Difference between spend cap and data cap

While we all love using our mobile phones whenever and wherever we want, nobody enjoys having to pay additional charges. Mobile operators understand that, and they do offer capabilities that help customers avoid bill shocks. However, there are times when mobile operators have to provide certain capabilities in order to meet certain regulations. In the UK, the regulatory body Ofcom introduced a new regulation on 1 Oct 2018 for mobile operators to set mobile bill limits. If you speak to mobile operators in the UK, this limit is usually known as spend cap or spending cap.

A spend cap is a monetary limit your mobile operator allows you to set on your mobile tariff to avoid any out-of-bundle charges; a data cap is a limit that can be set on your monthly data allowance so you don’t exceed your allocated quota for the month.

What is spend cap?

The spend cap allows customers to set a monetary limit on any additional charges on top of the monthly subscription fee they pay to the mobile operator. This limit is for any ‘out of bundle’ charges that are not included in the monthly subscription. This limit is also for any services that come to the customers directly from the mobile operator including calls, text, and data. Any third-party charges, even if they are paid through the mobile bill, are not covered by spend caps.  

For example, let’s say you have a mobile subscription where you pay £20 per month to your mobile operator for unlimited minutes and texts and 20GB of data. With this allowance alone (i.e. without any special add-ons or promotional offers), if you make an international call, you will be charged by your mobile operator at international rates. In the same scenario, if you have spend-cap enabled with a spend-cap limit of say, £0, you won’t be able to make that international call. Alternatively, if you set your spend-cap limit to something higher, say, £10, your operator will let you make that international call and charge out of bundle fee (at international rates) until you have consumed £10. As soon as you hit that £10 limit, you will be stopped from using any ‘out of bundle’ services. You can still, of course, continue to use all the other services that are included in your monthly allowance and are hence not “out of bundle”.

Spend cap puts you in control

Spend cap limits you from doing anything that is not included in your monthly bundle or anything for which you don’t have an add-on (also known as bolt-on). If your mobile operator allows you to use your home allowance in any other country for FREE (e.g. EU countries), you will still be able to use your allowance there. If however, your operator charges you extra for roaming in a country (e.g. £5 per day for using your home allowance in a certain country), then you won’t be able to use that service if you have reached your spend-cap limit or if your limit is set to £0. But, you can change your spend cap limit as needed and as often as your operator allows you to.

As a customer, it is up to you if you want to choose a spend-cap limit at all. If you want, you can choose not to have any spend-cap and as a result no restrictions. On the other hand, if you decide to take the spend-cap functionality, you can choose a monetary limit available from your mobile operator. If you choose £0, it means you completely restrict any charges outside of your allowance should you break your bundle. If you choose anything higher like £20; you may be able to use any out of bundle services until you have reached the £20 limit. Once you have reached this limit, you won’t be able to use any out of bundle services. You may still be able to use all the services that are included in your allowance. Spend-cap also doesn’t restrict you from calling any emergency numbers.

There are pros and cons of everything and the spend cap is no exception. For example, it may be that you have reached your spend cap limit and want to make a call to a premium number starting with 084. In order to do that, you would either need to buy an add-on (also known as a bolt-on) for calling the premium number or use the option provided by your mobile operator to modify or remove the spend cap limit.

Just to re-emphasize, spend-cap may not cover any charges for third-party services. For example, if you are getting any music subscription from an XYZ content provider but you pay for that music subscription through your mobile bill, the spend cap will not cover that. It is best to check any such cases directly with your mobile operator to avoid any unexpected charges.

What is data cap?

Data capping is an operator-led initiative as opposed to a regulatory one. It allows customers to use capabilities built in the mobile network or mobile devices to limit their data usage. Mobile operators use this capability to help their customers block data usage outside of their allocated monthly allowance. For example, if a customer pays £20 for unlimited minutes & texts and 20GB of data; with data-cap, that customer will be prevented from using mobile data as soon as he/she has used up all of the allocated 20GB. Of course, they can still use data through any other paid or FREE Wi-Fi network. Data-capping, as the name suggests, only caps data and nothing else. It is less restrictive and if you have reached your data cap limit, you can still use your phone for any other services available from your operator. Your mobile operator may offer data add-ons (bolt-ons) once you have reached your data limit.

Here are some helpful downloads

Thank you for reading this post, I hope it helped you in developing a better understanding of cellular networks. Sometimes, we need some extra support, especially when preparing for a new job, studying a new topic, or maybe just buying a new phone. Whatever you are trying to do, here are some downloads that can help you:

Students & fresh graduates: If you are just starting, the complexity of the cellular industry can be a bit overwhelming. But don’t worry, I have created this FREE ebook so you can familiarise yourself with the basics like 3G, 4G etc. As a next step, check out the latest edition of the same ebook with more details on 4G & 5G networks with diagrams. You can then read Mobile Networks Made Easy, which explains the network nodes, e.g., BTS, MSC, GGSN etc.

Professionals: If you are an experienced professional but new to mobile communications, it may seem hard to compete with someone who has a decade of experience in the cellular industry. But not everyone who works in this industry is always up to date on the bigger picture and the challenges considering how quickly the industry evolves. The bigger picture comes from experience, which is why I’ve carefully put together a few slides to get you started in no time. So if you work in sales, marketing, product, project or any other area of business where you need a high-level view, Introduction to Mobile Communications can give you a quick start. Also, here are some templates to help you prepare your own slides on the product overview and product roadmap.

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