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Calling Time on Caps – Compare Mobile Plans

Industry: Telecommunications

Australian telcos have been given an ultimatum: clean up their confusing terms or face tougher regulation

Perth, Australia (PRUnderground) March 27th, 2012

Australian telcos have been given an ultimatum: clean up their confusing terms or face tougher regulation.

Telecom industry regulator Australian Communications and Media Authority (ACMA) believes the biggest culprit for confusing consumers is the term ‘cap’, which many people wrongly assume means a spending limit on their account, to their cost.

There are a few more terms being targeted by the regulator, which will form part of an updated voluntary industry code to protect consumers. But the telcos and internet providers could use this opportunity to go further and make buying a mobile plan a much simpler task.

Unlimited
Advertising a connectivity or mobile broadband plan as including ‘unlimited’ calls is very misleading when the small print excludes several types of call from the plan. Heavy users of an unlimited plan are in for a shock when they discover they are actually being charged for all the 1300 numbers they have been calling.

However, ACMA has identified this as a misleading term and wants it banished from future advertising campaigns.

Several operators and prepaid mobile broadband providers have changed their plans in line with these recommendations. Vodafone has recently dropped the name ‘Infinite’ for its plans and is simplifying its pricing structure, while Amaysim now includes 1300 and 1800 in its Unlimited plan.

Compare Mobile Plans spokesperson, Sarah McDonald, says: “Telcos will have to be more careful in the future when using this term in their advertising. Unlimited really will have to mean unlimited.”

Cap
Cap plans are also on the way out, unless they really are ‘capped’ and there is a limit to how much a person can spend on their phone. At the moment, the term cap refers to an included value on the plan, which is difficult for consumers to work out and makes comparisons between plans extremely difficult.
Included value

Despite being one of the most confusing terms around, included value appears to be staying. In Australia, telcos use an ‘included value’ for calls and texts on a plan but the actual cost of the calls is usually in much smaller print. So a plan with $200 of included calls might sound great until you realise a two-minute call will cost $5. And because most telcos still charge a ‘flagfall’ (connection) fee, calculating the cost of a two-minute call is further complicated.

ACMA has recognised this problem and has prompted the industry to help customers comparing deals. Telcos will have to publish a ‘unit price’ for the cost of a two-minute phone call, a text and 1MB of data on each plan. This will go some way to improving transparency for customers and is a step in the right direction.

Flagfall
The term ‘flagfall’ is familiar to some Australians but a mystery to anyone visiting the country from Europe or the US. That’s because most telcos in other countries got rid of connection charges a long time ago. Probably around the time when customers no longer needed to call an operator to connect a call for them. Maybe not a misleading term as such, but it certainly makes comparison between call charges difficult.

“Removing flagfall charges would go a long way to helping consumers make an informed decision about what kind of plan they need,” Ms McDonald says.

Although there have been no moves to ban flagfall charges, newcomer Amaysim issued a challenge when it brought out simple, no contract SIM only plans for Australia: without flagfall charges.

Included data
Internet-enabled smartphones are popular here. A recent study commissioned by Google found Australia’s smartphone penetration is 37% – the second-highest in the world, just behind Singapore.

Telcos have responded by giving us plans with data included. But the cost of that data is misleading. For example, a $49 plan comes with 1.5GB of data. If you only used data on the plan, that works out at around 3 cents a megabyte (MB). But excess data actually costs 25 cents a megabyte. So an extra 1.5GB would cost $375.

“It’s in the small print, certainly, and telcos could argue that customers understand the difference between ‘included data’ and ‘excess data’. But people do still get caught out, especially if tethering their phone to a laptop, which can easily use up more data than available on a plan. People are still pretty shocked when they receive a bill for excess data,” Ms McDonald says.

Overseas roaming is another danger to your wallet. It’s tempting when trying to find your way around an unfamiliar city to use Google Maps but using only a few megabytes can land you with a costly bill when you return home. A text message reminding customers of the cost of data could help consumers make a more informed decision before connecting to the internet while overseas.

Comparing phone plans
The confusing terms used by telcos make shopping around for a plan a daunting prospect. Removing terms like ‘cap’ and ‘unlimited’ in advertising campaigns will improve the experience of buying a phone for consumers. But buying a plan in Australia is still confusing because it is difficult to compare different plans from different providers just by going from store to store.

Using a comparison website such as Compare Mobile Plans takes most of the work out of comparison. Consumers can simply enter the approximate number of calls, texts and amount of data they want into the calculator and the website identifies the best plans on the market. The search can then be narrowed down further by selecting a phone model, or by removing unwanted telcos from the search.

Compare Mobile Plans will also narrow down the handset choice by allowing consumers to search by their most important criteria, such as brand, if it is web-enabled or by mobile type.

By comparing providers and choosing a plan based on how they actually use their phone, consumers have a better chance of getting value for money from their provider.

For further enquiries please contact:
Scott Kennedy, CEO, CompareMobilePlans.com.au
s.kennedy@comparebroadband.com.au
Tel: 1300 850 518

About CompareBroadband.com.au

CompareBroadband.com.au is an Australian company providing a free, impartial comparison service and expert advice to consumers in relation to broadband plans from Australia’s leading Internet Service Providers.

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