I’m talking to my friend about Cell Phone rates for Rogers because she’s thinking about renewing her phone, I informed her that since she still has the old 3 year plans Rogers is going to force her to switch to the “new” 2-year terms if she wants to upgrade her phone. Because of the “new law” that was passed in 2012 that supposedly forbid carriers from offering 3 year terms. From my understanding of the policy that the CRTC released was customers CAN opt out of their contract after 2 years without paying any penalty. How that got changed to 3 year plans are illegal now is beyond me. But Carriers like to twist the law in their favour to make more money obviously.
So anyway, I decided to do a calculation on the plan I had before vs now. When the iPhone 3G first came out in Canada I had a pretty cheap voice plan. It was 25 dollars + 10 dollars for 200 mins day time + 50 bonus minutes, unlimited evenings and weekends starting at 9 + Unlimited text messages and Caller ID. For me this was enough since I do more texting than talking on the phone. Then the iPhone came out and Rogers required a data plan to purchase the phone for the subsidized price. At the time of launch Rogers was the exclusive iPhone dealer in Canada. It wasn’t until the release of the iPhone 3GS where Telus and Bell were able to sell it. Adding a data at the time was simple. They offered the promotional 6GB data for 30 dollars extra. This is 3G data so it wasn’t fast nor was it slow. For browsing the web at the time was fast enough, 6GB of data was a lot. Especially since tethering wasn’t much of an option then. With the data plan added to my existing voice plan, I was paying a total of 55 dollars a month + tax. This was a 3 year term of course so after 36 months the plan would cost me $1,980. BTW, the iPhone 3G came out in 2007. They introduced the 6GB data plan at the same time.
Now, let’s talk about the present. As of December 2012, the carriers have deemed it illegal to offer 3 year terms to their customers and have lowered the term to 2 years before you can upgrade your phone with no penalty. Sounds good for customers doesn’t it? Being able to get a new phone basically once every 2 years and not have to pay full price for the device. Unfortunately, because we can now upgrade our phones a year earlier than before, the carriers have used that as a reason to increase their prices. Since people are now relying more and more on data. Their new plans now include unlimited Canada wide talk and text. We can use our data to do with talking and texting via voice based apps syuch as Skype, Viber, Tango. or text over wifi using apps like iMessage, WhatsApp or BBM. People don’t need to use their minutes or text messages. But these new plans have unlimited, I suppose that’s good… But at the cost of increase the plans, you be the judge of that.
As of this posting, a 2 year term for 6GBs of data is $125 as month. What you get however is Unlimited nationwide talk and text, caller id, voicemail and 6GB of data. vs in 2007 its 200 minutes + 50 mins, caller id, unlimited text messages and 6GB of data for $55 dollars a month. That is an increase of $75 a month. Instead of $1980 over 2 years it’s 3000 over 2 years.
This about this for a second. Say you’re using the old plan at $55, I’ll even add in voicemail which is about 15 dollars, making it around 70 dollars a month before tax. and you buy the Galaxy S5 outright for 699.95 + tax (currently listed price on Roger’s website). vs if you want the 2 year 6GB plan and be able to upgrade your phone every 2 years, assuming you don’t complain to Rogers retention for a better deal. the only 6GB plan costs $125 a month. That gives you the ability to buy the phone at 229.99 (current listed price as of this posting). You do the math.
$70 a month over 24 months + Samsung Galaxy S5 purchased outright ($699.95) = $2825 after tax (No need to renew your contract or be forced to change your plan)
Now if you do the renew and forced to change plans to comply with their new 2 year term policy
$125 a month + 229.99 subsidized price = $3230 over the 2 year term. If you want to break that 2 year term Rogers will charge you the remaining balance on the device before you can do the upgrade. The difference is $405
over all contract free is $2825 vs $3230 on a 2 year term. Therefore if you’re using those grandfathered plans. It actually ends up being cheaper if you just buy your phones outright than subject yourself to switch over to the new 2 year terms.
So what do I think about the big 3 carriers in Canada jacking up their prices and blaming that we wanted 2 year contracts. I say BS.