Mobile customers should be alerted by text message when they are about to exceed their cap and a warning on how much this could cost, the Australian Communications and Media Authority (ACMA).

The recommendation was published in the regulator's report, Reconnecting the Customer, which also proposed an end to misleading advertising terms such as 'cap'.

Instead, telcos should reveal how many two-minute phone calls can be made, including flagfall costs, to make it easier for customers to compare the cost of different post-paid plans.

ACMA is giving the industry a chance to implement the changes as part of a new Telecommunications Consumer Protection (TCP) Code by February 2012.

"The industry should address these concerns as soon as possible so the industry is now formally on notice to reflect these outcomes in the new TCP Code," ACMA Chairman, Chris Chapman, said.

"If the industry doesn't develop a code that addresses the ACMA's concerns, the ACMA will mandate changes through direct regulation."

Optus has already warned that 'unit pricing' would not be a simple solution to the problem of complicated billing processes.

Speaking at the Australian Communications Consumer Action Network's (ACCAN) annual conference, Maha Krishnapillai, Optus' director of government and consumer affairs, said: "Some form of unit pricing will be possible but because of the number of different plans and the different ways people use things, I think in some ways that will be harder to do than people realize."

However, Optus has introduced new alert systems to warn customers when they are approaching their cap and the consequences of going over their limit.

Optus customers on current postpaid plans will receive a text message alerting them if they exceed 80% of the included value in their mobile plan. The new alert system will apply to the voice and text as well as the data component of a customer’s mobile plan, whichever is reached first.

Customers roaming abroad will be alerted to the cost of every 15MB used. Using 3G data overseas on an Optus plan costs $20.48 per MB, which means customers will be alerted once they have racked up a bill of $307.20.