There probably isn’t another industry that has bamboozled consumers as badly as the telco industry in the last 10 years with pricing that is difficult to understand and unhelpfully complicated plans.
The major telco providers have conveniently divided their plans into neat little categories around ‘talk’ or ‘text’ or ‘Facebook time’ or ‘extreme use’. The plans put the emphasis on one service or feature. These categories are undoubtedly created by the marketing and sales boffins to capture as many different consumers as possible and force them into boxes that supposedly match their phone usage. But if you’ve ever looked at different plans and wondered which lifestyle category suits you or why the plans don’t suit you, it’s because people don’t typically fit into neat little usage boxes.
Steve wrote to Investigator about how he felt done over with Telstra pre-paid pricing. “My son gave me a new smartphone for Christmas, unfortunately it was with Telstra. I stopped using Telstra about five years go as my ISP and landline supplier because they just weren’t competitive enough.”
“Armed with a $20 prepaid voucher I set up my phone. I used minimal internet access and made a few calls. After a week of occasional use I checked my balance and found out I had only $6 credit left.”
Steve tried to access his voicemail to hear missed messages. “As a first-time user, I was asked to provide a pin for security reasons. I tried to do this, but gave up after three attempts through dropouts and time taken.”
Steve got a nasty shock a bit later. “After I checked my account, I found Telstra had charged $1.07 each time to access voicemail even though I received no messages. They further charged $0.69 per minute of call plus 39c per connection. A 65-second phone call cost me $1.77.”
Telstra has four pre-paid plans with different pricing for each one. This alone can make it difficult to compare plans with other providers and work out which one offers the best value. The Encore charges 89c per 60 seconds with a 39c connection fee for landline calls in Australia. The Beyond Talk plan costs 78c per 60 seconds with a 39c connection fee. Credit lasts for 30 days for both of these pre-paid plans. The Simplicity charges 15c for calls with no connection fee, but credit last for different times from 30 days to 180 days depending on how much you purchase. The Long Life plan charges 78c per 60 seconds with a 39c connection fee. Credit on this plan can last from 60 days to 12 months depending on the amount purchased, with some ‘bonus’ minutes for longer-lasting credit.
Now compare all those costs and work out what suits you best. Confused? Now you have to go to the other providers and then compare them to calculate the best price for using your phone to make a call or send a message. At least with pre-paid there is an option to change plans virtually on the fly if it doesn’t suit, whereas with post-paid plans you’re locked into a contract for two years, so it’s usually only possible to upsize to a more expensive plan and costly to downsize to a cheaper.
Steve has taken his smartphone business elsewhere. “A quick visit to the nearest Telstra shop informed me that to unlock the phone would cost $100, which is what I have chosen to do. By using my new phone with Amaysim it’s costing about two-thirds less than Telstra with more benefits.”
This ‘confusopoly’ of plans with different pricing and inclusions just makes it hard for people to compare like with like when it comes to plans from different providers. It creates ‘lifestyle’ plans that are an artificial construct that most consumers don’t need or want.
Consumers just need phone calls, messaging and data – the three main components in a phone plan – and they need to be able to easily and quickly compare the cost of these to get the best deal.
Investigator can’t predict if this situation will change anytime soon. Telcos must show prices for standard calls, text and data usage, but this doesn’t stop them from inventing a range of plans that will continue to make comparing costs a frustrating experience.