Mobile contracts cost you lots of money!

(A lot more than what you actually pay each month)

If you’ve been a member for even a short period of time, you would definitely know by now that we strongly advocate against locking yourself with any provider.

What may be good in your personal life, can be very detrimental for you as a consumer.

It’s been referred to by some as the ‘lazy tax’ but personally, I prefer to call it the “loyalty tax” (as I reckon nobody likes to be called lazy).

Whatever you call it, this ‘tax’ is very real and is costing Aussies billions (yep, that’s with a B!) every year.

Other than the direct costs of paying more than you have to for your mobile calls, text and data, there is also the indirect ‘opportunity cost’ that needs to be accounted for.

Opportunity Cost is an economic term which is defined as:

“A benefit, profit, or value of something that must be given up to acquire or achieve something else”.

In this specific context, it’s the hidden cost of not being able to take a superior deal from a competitor while you are stuck in a lock-in contract.

Therefore, you must always maintain your freedom to choose and getting yourself into a mobile plan with a lock-in contract (no matter how short) is a bad idea!

As a matter of fact, being a loyal consumer is not a wise move in general.

Go with a mobile plan that doesn’t lock you in.

The objection to contracts doesn’t come from some philosophical viewpoint but rather has everything to do with $$$ !

A no contract mobile plan will almost always offer better value than plans which lock you in. This is especially the case when considering the amount of included data.

There are some exceptions to this rule but they usually only apply for very specific usage patterns (e.g. when you wish to create a ‘data pool’ to share across several members of your household).

For everyone else, a no contract mobile plan is the way to go!

In addition to better value, a no contract plan offers you total freedom in the sense that you can give it the flick at any time if you’re not happy or a better deal comes along from a competitor.

Despite what you may think, this is extremely likely!

Many people don’t realise that but Australia is one of the most competitive markets in the world when it comes to mobile plans (if not the most competitive!).

This is mainly because of all the virtual operators (a.k.a MVNOs) which operate here and resell access to the Telstra, Optus and Vodafone networks. Just take a look at this list and you’ll be amazed with the number of options on offer.

Due to this fierce competition between providers, mobile plans (and especially prepaid mobile plans) are one of only a few types of products and services which have actually become cheaper over the years!

“Will I lose my number if I switch?”

Many consumer surveys have shown that one of the things which worries customers the most about changing their mobile provider is the concern about keeping their existing number. Many people are simply afraid they will lose it if they switch.

However, this concern is unfounded as customers are always able to keep their existing number, if they so choose and this right is protected by federal legislation known as the “mobile number portability rules”. Not only that but the process to do so (known as porting) is very easy, requires no technical skills and is completely free.

This is because the government is the ultimate owner of all the phone numbers in Australia (both landlines and mobiles). They don’t belong to either the customers or the phone companies.

“So what is the best mobile plan if I use lots of data and don’t want to be locked-in?”

OK, now that we got the general information out of the way, I’d like to present to you what our research (and that of others too) has shown to be the best mobile plan with no lock-in contract currently on offer in Australia for those who need lots of mobile data.

This mobile plan offers you:

• Unlimited calls to all Australian landlines and mobiles (including 13/1300 numbers & voicemail access)

• Unlimited SMS and MMS to any mobile in Australia.

• 17GB of 4G data on the relatively reliable Optus network. 

The price: $35 per 30 days.

If you are willing to prepay for 90 days in advance, the price is $89 which effectively means you are paying $29.67 per 30 days.

Have I got your attention? 😉

Many providers have recently started charging in 28 day cycles. This effectively means you end up paying for an extra month every year. Nice little trick for them but not so much for us consumers.

This mob doesn’t do it. Their plans still work on 30 day cycles.

This is much fairer, don’t you think?

OK, I won’t keep ‘teasing’ you any longer.

The provider I am talking about is CatchConnect and specifically their 17GB plan.

CatchConnect is a new mobile prepaid service launched in February 2018 by Aussie online retailer Catch which you may know better by their previous name Catch of the Day.

The Catch Group (formerly Catch of the Day) was founded in 2006 by Gabby Leibovich and initially focused, as their original name suggests, on offering one single amazing deal per day.

