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Strange Moto G prepaid pricing?


Userlevel 2
There seems to be something strange about the pricing for the Moto G. Motorola sells the 8GB international GSM version for $US 180 unlocked in the US. Call it C$200. Koodo seems to be gouging for this as a prepaid phone, at $250? On the other hand, they are selling it for $150 as a postpaid plan phone. What's to stop people from buying this at $150 with no tab, immediately cancelling the plan, and using it as a prepaid? I could see the prepaid price being $200, nominal Canadian retail, but pricing it at $250 doesn't make sense even in evil carrier logic. I seem to see early announcements on the Internet showing the prepaid price was going to be $200? Did it start at $200 and get bumped? And Virgin lists it at $150 prepaid. Am I missing something as to Koodo's $250 price?

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Userlevel 7
Badge +4
Nope, you got it exactly right, NorthernRaven... the prepaid pricing is madness and it's quite understandable that people take a plan and then immediately cancel it. I have even seen it recommended here in this community!
Userlevel 2
Were they ever selling it for $200 prepaid? Aside from the $150 price (which seems like a loss leader considering what Motorola charges direct in the US), I suppose people with US connections would be better served buying it unlocked from Motorola or Amazon down there. You can also bump up to the 16GB model for an extra $20. I'm still looking at updating my old 2007 KRZR/Fido prepaid. If I could find a reliable source for a used iPhone (perhaps a 5 or even a cheap 4S) I'd do that, but between the Kijiji swamps and wanting to wait until Apple's next release, a Moto G might be a decent stopgap. Shame moto seems to have let the carriers pre-empt a Canadian unlocked channel.
Userlevel 7
Badge +4
It is pretty sad when Wind sells the 16gb model for just $229, I agree something has to change with the pricing of the device.
Userlevel 6
Why would anything have to change guys? The beauty of capitalism that anyone can price anything at whatever they want. Then demand and supply bring the balance back. Clearly koodo isn't suffering otherwise they would make some changes. Dropping the prepaid price would be a crazy business decision. And virgin maybe paying the price. I know a few people who went bough the phone from virgin without any intention of using it with them. As a matter of fact there is quite a chatter on redflagdeals about these type of things. Guaranteed that virgin makes no money selling the G at $150 or it's minuscule. They make money on the monthly fees but if people simply use it with others than they get nothing.
Userlevel 2
Chris Petersens wrote:

Why would anything have to change guys? The beauty of capitalism that anyone can price anything a...

It isn't the $150 price, it is the $250 prepaid price that seems too high. At $180 (approx C$200) in the US from Motorola and Amazon, that would indicate that there is at least some (if small) profit margin at that retail price point. Are there other phones that Koodo sells at 20-25% above market retail? It is all very well to go on about capitalism and supply and demand, but for phones things are skewed (at least for consumers) by the "razor vs. blades" of phones and plans, and subsidies. Something is keeping Motorola from filling the Canadian retail channel with unlocked Moto Gs. It may just be they are unwilling to expand their shipping outside the US, and neither they or Amazon.ca see an opportunity in selling unlocked phones in Canada. I'd suspect, though, that Motorola found it either necessary or more profitable to negotiate exclusive carrier deals for now.
Userlevel 6
Chris Petersens wrote:

Why would anything have to change guys? The beauty of capitalism that anyone can price anything a...

It is about the $150 if koodo wants to avoid what virgin is likely going through. At$250 for prepaid even if you walk right after buying the phone at least they are not in the hole. And as far as $150 on monthly, well, we know based on the conversations here that 99% of people don't want to buy phones outright. They will rather use the tab and no money out of their own pocket.
Userlevel 2
Assuming they are sourcing the phones from Motorola at, say $180-$190 (or less), and would normally be happy to sell for $200 to Koodo prepaid users. So in your view they are charging their own loyal prepaid customers a punitive surcharge of $50, to prevent non-Koodo users from using them as a sell-through source of Moto Gs? I'd have a hard time thinking the numbers using this method to get a Moto G (which they'd then have to unlock) would be high enough to force them to hose their own customers like this. After all, selling at $200 would seem to be more like break-even than "in the hole".
Userlevel 6
NorthernRaven wrote:

Assuming they are sourcing the phones from Motorola at, say $180-$190 (or less), and would normal...

Yeap. Since nothing keeps a prepaid customer with them for more than a month if they want to leave. Making back the money therfore it's more difficult. I would do the exact same thing seeing how people were gaming the "system" before. You leave a loophole and people will take advantage of that. That's the nature of the business.
Userlevel 2
NorthernRaven wrote:

Assuming they are sourcing the phones from Motorola at, say $180-$190 (or less), and would normal...

I'd think if this was a real issue, they could do something similar to prepaid SIM cards - charge but give an activation bonus. So the phone could sell for $200 prepaid, and provide a $50 activation credit (or $250 with $50 bonus). That would seemingly be a way of dealing with leakage of phones outside their service, without hosing prepaid customers. If prepaid services have lower margins than postpaid, the activation bonus needn't be dollar for dollar. It looks like there are some other phones where the postpaid and prepaid prices differ substantially (Nexus 5, HTC Desire) where either postpaid buyers are being hosed, or other Koodo customers are in effect providing a subsidy on those phones.

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