Re-contracting your telco plan? Beware of differing admin charges

Apple's new iPhone 7 is just around the corner as Sept 16 draws closer.

Keen customers of our local telcos would probably have registered their interest to pre-order Apple's new flagship smartphone. Singtel customers who've indicated their interest would probably have received an e-mail to remind them to reserve their phone today (Sept 14) from 3pm. Through the reservation process, you can specify the iPhone 7 model, colour, capacity and preferred method of purchase/collection options.

While all sounds well, we noticed a small note in the T&C (terms and conditions) section of the e-mail reminder sent out to reserve the new phone that raised our eyebrows:

Let's face it, nobody likes admin fees, but it is part and parcel of a business organisation to add a cost to such admin tasks. So it's understandable if you're signing up a new mobile line - depending on the prevailing promotional terms - you may have to cough up an admin fee.

However, if you're already an existing customer of the telco, we find it hard to justify yet another admin fee of $10.70 to be levied just to re-contract with a new phone; it's almost as if you're paying a penalty to be their customer. More so, you're tied to the telco for another two years and the cost isn't absorbed as part of your monthly payment obligations. Yet, that's exactly what Singtel is doing, it seems, starting with the new iPhone 7.

Looks like this new admin fee will be effective from Sept 15, just when the new iPhones are about to be launched.

Just to be clear, the norm is to pay admin charges and any handphone offset charges should you change to a lower-tier plan when your contractual period isn't over.

The new rule effectively makes you pay the admin fee, regardless of the state of your existing plan, when you want to re-contract with Singtel - it doesn't matter whether your previous contract has expired, or you're at the 21st month (when telcos usually allow you to re-contract), or if you're still half-way through the current plan. As long as there's a change to your current plan, you pay the admin charge. Should you downgrade the plan prematurely or end the contract prematurely, other charges will come into play to recover the mobile phone offset offered for your ongoing plan - these aspects don't change. Here are further inputs from Singtel on this matter:-

The S$10.70 administrative fee covers the handling and processing cost for the purchase of a subsidised handset for recontracting customers. It will not apply when customers upgrade to a higher tier Combo Mobile Plan (example, upgrade from Combo 2 to Combo 3).

According to inputs from Singtel and as seen in the above exchange on Singtel's Facebook page, there are a few "escape" options where Singtel's re-contract admin fee won't apply: Re-contract to a higher-tier plan, re-contract online (via singtelshop.com or easymobile.sg), or when you are a user of Singtel Circle nominated keylines, a Red Prestige customer, or a Singtel UOB credit card holder.

So, if you're a Singtel customer, the easiest way to avoid the admin fee is to re-contract online.

Does this admin charge for re-contracting also apply to other telcos?

In short, no.

We quickly reached out to check on the policies of other telcos and we are glad to confirm that M1 and StarHub don't levy an admin fee for eligible re-contractual periods (when your old contract has expired) - no matter whichever plan you will be signing up next. You can also re-contract before your contract expires and not incur any charges - as long as you don't downgrade your plan, since that will affect the handset subsidies provided in the former contract.

This article was first published on Sept 14, 2016.

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