Tricky terminology

Here we explain the words used in mobile plans to help you understand your phone contract and save money.

Plans and contracts

A 'mobile phone plan' is what a mobile service provider will provide you with, how the provider will charge you for using your phone and how you will pay.

Within each plan, there are a range of services that will be charged in different ways. Understanding how your phone will be charged and how costs can be added to your bill will help you choose the best plan.

Once you decide on a plan that suits you, you sign a 'contract'. This is a legal agreement saying that you accept everything that's described in the plan.

Included value

Smart Tip

If a plan includes a 'free' mobile phone handset, you'll still end up paying for it one way or another. The cost is usually included in the plan's monthly fee.

'Included value' means everything you get for your regular monthly payment. 'Excluded value' is anything you have to pay extra for. For example, 1300 and 1800 numbers are part of the 'included value' in some plans but not in others.

The provider should be able to show you the following costs in print:

  • Making a 2 minute standard voice call to another phone in Australia (including flag fall)
  • Sending a standard mobile SMS (text) to another phone in Australia
  • Using 1 MB (megabyte) of data when you are in Australia.

Allowance or limit

An 'allowance' is one part of your included value. For example, if you choose a plan that costs $50 a month, it may give you a $300 'allowance' for calls and texts each month. Your allowance is sometimes called your 'limit'.

Ask your provider what happens when you reach your limit - that's really important as you could be charged a lot more.

Cap

Some plans allow you to go over your monthly allowance or limit. In these cases, you will be charged extra ― sometimes a lot extra! With other plans, you will be automatically prevented from using more than your limit in a month.

Before 1 September 2012, service providers were allowed to use the word 'cap' to describe the limit in both cases. This was confusing for customers.

Mobile plans introduced after 1 September 2012 are only allowed to use the word 'cap' to mean a limit that prevents you from going over.

But be careful! Remember that plans introduced before 1 September 2012 may still be using the word 'cap' for a limit that you can go over. You should read the plan carefully.

Data

Data usage

'Data' includes internet use, emails, live video chat, app updates, downloads and sending pictures in a text message (MMS).

Data does not include texting (SMS), voice calls, listening to voice messages or taking photos.

Here are a few examples of data use:

  • Watching a 1 minute video online (about 5 MB (Megabytes))
  • Downloading a TV program (about 350 MB)
  • A 1 hour Skype video chat (about 170 MB)

Wi-fi versus 3G or 4G

For data, it's often cheaper to use your mobile phone with wi-fi than accessing the internet on your mobile network (using mobile broadband such as 3G or 4G). That's because data charges using a mobile network are usually higher than for other forms of internet connection such as in your home connection.

Pre-paid

'Pre-paid' means you will use a mobile phone that you already own and pay in advance for using your phone on a mobile service provider's network - that is, you buy credit. When your credit is all used up, you can receive calls but you can't make calls. You have to buy more credit to make calls with your phone. Sometimes you lose your remaining credit if you don't use it all within a certain time period - for example 30 days.


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Last updated: 05 Jan 2015