Mobile data contracts are vital to access the internet, though they can quickly become expenses. We explore some simple tips and tricks to help you save money.
What is a mobile data contract?
A mobile data contract is an agreement between yourself and a mobile network operator such as Vodacom, MTN, Telkom Mobile or Cell C. In this agreement, you consent to a fixed period (such as 24 or 36 months) where you agree to a fixed monthly fee in exchange for a mobile data allowance that would enable your smart device to connect to the internet.
Under a mobile data contract, a customer would typically be offered a monthly bandwidth allowance – such as 1GB or 2GB of mobile data – while other contracts may offer uncapped packages. Packages can optionally include SMS bundles, call minutes, or other services.
When selecting a mobile data contract, it’s important to select a package that (firstly) charges a monthly fee that you can afford, and (secondly) meets your monthly needs to enable you to access work, learning materials, or entertainment.
Will a contract impact my credit score?
When you apply for a mobile data contract, your network operator of choice may check your credit score to ensure that you have timeously repaid your other debts and may further request proof of income documents as well as your expenses to ensure that you can afford the contract in question.
Your network operator may report your monthly payments to a credit bureau, meaning that paying off – and eventually settling – your contract may impact your credit score.
It’s worthwhile to note, however, your credit score may be negatively impacted should you fall behind on your monthly payments, or if your account is handed over for collection.
Do I have to buy a smartphone?
While many South Africans might opt to include a new smartphone on their mobile data contract, a significant way to save money is to retain your present device and use it into a new contract term. This way, your monthly payment will substantially decrease as you are not paying off a new smartphone, but are rather simply subscribing to a mobile data allowance.
What do I need to know about Value Added Services?
Many major network operators offer data contracts, though many of these packages will come with various value-added services attached. These can range from insurance premiums to additional content, as well as access to various educational or entertainment platforms.
By double-checking your monthly invoices, you can ensure that your account is not registered for any added services that you don’t actually use – potentially decreasing your monthly fee.
What is prepaid?
Prepaid, or pay-as-you-go mobile data packages are an alternative to a monthly mobile contract. Under this agreement, you can simply purchase mobile data – or call minutes or SMSs – as and when you need them. Under a prepaid arrangement, most mobile networks typically do not offer a smart device or any other material beyond a SIM card to access their network.
Prepaid packages typically have an expiry period, where purchased mobile data, call minutes or SMS will expire and become unavailable if they are unused over a certain period. For this reason, saving and purchasing larger quantities of data over a longer expiry period can prove more frugal than regularly topping up with smaller amounts, as many mobile networks will begin to offer discounted prices for greater packages.
Do I need to stay with one network operator on prepaid?
If your smartphone is equipped with the ability to use two SIM cards (called Dual-SIM support), a great financial strategy is to use two different network providers. For example, you could opt to use one SIM card exclusively for calls on a network provider that offers better prices, and similarly use the remaining SIM card for mobile data on a more affordable carrier.
On prepaid, you can buy packages from as many network operators as you prefer, so long as you are willing to buy individual SIM cards and register them under your name as part of the RICA act.
What is in-bundle vs out-of-bundle?
Most mobile networks will offer two different standard rates – called an in-bundle rate, and an out-of-bundle rate.
An in-bundle rate refers to the amount of money you are charged when accessing mobile data, calls, or SMSs when you remain within your prepaid or contract’s specified capacity. Once you have exceeded that amount, you will be charged a more expensive out-of-bundle rate.
For that reason, it is worthwhile to remain on an in-bundle package for as long as possible to save money – or, if that isn’t possible, to use out-of-bundle services as seldomly as possible to avoid accruing additional charges.