Prepaid Mobile Phones on the Rise as Australians Control Spending

A recent Finder survey found that over a third of Australians are worried about their financial situation. As people look for ways to reduce unnecessary expenses, prepaid mobiles phones present a great opportunity for budget-conscious Aussies to control their spending.

The rise of prepaid mobile phones

The Roy Morgan Customer Satisfaction Report on Mobile Phone Service Providers has found that prepaid mobile phones have gained customer satisfaction edge over prepaid for the first time in Australia.

This trend became apparent from the previous year, with prepaid mobile phone satisfaction going up to 76.8% in March 2020 – a 3.7% points increase from April 2019. By comparison, customer with post-paid mobile phones went down by 2% points to 75.6% over the same period.

The growing satisfaction with prepaid mobile phones coincides with an increasing number of Australians buying and using them – 33% now use prepaid mobiles compared to 30.3% in 2017.

That’s not to say post-paid mobile phones are dead.  The majority of the population, or 56.8%, still use post-paid plans. 

Curious to know what mobile plan everyone else in on? Subscribe to Mobicity for the latest news and updates on mobile devices in Australia. 

Why are mobile users switching to prepaid mobile phone plans?

Experts believe that one of the main reasons more Australians are switching to prepaid is that it gives them better control over their phone spending. 

A 2018 survey found that the average Australian spends $375 per year on their phone bill – that amounts to $9 billion for the whole nation annually.

Post-paid mobile phones come with data inclusions and other perks, with major providers offering significant increases in data from low to mid-tier plans. According to 7News Australia, spending just $10 more on your post-paid mobile phone plan per month gives you as much as 40 additional gigabytes of data to use. 

But when it comes to data to dollar value, prepaid mobile phone plans are cheaper than postpaid. Major providers offer prepaid plans as low as $15 for 4GB along with unlimited talk and text for 30 days. 

The decline on mobile spending could also be due to fewer mobile users paying off their handsets via mobile bundles, with just 26% of Aussies on device and data bundles compared to 36% in 2017.

Mobile users are also holding onto the same phones for longer. There will always be mobile geeks who upgrade regularly, or simply those who have to have the latest phone model, but many of Australians are happy to stick with older models and get more use out of their current phones. 

How to choose a prepaid mobile plan 

  • Shop around – Compare rates and prices between established providers and new players. This will take time but it’s worth finding a prepaid plan that can potentially save you hundreds, if not thousands, in charges each year. Get recommendations from friends and family, and keep an eye out for updates and promos. 
  • Change carriers If you’ve been with your telco for years, consumer loyalty might prevent you from switching to a carrier with better prepaid rates and perks. But if you’re bleeding money on your current phone plan, it’s worth reevaluating your relationship with your long-time provider.  

As competition between providers increase, and with more pricing options in the market, getting locked into a post-paid mobile phone plan for 24 months is no longer practical for Australians who don’t use all of the added perks of a top-tier plan and who don’t want to incur extra charges at the end of each month. 

Mobile phone plan pricing is changing at a rapid pace as telcos strive to offer the best deals possible. Get the latest news and updates on the mobile industry here at Mobicity.  

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