Mobile plan vs. cap plan: What's the difference?

It may be a surprising to know that there are more mobile phones in Australia than there are people. This means that either nearly everybody owns a mobile or, as is more likely, several of us own a few phones. That in itself is an indication of the mobile industry’s lightning pace and the transient nature of mobile technology.

Given this constant flux, it can be difficult to know which mobile option to choose and many people grapple with the decision between a traditional mobile phone plan, cap plan or prepaid mobile. Find out the differences between traditional mobile plans and cap plans right here.

Choosing a mobile phone plan

For most, taking out a mobile phone plan means being able to take ownership of a fairly up-to-date handset that otherwise may not have been affordable outright, but, of course, signing a contract with the carrier for a long period - 2 years on average.

Finding the right mobile phone plan to suit you can involve a fair amount of research.The phone functionality, network capabilities and of course, cost, all have to be taken into account.

Traditional mobile phone plans

A traditional mobile phone plan will combine call, text and data costs with the monthly handset payment. After a few months you should notice that your bill averages out to about the same amount each month, as you move into an average usage pattern and your outgoing costs are added onto your handset payments.

Benefits of a traditional mobile phone plan include:

The ability to take ownership of a phone you could not afford to buy outright, and pay it off over time
Superior network coverage and functionality options
A payment plan that will lead to full ownership of the handset within a period of about 2 years
The ability to pay the plan out faster if you manage to free up the cash

Alternatively, you may be looking for a capped monthly spend with bonus added value, as has become the standard, in which case you’re probably looking for a mobile cap plan.

Mobile cap plans

A cap plan is a useful way to take control of your spending and your mobile phone usage.
You take on a “cap value” cost per billing period, and can therefore budget a bit easier through your knowledge of what to expect each month in terms of your mobile bill. The cap plan will usually offer a certain amount of “free calls and texts” for each cap price, and for many cap customers this is what makes the option so favourable.

Beware though - you can run into trouble by spending more than your cap and being hit with a higher bill and higher flagfall for every call, text and media application above your capped amount.

For those customers who can estimate their average usage needs, a cap can be a great way to take advantage of free offerings from the carrier and enjoy the best of both worlds.
A cap plan can make your bill less stressful, as there should be no surprises – carriers may notify customers if they are close to exceeding their cap throughout the month, and there are usually online checking capabilities to find out how much of your cap you have exhausted.

For many mobile phone users it makes sense to try out a cap plan in the first instance and determine their average monthly usage – cap plans can usually be altered if you need to move up or down a cap amount.