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Why opting for pay as you go data makes you a winner

At first glance a bundle of data seems to be considerably cheaper than a pay as you go plan. This is an industry tactic intended to fool customers.

Matthew Bingham

Matthew Bingham

As per the image, consider a 500GB bundle of data. The price per month is £1,000 – that’s an advertised rate of £2 per GB. For the same region, the pay as you go is £2.50 per GB. You would opt for the bundle right? The problem is that nobody uses all the data in the bundle. Let’s assume that you use 350GB of the bundle and take a look at how much you would actually pay per GB. The breakeven point is 400GB. If you use exactly 400GB per month with either of these types of plan, the cost per GB will be the same at £2.50.

Which type of plan do you think a provider will make more money on? A 500GB bundle where you only use 350GB, or a plan where you use every GB you pay for? With a pay as you go plan a provider makes a fraction of profit per GB (or in some cases nothing at all if they instead opt to charge a monthly management fee). In contrast, any data that you do not use from your bundle is pocketed by the provider – that could be hundreds or thousands of pounds per month.

So just remember, the advertised rate per GB for a bundle is usually pretty good – but that assumes that you use every last drop of data. Unless you know exactly how much data you will be using and will use the entirety of that data - pay as you go plans will save you money.

This article is an extract from the 10 secrets free ebook

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