Pay as you go (phone)

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Pay As You Go, often shortened to PAYG, is used as a general term for the concept of a prepay mobile phone. In many countries this is referred to as "prepaid" mobile service.

The concept was initially developed by Eircell in the Republic of Ireland in the 1990s, as a method of letting different types of people (those under the age of 18, those without bank accounts and those without proof of identity) obtain a mobile phone. Originally limited to one TACS handset, costing £99 upfront, the system was an amazing success, despite the high price of calls and a 7p service charge on every operation. The system was branded as Ready To Go, a name still used by Vodafone, who now own Eircell.

A user would buy a phone, usually pre-loaded with some amount of credit, and would purchase extra credit when required. A call cannot be made unless the user has the amount required for that call's minimum charge. Some networks charge more for the credit than you get in call value, often due to service charges and VAT on phone calls; however the opposite is often true, with users paying, for example, €20 for €22 call credit.

The concept has since been copied in many other countries, with virtually every network in every European country supporting it. On many networks, such as Ireland's Meteor, Pay As You Go is the main mode of operation, with pay monthly account phones being very much second-class. Conversely, in the United States, account phones offer the best features with pay as you go services being far more restricted in functionality. In developing countries pre-pay tariffs are chosen by the overwhelming majority of subscribers - in South Africa, for example, over 90% of users are on a pre-pay tariff.

Often, Pay As You Go customers pay more for their calls and SMS messages, and are limited in what they can do with their phone - calls to international or premium rate numbers may be blocked, and they may not be able to roam. These limitations are often due to the complexity of managing the credit system for high price calls, or when the user was not on their home network.

In the United Kingdom, operators have started placing restrictions on PAYG users (for instance, having a minimum topup amount of more than £10) and raising the price of PAYG phones in an effort to attract users to contract plans (which tend to earn more money than prepay overall).

1 PAYG roaming
2 Unregistered prepaid phones and terrorism
3 Notable PAYG branding
- 3.1 Europe
- 3.2 North America

[edit] PAYG roaming

In the early years,roaming often would only work within an operator's own network. Roaming on other networks was generally not permitted. The reason was that the home network has no way to bill calls in real time. There needs to be a mechanism to bill calls, SMS (text) and data use to the account holder's home network. The mechanism used to allow roaming is accomplished in a variety of ways. However, most prepaid cards worldwide now offer roaming in one form or another, though some still do not, such as T-Mobile USA.

One method is for the PAYG subscriber to dial a "trigger" number from the foreign location. The home service will return the call. When the service calls back you are being charged for the cost of the service calling you back. The service will then allow you to enter the roaming number of the party you wish to contact. The disadvantage of this method of roaming is that you will not be able to dial numbers directly from your handset

Another method employed by some operators to complete roaming calls is to dial a sequence of numbers including access digits to access the home service followed by the roaming number that is desired. This method of roaming also will not allow direct dialling from the handset.

A third method, which is increasingly common, uses a technology referred to as CAMEL (Customized Application of Mobile Enhanced Logic) which allows immediate billing for the home network. This method of roaming is the most transparent to the mobile user since the subscriber can direct dial all calls, as in the home country, without any sort of "callback" scheme.

[edit] Unregistered prepaid phones and terrorism

A potential problem with PAYG mobile account service is that prepaid mobile accounts can be manipulated freely for criminal or terrorist activities because the criminals or terrorists can easily swap to other prepaid accounts because of the anonymity of prepaid mobile accounts in some countries. There are a number of planned bombings by terrorists that uses mobile phones to blow up infrastructures such as during Madrid train bombings and the series of explosion incidents in Southern Thailand. However, many countries require prepaid mobile users to register their phone lines.

[edit] Notable PAYG branding

[edit] Europe

Virtually every operator offers PAYG services, often as their main, or sole brand, with few being more notable than others. Eircell, now Vodafone Ireland, were the first operator in the world to offer a branded PAYG service, Ready To Go.

[edit] North America

North American providers give preferential treatment to post-paid accounts, but features are improving for PAYG systems. Most major North American cell carriers provide a branded PAYG service. Almost all North American mobile virtual network operators use PAYG as well.