Extra phone contract admin fees to watch out for

You’re in the market for upgrading your phone contract or starting a new one altogether. Great! There’s nothing better than unboxing a brand new phone and getting to play around with all the new and exciting features. Before you get to the good stuff, you first need to choose the network that’s going to give you the contract package that’s best for you and your budget. However, something that networks are not always up front about are the initial contract start-up fees. Whether you’re upgrading or starting a new contract, Mobile Store is breaking down extra contract admin fees so that you can prepare your budget. 


Four contract admin fees to look out for


An initiation fee


When upgrading or starting a new contract, your network will charge you something called an initiation fee. This is a charge simply to pay for the administrative process done by the consultant to begin your contract. Luckily, this fee is once-off, however, it is something you should budget for when your first debit order goes off. Initiation fees range between R100 – R150, depending on which network you’re with.


Pro-rata charges


This is something that can shock you when you open that first debit order bill, but don’t worry – Mobile Store is here to explain pro-rata fees. Let’s say you visit your chosen network to start a new contract on the 15th of December. Because you have started your contract during the month, you can’t be charged for a full month. So, for the rest of December, you’re going to be charged pro-rata. This is a small fee each day that’s calculated based on your total monthly contract fee. For example, if your contract is R799 per month, it will be R799 split by 31 days. 


The second thing to note about pro-rata charges is that networks won’t send you a bill at the end of the first month you’ve had your phone. You’ll only receive those charges in the bill at the end of the second month (in our case study, this would be January). So in total, your first bill will include the pro-rata charges for December, the initiation fee, and the January cost of your monthly contract. 


Out-of-bundle charges


One thing you should make very clear when you’re starting a new contract is if you’d like to continue using data or airtime or minutes during the month when your bundle runs out. If you choose this option, you will be charged the network’s standard rates, which may cost more than what was offered in your bundle. If you don’t want to use extra data after your bundle is finished, make sure that is very clear with the consultant.


VAT


Like all things we have to pay for in life, your monthly bill will see a line item for 15% VAT.


What are the additional fees for cancelling a contract?


Uh oh – you want to say goodbye to your smartphone. That’s okay, not all relationships last forever. Unfortunately, because you entered into a contract, you’ll still be expected to pay up-front for the remaining months of the 12- or 24-month contract. You’ll also have to give one calendar months’ notice period before officially cancelling. 


What happens when you don’t pay your contract bill?


When you start a new phone contract, you’re entering into an agreement that you’ll pay your monthly bill. If you don’t, your account will go into arrears and your name could experience serious judgements against it. A number of things could happen:


You’ll firstly lose access to your phone; your account and the debt you owe will go to debt collectors; and it is possible that your name could be backlisted. If you’re blacklisted, you won’t be able to get approval for phone contracts, credit cards or home loans in the future. It’s vital to look at your budget before starting a contract so that you can pay your monthly bills.


Browse phone contracts across 4 networks on Mobile Store


Now that you have the lowdown on all the extra admin fees for a phone contract, you can now get excited at the thought of looking for your dream smartphone! From the latest iPhones and Samsung’s to the trusty Nokia’s, Mobile Store has it all.


Shop for your next phone contract with Mobile Store!