No contract broadband plans

No-contract broadband is a great choice if you want flexibility in your Internet plan, though you may pay a little extra for that flexibility.

Our guide explores the benefits and downsides of no-contract broadband.

Why choose no contract broadband instead of a 12-month or 24-month plan?

While locking yourself into a 12- or 24-month broadband plan can sometimes save you money in the short term through lower set-up and modem fees, the long-term proposition isn’t always so favourable. With a fixed-term contract, you generally have to pay an early exit fee for cancelling before the end of your contract.

Depending on the plan, this fee can be steep enough to outweigh any upfront savings you might have received. If you plan on heading overseas, moving into a home that already has an existing plan or just want to change providers, you are obligated to pay the early exit fees.

With so many Internet Service Providers (ISPs) to choose from these days, being able to switch freely between them is key to getting the best deal. This is especially important as new technologies like 5G and Hyperfibre are rolled out, as not all ISPs are able to offer these. That’s why it’s worth opting for a casual, month-to-month broadband plan whenever possible.

No contract broadband plans can be a useful way to “try before you buy”. By spending a month on a no-contract plan to try it out, and then moving to a longer contract if you’re satisfied, you’ll often only be spending a few dollars more than if you’d committed to a longer plan right away. However, this is largely dependent on the setup, installation and modem fees. It’s well worth paying attention to these before signing up.

How to compare no-contract broadband plans

Because the fees and other terms and conditions can vary so widely between providers, it’s a good idea to compare your options thoroughly. There are a lot of advantages to choosing an open term broadband plan, but making sure you’re getting value for money is all about comparing a wide range of options.

Speed and connection type

Fibre is the fastest and most reliable type of broadband, and even though it typically does cost more than copper connections, some providers offer the most basic fibre at the same price as ADSL and VDSL. While VDSL has download speeds of up to 70Mbps in most cases, you could experience up to 100Mbps with fibre.

Depending on where you live, you could have access to fibre, ADSL, VDSL or wireless broadband. Fibre is the fastest and most reliable with speeds of up to 950Mbps for downloads on the more expensive plans. Entry-level fibre gives download speeds of 30Mbps, and standard fibre has download speeds of up to 100Mbps.

VDSL is a form of copper broadband with download speeds of up to 70Mbps. It is faster than ADSL and is still worth considering if you don’t have fibre available at your place.

Wireless broadband is delivered over the 3G, 4G and 5G networks. 4G is comparable to fibre and is the most readily available, while 5G is currently only available in some of New Zealand’s more densely populated urban areas.

Data allowance

It’s important to choose a plan that has the right amount of data for your household. If you are light Internet users, a data cap of 120-200GB can be more than enough. For households with heavy streamers of Internet TV and gamers, an unlimited plan removes the stress of worrying about how much data you have left for the month.

Not sure how much data you need? Try out our data usage calculator.

Fees

Unfortunately, no contract broadband plans generally carry more fees than contract plans. Adding all of these together, it’s often not worth staying on a plan for only a single month.

Typical fees include:

• Activation fee. A fee for activating your plan when you join a provider for the first time, also known as a setup fee.
• Casual plan fee. Some providers might charge an additional fee specifically for casual plans.
• Installation fee. Depending on the connection requirements, there might be installation fees.
• Modem charge. Modems are often free with long-term contracts, but choosing open-term means that you will either need to purchase one upfront or pay a monthly rental fee. Alternatively, you could use an existing compatible modem.
• Additional data. If you are on a plan with a data cap and you hit your limit during the month, you may need to purchase data add-on packs or pay for additional gigabytes used.

Once you add all these fees and charges up, you could end up needing to pay hundreds of dollars just to sign up. However, if you shop around and compare the fees from different ISPs, you might find a cost-effective solution. Some providers are now offering plans that have little difference in overall costs to contract plans.