While we all use our cell phones daily for a range of different cellular services, paying additional charges is never a pleasant experience for any of us. Spend cap and data cap are tools that can help you control your mobile phone bill so that you don’t end up paying additional charges.
A spend cap is a monetary limit your mobile service provider allows you to set on your mobile phone bundle to avoid out-of-bundle charges. A data cap is a limit you can put on your monthly data allowance so you don’t exceed your allocated mobile data quota for a given monthly billing cycle.
How spend cap and data cap help you control your phone bill
A spend cap is a financial limit (e.g. £5) that allows you to tell your mobile operator or service provider how much extra money you are willing to pay each month if you exceed your monthly allowance for voice minutes, texts and mobile data. On the other hand, a data cap is not a financial limit but a data limit (e.g. 2 GB) you set for your monthly mobile data consumption.
Let’s use an example to understand how spend-cap and data-cap work to help you control your mobile phone bill. Suppose you have a monthly mobile tariff (mobile plan) that costs you £20 each month and gives you unlimited voice minutes, unlimited text messages and 25 GB of mobile data allowance.
Spend cap example:
- Let us suppose you set your spend cap limit to £5.
- In any given month (billing period), if you use any service that is not included in your tariff, e.g., you make an international call, your mobile operator can charge you a maximum of £5 (in addition to the monthly £20 bill) during that month.
- Once you have reached the £5 limit, you will no longer be able to use any out of bundle services during that month unless you increase your spend cap limit.
Data cap example:
- Let us suppose you set your data cap limit to 20 GB.
- In any given month (billing period), if you hit the 20 GB limit on your mobile data, your mobile operator will stop you from going over the limit by either reducing your speed or switching off your mobile data until the next billing cycle or until you increase your data cap limit.
- The limit applies to mobile data only, which means you can still continue making and receiving calls, sending and receiving text messages, and using Wi-Fi on your phone.
What does a data cap mean for your monthly mobile tariff?
A data cap is a utility provided to a customer by their mobile service provider. Unlike a spend cap, a data cap is not a regulatory requirement in the UK. Mobile operators use this capability to help their customers block any additional data usage outside their allocated monthly allowance. With a data cap, customers can use the technology within the mobile network to limit their monthly data consumption.
If you are using a data cap with your mobile service bundle, you need to select a data cap limit. If you, for example, choose 20 GB as your data cap limit, it means you are telling your service provider that you do not want to consume more than 20 GB of mobile data in any given month.
A month in this context does not mean a calendar month (e.g. Jan 1st to the 31st), but it means a billing period that starts from the date you started your mobile phone subscription with your service provider. In any given monthly billing period, as soon as you hit the 20 GB limit, your mobile service provider will stop you from consuming any more mobile data.
Depending on the service provider, your mobile data may be turned off until the next billing cycle, or your mobile data speed may be reduced considerably until the next billing cycle. If you decide not to change the data cap limit, your mobile data will be fully active again in the next billing period.
However, the data-cap is all about mobile data, which means you can still use all other services included in your monthly tariff, such as voice calls and text messages. Of course, you can still connect to Wi-Fi on your phone to use data that way. Your mobile operator may send you promotional offers to buy data bolt-ons (add-ons) once you have reached your data limit.
What does a spend cap mean for your monthly mobile tariff?
A spend cap is a utility offered to customers by mobile service providers as part of a regulatory requirement in the UK. It allows customers to set a monetary limit to avoid any additional charges on top of the monthly subscription fee they pay to the service provider.
The spend-cap limit is for any ‘out of bundle’ charges that are not included in the monthly subscription. Unlike a data cap which only controls mobile data consumption, a spend-cap is for all cellular services, including mobile data, voice calls and text messages. However, any third-party charges linked to your mobile bill (e.g. paying for charity in a given month) are not restricted by the spend cap.
If you use a spend cap with your mobile plan, you must select a spend cap limit. For example, if you choose “£0” as the limit, you are telling your service provider that you do not want to access any services that are not already included in your mobile plan.
If you set the spend-cap limit to any monetary value higher than £0, for example, £5, it means you are allowing yourself to consume services that are not included in your monthly bundle (e.g. calls to premium numbers). With a spend-cap enabled, as soon as the out of bundle charges reach the spend-cap limit (£5 in this example), you will no longer be allowed to access out of bundle services in a given billing period. However, you can continue using all other services included in your monthly bundle.
Having a spend cap as part of your service bundle gives you the control to limit the consumption of any out-of-bundle services that are not part of your subscription or for which you do not have an active bolt-on (add-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 without being impacted by the spend cap.
However, suppose your mobile operator charges you extra for roaming in a country, e.g. £6 per day, to use your home allowance in Canada. In that case, you will only be allowed to use your home allowance in Canada if you have set your spend cap limit to £6 or higher. But as soon as you have reached the limit, you will not be able to roam any longer during that month unless you increase your spend cap limit or buy a bolt-on to continue roaming.
You can change your spend cap limit as and when needed and as often as your mobile operator allows. For clarity, a spend cap doesn’t restrict you from calling emergency numbers. However, it is always strongly advised that you check directly with your mobile service provider to find out which services are exempt from spend-cap.
Like everything else, the spend cap utility has its pros and cons. 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. To do that, you would either need to buy an add-on or use the option provided by your mobile operator to modify or remove the spend cap limit.
While spend cap and data cap are two powerful utilities to help you control your cell phone bill, they are by no means your only options. Since mobile data has become one of the most frequently used cellular services, managing your mobile data consumption can help you stay on top of your bill. I have written a dedicated post on how to avoid data overage charges to help you take some practical steps to control your mobile data usage.
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 extra support, especially when preparing for a new job, studying a new topic, or 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.
