may not inlcude the last 48 hours, and telstra seems to not include the last 6 hours. I know I stay below my limit, but monitoring it is an issue. Because I’m a legacy system telstra customer. I don’t know how much of my plan allowance (I despise the word “Cap” when it isn’t) I use until the bill arrives. I’m able to roughly calculate based on my own usage, but not to the degree telstras computers can when used to calculate my bill. Frankly, I’d rather have a number of prepaid minutes, unlimited text and 2.5Gb allowance that either slows or stops when I get there. It’d make it a darn sight easier for me caculate my calls. When calls cost 90c/min (or Think $54/hour). Theoretically, I have 1080 minutes, less flagfall or other non-included usage. (or 18 hours). Not accounting for flagfalls (which is a joke when you are charged in minute blocks anyway!), the call rate of my $79 plan is 7c/minute based on normal usage.

  • dan

    Thanks for your honesty for being the only commentor to openly say they work for a telco. And for stating what they honestly think of their customers. No surprise to me.

  • I have to say consumers in this country are so caught up in signing up for 24 months for a “free” phone. When you look at the cost to buy a phone outright, you generally save upwards of $500 (depending on the model). Prepaid has become so much more lucrative nowadays with all the unlimited offerings Eg. Boost, Amaysim, Red bull, Optus $2 days etc. If your spending anymore that $40-60 a month on your mobile phone, yes you are an idiot as their is such a better deal out there.

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