Could an annual mobile plan save you money?

Annual prepaid mobile plans can cost as little as $150 a year. Here's how 365-day phone plans work, who they're best for and whether they offer better value than monthly plans.

For many Australians, their mobile plan is just another expense that flows out of their bank account each month, alongside the likes of streaming subscriptions and energy bills.

But is there an alternative, and potentially cheaper, option to monthly phone plans? One that isn't as easy to set and forget?

While the upfront cost is greater, annual prepaid plans can be better value over the course of a year.

So just how cheap can annual phone plans be? And which mobile users could they prove to be a good match for? Here's what you need to know.

What is an annual mobile plan and how does it work?

Annual phone plans, also known as 365-day plans or long-expiry plans, are a variation of the monthly prepaid plans many mobile users will be familiar with.

"Long-expiry plans are similar to regular phone plans, but the idea is that rather than paying month to month, you pay for the whole year upfront," explains Alex Choros, telco expert and managing editor of WhistleOut Australia.

"Pricing tends to range between $150 to $400 for the year, depending on how much data you want. You're looking at 140 gigabytes on the lower end to as much as 500 gigabytes.

"It's worth noting that data is for the entire year though. So, 140 gigabytes, for example, works out to be the equivalent of just over 11 gigabytes a month."

Are annual prepaid plans cheaper than monthly phone plans?

The least expensive annual prepaid plans on the market at present start from around $150, according to WhistleOut data - the equivalent of $12.50 per month.

That's slightly less than the cheapest comparable monthly options.

Generally speaking, Choros says, individual service providers tend to offer their annual plans for less than their monthly plans.

"If you're looking at plans from the same provider, annual plans should be cheaper 99% of the time - you're getting a better deal in exchange for making a longer commitment and paying upfront."

This doesn't necessarily hold true for providers and plans across different mobile networks though (i.e. Optus, Telstra and Vodafone).

"If you're comparing, say, Boost Mobile's (Telstra network) annual plan to a monthly plan on the Vodafone network, you might still get a better deal with the month-to-month option," Choros says.

Which annual plans offer the best value?

Like monthly prepaid offers, many of the cheapest 365-day plans available at the moment are from smaller telcos and service providers.

"In terms of plain value right now, we're seeing really good deals from Amaysim, OnePass and Kogan in terms of cheaper plans that really over index on data per dollar," Choros says.

For mobile users on the hunt for a lower-cost alternative to Telstra though, Choros says that Boost Mobile's annual plans could be worth looking at.

"Boost is a much cheaper option than going with Telstra, and it's the only provider with access to the full Telstra network.

"All the other providers on the Telstra network have a slightly smaller footprint, so you don't get coverage in some regional and rural areas like you do with Boost and Telstra itself."

Who should consider an annual mobile plan?

Ultimately, an annual plan may not be the right option for everyone.

First of all, mobile users will need to be able to afford to stump up hundreds of dollars to cover the cost of the plan in advance.

Choros says that these plans are also unlikely to be a good fit for heavy data consumers, or users who won't be able to ration their data over 12 months.

"You should ideally have pretty consistent data needs. You've got your data allowance for the entire year, so there's the risk that you could run out if you're likely to blow 50 gigabytes in a single month."

Annual plans are also designed for people who already own their own phone outright.

"All these plans are also SIM-only - you can't pair a new phone with them," Choros says.

"So, you'll want to already own a phone that you're happy with using for the next year. Or, if you're planning on buying a new phone, you're happy to buy it outright rather than on a plan."

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