April 14, 2016

We hope you didn’t think this would be simple. Because the reality is that there are many pro’s and con’s to both pre-paid and post-paid offerings, which need to be evaluated based on your lifestyle. With that in mind, let’s jump in and explore the positives and negatives of both sides of the fence…

Historically, pre-paid (pay-as-you-go) has always been the more expensive option, and you’d achieve cheaper rates through taking out a cellphone contract. However, more recently, we’ve seen that pre-paid prices have come down … making the decision to choose between the two quite a tough one!

Is prepaid really the cheaper option?

It’s a tricky question to answer. Trying to draw a true comparison is like trying to compare apples with pears. On post-paid (contract) you generally get a lot of inclusive value with your contract which goes towards a certain number of inclusive calls, SMS’s and data (for example, you’ll pay R299 a month for a MTN My MTNChoice+ S package which comes with 2GB of data, 100 minutes of calls, and 100 SMSs). This makes it impossible to calculate how much you’re really paying for each call, SMS, or MB of data. With prepaid, you pay for what you use and so you know exactly how much a call, MB of data, and SMS will cost you.

What we know for sure is that certain types of cellphone users are very well suited to contract rather than prepaid. If you’re a high-end user and are on your phone 24/7, then an unlimited post-paid package will work out much cheaper for you than prepaid. Likewise, if you’re someone who only tends to use data (in a 3G dongle, tablet, or router), then it may be beneficial to remain on post-paid as pre-paid data bundles can be more expensive than post-paid data packages.

It’s also important to highlight that the pre-paid option has a lot more time-based deals which can often be advantageous – if you’re willing to invest the time to use these deals properly. For example, unlimited calls for 60 minutes for R5, or X amount of Gigs until midnight. If you try to use these deals, you could end up saving a lot of money! Problem is, usage is on their terms, not yours.

Lastly, calls are GENERALLY cheaper on pre-paid.

So, when would moving to pre-paid be a wise idea?

  • If you don’t really need a new phone… but your contract has expired (or, you’re taking one out for the first time); or if you’ve decided to rather buy your new phone through your bank (some banks offer finance plans for new phones)… so you don’t need a phone as part of your cellphone contract.
  • If you’re happy to top up each time you run out of airtime … or you’re ok being unable to make calls for a while!
  • If you’re concerned about over-spending on your cellphone (which happens to so many people) and would prefer to have a hard limit you can physically control … i.e. you literally can’t spend any more than the airtime you’ve bought.
  • If you want the flexibility of having no tie-in to a specific contract and can easily move between networks as and when you need to.
  • If you want to take advantage of some of the time-based prepaid deals.

So, when would moving to post-paid be a wise idea?

  • If you need to get a new phone with your contract.
  • If you travel overseas quite often and need the features of international roaming (it is possible to roam on prepaid, but it is limited).
  • If you always need to be able to make calls (its not fun running out of airtime when you have an important call to make).
  • If you want to be able to access the complete range of cellphone services including international roaming, data calls, faxing etc.

Prepaid sounds a lot simpler than the complexity of postpaid, right?

Please don’t be misled by the perception that pre-paid will always be the simpler option. It’s not as straight-forward as you may think. There are now tons of different pre-paid tariffs and you need to make sure you are choosing the right one, suited to your needs. Take a look at one of our other blogs where we discuss this topic in more detail:

So where does this leave you?

Bottom line, it’s a matter of preference. You shouldn’t decide based only on cost. It’s a lifestyle issue that should impact your decision too.

It is often better (and more cost-effective) to be on the perfect contract for you based on your unique behaviour than to simply move to prepaid. If you need help in working out what contract is right for you, use our service. Tariffic’s software analyses every call you make, every bit of data you use, and every SMS you send in order to build a model on your unique cellular behaviour. We’ll then apply this model to every combination of contract and bundle available in the South African market to find you your perfect cellphone! And because we’re independent, we’ll show you recommendations on every cellular network.

We can help you save up to 40% off your corporate cellphone spend

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