Postpaid mobile phone plans make it easy to afford a new smartphone and get the most competitive call, text and data rates.
What is a postpaid plan?
As the name suggests, postpaid plans require no upfront monthly payment, but instead rely on payment after a set period – usually a month – of usage. The amount you pay is generally based on both a set monthly minimum charge, as well as excess fees if you exceed your plan's included value.
Postpaid plans work on an accrual basis, with a predefined value of calls, texts and data which you can use for a set fee. There will also be excess usage charges if you go over your quota limits. These plans are contract-based, although the specifics of the contract terms can vary between telcos and even value tiers. Typically, postpaid plans will be offered on a monthly basis, or in 12 or 24-month variants.
Why would I choose a postpaid plan?
The key driver for postpaid plans is the ability to bundle in a new smartphone with your contract plan and pay off the cost of the phone over the term of the contract.
Most providers will subsidise the retail price of a handset when you sign up for a contract. That means that so as long as you're using the service and want that shiny new phone, it can be a solid way to break up the cost of owning a new device.
That said, it's worth doing your sums carefully to ensure that the value is there. A contract allows you to spread the lump sum cost of a new handset over a longer period rather than having to stump up the cash upfront, but it can end up costing you more in the long run.
Postpaid contract plans offer an easy, no-fuss way to access mobile services, because any additional use over and above your contract terms is automatically added to your account, to be paid at the end of each contract month. That means you never have to worry about running out of credit during a month, as you would with a prepaid plan.
Because you're generally signing up for a longer term period, the included calling, texts and data value is generally higher than for the same cost on a prepaid plan. If you're a heavy user, especially for data, a postpaid plan is often your best bet.
What are the downsides of postpaid plans?
When you sign up for a contract phone on a postpaid plan, you're on the hook for the entire cost of the contract even if you lose or break the phone. If you do find yourself without a handset, you're still going to be paying for the service even if you're not using it. To make use of the contracted quota, you'd need to acquire another phone.
Once you've signed a two year contract, upgrading to a newer smartphone or even a better plan isn't necessarily an easy task.
Postpaid plans don't always do a great job of warning you when you're going over quota, which means that it's entirely feasible to end up with a larger than expected bill at the end of the month if you've been especially busy on your smartphone.
While the data costs associated with contract phones are generally a little better than their prepaid counterparts, it's not always true that you'll always save money going on contract. Our Mobile Phone Plan Finder can assist you by comparing the total cost of a contract versus the same phone outright on a prepaid plan.
Do I have to bundle a smartphone with a postpaid plan?
Not at all. There are plenty of SIM-only plans that work in the same contractual way as postpaid plans but without the included handset repayment sections.
How should I compare postpaid plans?
Overall contract cost: The monthly charge for the service is laid out in the contract and is easy enough to compare, but it's the minimum full contract cost that's also worth considering. If you can buy a smartphone outright and get similar service on a cheaper prepaid plan, it may not be worth signing that contract.
Included extras: Many postpaid plans come with additional inclusions to tempt you, from bonus music streaming subscriptions, to frequent flyer points to bundled international calling provisions. Depending on your usage these may present great additional value, or alternatively be of little consequence in your overall buying decision.
Data charging: In the postpaid space, the number of plans that offer limited local call quantities is rapidly diminishing, replaced by "unlimited" call and text plans. Data is where most postpaid plans are genuinely differentiated. If you're busy on your smartphone, go for a plan with plenty of data, but also make sure you can easily buy data top-ups and that your provider counts data charges per KB block, rather than a larger amount as this will eat up your data quickly. Check out our guide to how different providers count data if you want to know more.
Network coverage: While there are numerous postpaid providers, they're all using one of just three networks, run by Telstra, Optus and Vodafone. Not all providers have access to those carrier's 4G networks, or the full network map. While network coverage maps are largely indicative rather than entirely accurate, they're a good gauge of overall coverage that can help you decide which provider to choose. Our guide to the difference between 3G and 4G covers this in more detail.
Roaming costs: Most postpaid plans will allow you to use your phone overseas, but the global roaming fees they charge can vary quite widely. If you travel regularly, check if you can buy international calls/texts/data packs for usage to avoid serious roaming bill shock. Because every postpaid plan simply accrues values based on your usage, the last thing you want to do is be faced with a hefty bill when you return from your overseas travel.