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 tomorrow: 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 tomorrow (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!)


Comments

    i like the TCP Code and think it will be good for consumers and in the long run will help telcos as well, i know its to late now but what i wished they included was as well as displaying the information how can now is also have a link like they do in the US with credit card fees, interest and T&C, and display information in a form of a table and layout the same way so you could compare abit more easier.

    just wondering, does the unit pricing change also apply to the smaller telcos?? For example, I've checked the Live Connected website but I can't find any evidence of the unit pricing being implemented yet (maybe they're just waiting till tomorrow)

      AFAIK unit pricing applies to everyone at once. Smaller telcos get some extensions, such as longer to roll out expenditure notifications. But as you say, the rules haven't actually changed yet.

    I have never understood how telcos csnt get away with advertising cap plans. For example they say you get $600 worth of cells for $60.

      Unfortunately, it seems they still do. They really need to just say "here's how much call time you get for this price" instead of this weird virtual currency concept. But I guess that would mean they couldn't charge a flagfall any more, because it wouldn't fit that model, and they'd be all up in arms about that. Unless they charge a flagfall of "30 seconds" out of your "time account", which just brings us back to the problem of a virtual currency again, though I still think that would be easier to understand for us non-telco folks.

      So I think that the virtual currency idea is what the government should be attacking here.

    Laws of physics does not apply to Telco's.
    Also this only applies to money SPEND, not money EARNED. Thus your $60 income does not give you $600 worth of benefit. Probably $600 income only result in $60 benefit to you.

    To be fair, this info was pretty easy to find and work out before. Any sales person in the industry worth their salt would know their company's unit pricing and be able to explain how flag fall, etc works. Consumers also need to be responsible for their actionse and actual research and ask questions.

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