The advantages of mobile phone plans

Whilst prepaid mobile is an attractive option to help with managing spend, if you use your mobile phone a lot a phone plan makes for a much better deal. Phone plans are designed to deliver the maximum call value to the user and provide lower call and SMS prices in return for the plan holder's long term commitment, by way of a contract. Rather than dismissing a contract plan as too daunting a prospect, it's worth weighing up the potential rewards.

Types of phone plans

Mobile phone plans require you to sign up for a set period of time, which is usually 12 months or 24 months, and either cost a fixed monthly fee for the duration of the contract (as with "cap" plans or fixed rate plans), or contract plans may offer lower call and text prices than prepaid mobile. The rates are generally very good either way and some of the things that plans offer are:

Lower call charges
No credit restrictions
Full network service access
Bundles with landline and internet services

Furthermore, plans often include free minutes or a number of free calls, and some plans will include low rate bundles of SMS or even reduced internet data charges (or free data).

Reasons to sign up for a mobile phone plan

If your mobile phone is your only phone, or if your mobile usage is greater than your landline usage, then a phone plan will probably save you money over time. Given the fact that most plans offer bonuses, such as reduced call rates or free calls, as well as reductions on other mobile phone services, plans can prove to be a very shrewd investment for medium to heavy mobile users. Mobile phone networks also have a number of plans on offer at a variety of rates and you should find one that matches your needs.

If you're contemplating using your mobile as a complete replacement for a landline, it's worth noting of course too that, assuming you find a mobile plan at a competitive enough rate, the main benefit of a mobile phone plan is that it's for use with a mobile phone, which lets you call anyone from anywhere – maximum flexibility.

Things to consider before signing up

There are a few questions you should ask before you commit to a phone plan – you certainly want to be sure you're signing up to the right one. Ask about cost of calls to the same network and other networks and be sure to enquire about any "free time" or free calls to friends and family on the same network. Does the plan include SMS and MMS as well, or are there SMS bundle options? You may wish to ask about global roaming, which allows you to use your phone overseas, and it's a good idea to ask about network coverage – is your chosen provider's reach extensive enough for your needs? If you tend to travel around you'll want a service that can meet this requirement.

The bottom line: choose a plan that relates as closely as possible to your phone usage while keeping within your budget. Some of the more expensive plans may appear attractive but don't be fooled into signing for a plan that offers things you won't use. After all, phone plans are supposed to save you money, not cost you more.