Here is a story ABC news did on them back in 2011:

Since those early days, Catch of the Day (now the Catch Group) has gone from strength to strength and have grown significantly.

Nowadays, they are one of the biggest and most successful online department stores in Australia, with their biggest local rival being Kogan.

The Catch group is an Australian-owned company and run their operations from Australia with warehouses in Melbourne and Sydney.

Instead of moving offshore, they decided they will use the latest technology, including robots, in order to maintain their competitive edge.

Here’s another story from ABC news taking a look inside their warehouse:

As it became apparent in 2017 that Amazon is going to launch in Australia, Catch of the Day re-branded themselves as Catch and also launched a marketplace where other retailers can offer their products through their platform and take advantage of their existing customer base and distribution channels.

After Kogan relaunched their prepaid mobile service on the Vodafone network and has seen great success with it, the Catch group realised that running their own mobile service as an MVNO (i.e virtual operator) can be a great source of revenue and profits for them.

So, in February 2018 they did just that and launched their own mobile service on the Optus network.

While Kogan Mobile offers pretty competitive plans, I feel that the fact they run on the Vodafone network makes them not feasible for many people, especially those living outside the major cities and regional centres.

Therefore, I was very pleased to see that CatchConnect offers pretty much the same prices and data inclusions (especially on the plans with the higher data allowances) but on the Optus network, which has superior coverage to Vodafone in many cases.

You can check coverage in your local area here and if you’re happy with it, you can purchase the monthly plan or prepay for 90 days to get a lower price per month.

“Optus has rubbish coverage where I live. What’s the best deal on the Telstra network?”

Fair enough. I can definitely understand that.

Despite some significant improvements seen with the Optus and Vodafone networks over the last few years, for some people, Telstra still offers the best coverage (especially in regional Australia).

If you’d rather be on the Telstra network, the best deal will depend on how much you are willing to pay

If you want to pay the same as the CatchConnect plan discussed above ($35 per month) then the best deal for you is with Aldi Mobile.

For the same monthly cost as with CatchConnect above, you get:

• Unlimited calls & text in Australia;
• Unlimited calls & text to 15 countries; and
• 12GB of data which can also be rolled-over to the next month if you recharge before your current plan expires.

If you are willing to pay $40 per month, you can get a whopping 10 GB of additional data with Boost Mobile for a total monthly data allowance of 22GB.

Other than the much higher data allowance (at a slightly higher price), the Boost Mobile plan is almost identical to that of Aldi and includes unlimited calls & text in Australia, unlimited calls to selected countries and the ability to roll over any unused data to the next month.

There are however two differences that are worth paying attention to:

1. The Boost plans run on a 28 day cycle whereas Aldi Mobile has a 30 day cycle. This may seem insignificant to you but keep in mind that over the course of a year, this translates to paying for almost an entire extra month with Boost compared to Aldi.
2. Aldi Mobile run their service on the Telstra Wholesale network which is a slightly stripped down version of their full network whereas Boost Mobile get access to the full Telstra network (the only provider other than Telstra themselves which has that).

The main difference between Telstra Wholesale and Telstra ‘proper’ is that with Telstra ‘proper’, you get access to the 4GX network (which is basically a faster version of the standard Telstra 4G service).

This means you may (no guarantees!) experience better data speeds with Boost compared to Aldi Mobile if:

1. You have a smartphone which is compatible with the 4GX frequency of 700 Mhz; and
2. The 4GX network is actually available where you are. You can check whether that’s the case or not on their coverage map.

As far as Telstra wholesale which is what Aldi Mobile are using (as well as all the other virtual operators on the Telstra network), you only get access to the standard 4G service (not 4GX) but there should be little to no difference when it comes to making and receiving calls and SMS/MMS.

You can check the coverage map of Telstra Wholesale here.

“Not keen on any of these options as I don’t use that much data in a month”

No worries!

We have a detailed report on mobile plans which outlines more options for you to choose from based on your usage patterns and across all the mobile networks operating in Australia (Telstra, Optus and Vodafone).

If you are in the market for a 4G-capable smartphone but don’t want to pay top dollar for some fancy features you most likely will never use (or be forced to go on a contract god forbid!), you can find a few suggestions here.