The difference between prepay and postpay internet services
Last week we briefly introduced you to the importance of internet services, the general categories available in Fiji and a few of the important items to look for when subscribing to a service.
In this article, we will talk about the difference between prepay and postpay services.
Now in the world of internet and mobile services, different terms may be used by different countries and even different internet service providers (ISPs) or mobile service providers to describe the same thing.
For example the terms “prepay” and “prepaid” are often used to describe services that are paid upfront before you use them. It also often described as “pay as you go”.
The terms “postpay” and “postpaid” are used to describe services that you “use now and pay later”.
In some countries the terms “contract” or “plan” are used to describe postpaid services.
What to consider before choosing to go prepaid or postpaid (contract)
Deciding between prepaid or postpaid internet services should be a well thought out and planned exercise.
You as consumers should consider both your ability to pay and your internet usage.
Consideration must be given whether the internet service you intend to use is only for personal use or for both personal and work/business use.
Also you need to carefully think about the documents or files you are most likely to download on a regular basis such as videos, large documents, photos or whether you will be using the internet primarily to communicate with your relatives overseas through Skype, MSN Messenger or other communication applications available out there.
Remember photos and videos have large file sizes than documents or other text-based files.
And if you are using Skype video, i.e. talking to someone through a webcam, then expect your data usage to be much higher than just having voice or email communication.
Getting a good idea of your internet habits would be a way to start.
Also if you are going to share a service, consider the habits of those other users e.g. family members or school kids.
If you use the internet very regularly, that is, you use the internet every day for email, voice/video communication, downloading large documents, then a postpaid service would be a better choice because you will have a data cap and be required to pay a lesser rate than the prepaid service.
If you do not use the internet often, or you only use it when you really need to, then a prepay service is a more convenient and cheaper alternative.
Note that on postpaid service “use it or lose it” system exists where you pay a flat rate for a set amount of data per month.
You will continue to pay your monthly bill even if you have not used the prescribed data, i.e. all unused data is lost and not added to the subsequent month.
The “use it or lose it” system also exists in all prepaid internet services in Fiji as well.
For example a $5 recharge on your internet service will give you seven days to use the prescribed data.
We now look at the pros and cons of each service.
We wish to stress that these are related to what is available for internet services in Fiji in terms of prices, contracts etc.
Prepaid - the advantages
- No hassles with contracts and documentation associated with postpaid or contracts;
- You pay for what you use. There is no fixed amount to be paid. It’s simply “use it or lose it” system;
- Usage can be controlled to reduce costs;
- No hidden fees;
- No need to pay other costs like security deposits, termination fees etc - one ISP charges $200-plus security deposit depending on credit check result for postpaid;
- No credit checks, no income-based restrictions; and
- Enjoy same speed as postpay service.
Prepaid - the disadvantages
- Rates per MB of data are higher than postpaid internet services. For example one ISP (wireless) charges five cents per MB per month prepaid, while the postpaid equivalent is only two cents per MB;
- Prepaid data have limited validity periods depending on recharge amount. For example one ISP has a $5 recharge amount for 200MB which is valid only for seven days;
- You can end up paying more if you are constantly topping up small amounts; and
- No paper records of your usage, amount of money used. If people don‘t record how much they have spent on recharge cards then there is no record. It requires meticulous record keeping of recharge cards before it gets thrown away.
Postpaid - the advantages
- Modems are often given free or at subsidised prices;
- Lower rates than prepaid services;
- Ability to choose from more than one data plan;
- Other services offered as part of the package, for example, free email address, anti-virus and network support; and
- Some ISPs offer a bundle of services under one contract or plan that may be integrated with a phone service (landline and mobile)
Postpaid - disadvantages
- Signing up can be a hassle and costly to the consumer - credit checks, providing documentation and verification;
- Data caps have a limited lifespan (e.g. a month) under a “use it or lose it” system;
- Security deposit is required before the service is provided; and
- Locked/Fixed contracts and termination fees are a big disadvantage and unfair to consumers.
- Next week: Simplifying some of the IT jargons used in internet services