Cellular phone subscription plans include monthly, semi-annual, and yearly options that allow subscribers to pay for their cellular service in advance. Monthly plans typically require the subscriber to pay for the first month of service and 11 months of recurring charges before using the service. Semi-annual plans require subscribers to make payments every six months, saving them money if they do not use all 12 months of prepaid service within one year. Yearly plans require payment upfront for all 12 months of service, but like semi-annual plans, they provide a discount over the normal monthly rate provided by most mobile operators.
Many mobile operators offer yearly or biennial starting packages because subscribers with repeated billing cycles tend not to exceed their allowed minutes for the month. The mobile company will have to pay to maintain its towers and network coverage even if some subscribers are not calling or sending text messages.
This allows them to distribute their limited resources more efficiently since tower capacity is usually shared amongst all nearby users, while active users only tax cellular networks. If a subscriber does not exceed their monthly minutes, they can still be billed by using ‘pay as you go’ plans where they may choose how much credit to add on top of what was provided in their regular starting package. This service is sold at face value without any discounts applied, meaning that every extra minute used will cost the same as normal rates would dictate.
Most modern smartphones such as Blackberries and iPhones require a data connection to use the device’s other features. Since many carriers do not have unlimited plans available for smartphones, they are likely to prioritize regular subscribers who have chosen smaller monthly packages. Subscribers with unlimited data are more likely to experience fewer cellular service interruptions than those with low capped packages.
These subscription options can be combined with voice mail and text message bundles that allow subscribers to cheaply receive calls and messages while not being charged extra for every text or minute used. The exact contents of each package can vary depending on which mobile operator a subscriber selects.