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Contract or No contract

By Lilian Lim
May 2000

Pstt... Here's a tip for ya!

Purchasing a mobile phone is a hard enough decision with so many models, styles and technology available. Then, there's the decision to be on a 'plan' with one of the many service provides in the market. The whirlwind of phones and plans to select from - all enough to confuse the consumer who just wants a simple phone with a simple plan

The Dilemma

"Nokia is so suave, but Ericsson is going to have an MP3 player soon. Motorola is a cool phone, but the Panasonic is small and reasonably priced. However, there's the choice of getting the Nokia 3210 for only a dollar, but then, there's the decision to be on a plan/contract with a service provider I do not particularly fancy for at least 18 months, paying at least $30 per month for access fees, and more for my phone calls. Then, there's the choice of going pre-paid."

The very familiar scenario that face many mobile phone consumers who want to purchase a phone for themselves, but never could decide because of the wide range of service providers and resellers that offers different rates for the plans and handsets. It has been said that choosing a handset and a plan to go with it is more complicated than signing up for a bank loan!

To contract or not to contract - The Ultimate Decision

Many mobile owners do prefer to go on contract, as it is relatively easier to understand how things are worked out. Also, by going on contract, handsets purchased may be relatively cheaper than if bought without a plan, and there may be additional accessories thrown in as well. It is especially popular for those who are first time mobile users. The packages offered come in many varieties of handsets; prices and talk-time, depending on the service provider the users choose to be with. In signing up for a mobile with a contract attached, a few points should be taken note of.

Tips and pointers:

  • 1. Identification
    Necessary identification (such as driver's license, passport, birth certificate, bank statements) is needed to prove that who you are.
  • 2. Job details
    Most providers will ask for job details as well for security reasons. This check is to ensure that users/customers have a steady income to be able to meet their financial requirements every month.
  • 3. In considering a plan to be on, one should ask oneself these few questions before picking up anything:

    a. What will the mobile be used for?
    If the mobile is used only for emergencies, or only for receiving calls, plans with lower access fees and higher call rates can be looked at. However, do be cautioned that if discipline is not exercised, the bill could end up larger than you 'planned' for.

    b. How often, where and when will the phone be used
    There are different plans to suit different needs. Considerations to be made here would be the number of calls made per day and the average time each call would take. In addition to that, it would be good to consider where you are making the calls from, as if most calls are made long distance, it would be worth considering a plan with a "Flat Rate" call charge.
    The time when the mobile is used will also have to be accounted for. "Peak and Off Peak" times on mobile services are different to those of the home/public phones. In most instances, "Peak Times" are from Monday to Saturday between 7.00am and 8.00pm. "Off Peak and Economy Times" have considerably cheaper rates, and confusion usually arises, as many will concentrate on the lower rates displayed in plans. However, it is reminded that most calls would me made during the day (at "Peak Times") as compared to ones being made at "Off Peak and Economy Times". 

Contracts are particularly handy for those who want value for their money by purchasing a mobile phone that will give them the extra benefits that may be attached to the contracted plan they are on. 

Next: The choice of a mobile phone

You are done going through plans available and have read all the fine print on costs and charges applicable to the plans and contracts available in the market. You are ready to purchase a plan - and all you have to do now is to get your hands on a handset to go with the plan.

Handsets come in a huge variety of colors with staggering amounts of features attached to them. The 'phone', which just dialed out and received calls those days now perform more than that. It is easy to get lost in the sea of handsets available - with many of them looking fabulously stunning and just seem to fit perfectly with your exciting and vibrant lifestyle. However, you would have to be very careful in choosing the 'right phone' - as practicality would have to be set against need and desire. Fax and data transferal is very useful tool for businessmen, as are conference call facilities, calendars and calculators. Nevertheless, if you do not 'need' those facilities, getting a phone that has them will just burn a hole in your pocket as these phones do cost more than they look, and even if they are advertised free with a plan, you will absolutely be paying for the phone within the plan itself. 

Any other useful tips to consider?

  • Warranties
    Most manufacturers offer a twelve (12) month warranty for their handsets. Any damages incurred on the phone (for example, a cracked LCD display) would enable you to repair the handset for free, or for a minimal sum. Some manufacturers (like Motorola, Ericsson and Nokia) would even cover express exchange services in their warranties where any damage done to the handset would be replaced with a new one. These add-on services offered by manufacturers are an addition to the already excellent product provided by them. 
  • Hidden Charges
    In addition to the duration of the contract (usually between 18 and 24 months) that has been signed, the monthly access associated with the plan as well as the charges placed on each call, users would have to take note also of the hidden charges associated with purchasing plans. They would come in forms of late payment, whereby a percentage of the bill's cost will be added to the bill if it was paid late. Similarly, users would have to be very aware of the re-activation cost that will be incurred if the phone was disconnected from the service. 

Made up your mind yet?

There is sure to be a plan to suit your lifestyle, whatever that may be. There is sure to be a service provider that meets your desired requirement, and there is definitely a handset that you will fall instantly in love with when you see it. 

It would just have to be noted in mind that when selecting the right plan and the right handset, there would be some things to take note of. There will be the need to provide proper identification as well as occupational details to the service providers you will be signing up with for security reasons. The question of what, how often, where and when the phone will be used for would have to be gone through thoroughly as different usages at different times and different locations would call for specific plans to suit the needs of the users. The choice of getting a handset would rest upon the advice of if you don't need it, don't get it. 

The final decision would ultimately rest upon your shoulders. As in the words of A.C. Benson, "One's mind has a way of making itself up in the background, and it suddenly becomes clear what one means to do".

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