Phone companies are piranhas in today’s consumer markets. Buying a mobile phone with or without a contract can be confusing and expensive. But in the event that you need an “out”, how do you leave your current mobile phone provider??
It depends on factors such as: which provider you are with, (Telstra, Optus, Vodaphone, Three, Crazy John, Virgin, etc.), what kind of commitment you have (24-month contract, pre-paid, capped plan etc.) and how much you are prepared to fight and pay to get out.
Conveniently, phone companies do not charge you to switch to them. Many companies, assumedly in response to bad customer service wraps, offer customer loyalty programs which often assist in reducing your contractual spend or alter your plans, if you remain with the service provider. However there are multiple hidden costs in trying to exit a contract prior to the contract end date.
You can terminate your plan at any time and the termination fee may be calculated as either the remaining value of the phone, or (for a 24 month contract) a base Early Termination Cost (ETC)*remaining months/24. The ETC is different depending on your monthly spend, but is always stipulated in your contract.
For most Optus plans the contract cancellation fee will equal the monthly access fee for the duration of your plan.
For capped plans, the percentage of termination fee you are required to pay decreases the longer you have been with your plan. Full termination fees range from $150-$230 depending on the value of your cap, eg. $79 cap = $185 fee. On top of this is the cost of the handset which also needs to be paid out.
Three will allow you to move between their capped plans monthly, but only if you are moving upwards in cost. With their capped plans if you have mobile installments on top of the cap, you are required to pay out all handset installments and the minimum monthly spend for the duration of your contract. This goes for Bonus Plus plans as well, capped at $55 per month (if you are on a plan with a higher minimum monthly spend).
If you have no minimum term then the only termination fee you face is getting your phone unlocked from the provider if it’s locked. It’s also easier to speak to someone about canceling your mobile phone contract as cancellation fees are contract specific and hard to find on-line.
