New Tab System: It doesn't work & here's why, Suggestion: Phone price in bill over 2 years

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  • Updated 5 years ago
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I decided to do some math. Koodo seems to believe that the new system will allow for the tabs to be cleared by the 2 year mark. The assumption I'm going with is only the rate plan with no addons and no additional overages.

$500 tab
$95 plan: 14.25 + 10 = 24.25 x 24 = $582($500 tab cleared in under 2 years)

$75 plan: 11.25 + 10 = 21.25 x 24 = $510($500 tab cleared in under 2 years)

$65 plan: 9.75 + 10 = 19.75 x 24 = $474($500 tab NOT cleared by the 2 year mark)

-------------------

$300 tab
$75 plan: 11.25 + 5 = 16.25 x 24 = $390($300 tab cleared in under 2 years)

$60 plan: 9 + 5 = 14 x 24 = $336($300 tab cleared in under 2 years)

$50 plan: 7.5 + 5 = 12.50 x 24 = $300 ($300 tab cleared by 2 years)

$40 plan: 6 + 5 = 11 x 24 = $264($300 tab NOT cleared by the 2 year mark)

In my opinion, this new tab system does not work. It's caused a hike in prices for rate plans and a hike in prices for the devices. In the last 48 hours, we've seen the backlash from even hardcore Koodo supporters.

Sure, we can blame the Government, but the Government does not force a provider to change its pricing. The new tab system is to ensure that Koodo does not have to be forced to wipe the remainder of the tab, which for them would be a loss of money. That much is clear when you look at the numbers. The minimum plan for either of Tab L & M shows that the loss would be very minimal.

I saw an idea from Topper that I agree with. Why? Because it screams Koodo. "Simple, straight forward, ballsy, etc". Price of the phone, divided by 2 years.

We will call this "The Topper Effect"

IE: Nexus 4 = $300 / 24 = $12.50.

So $12.50 would be added to the bill on top of the rate plan. This does a few things:

1: Eliminates the need for a tab system.

2: If a customer wants to purchase a new phone during the 2 year period, the rest of what's remaining is billed out onto their next bill, or set it up for an additional Topper Effect.

3: No more confusing "tab contributions".

4: Keeps price plans low and value high.

5: Allows for fair phone pricing.

Chime in on your thoughts. If we want to make a change, we need to be proactive. Koodo wants us to be proactive with our bill? Let's be proactice with getting them to change their current system. It is broken and they need to see this.
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Marcus Fenix

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Posted 5 years ago

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Robert, Mobile Master

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What about customers who don't have any tab?
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Some random Mobile Master, Mobile Master

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There would be no more tab Robert. No need. Koodo would basically let you go with the phone on the promise that you pay it back in 24 equal installments added on top of your monthly plan. Koodo doesn't even have to give back 10% or 15%.

Our REAL reward would have to be awesome plans! The reason why? BYOD customers would get said awesome plans WITHOUT anything added on top of the monthly bill! That right there is real value! :)
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Some random Mobile Master, Mobile Master

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I, for one, just LOVE the Topper Effect, lol! :D

Seriously though, it would address a lot of things. The only extra thing needed is a cap, and I suggest $500. More than that and it's ridiculous. But of course, let the customer give a cash down on his phone. Using Marcus' example, if one would like to buy the Nexus4 ($300) but has $200 to shell out, then you simply add $100/24 to the monthly bill, adding very little cost.

The best part for Koodo in all of this? They don't have to subsidize anything anymore, the customer pays it all back within 24 months!
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Marcus Fenix

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You inspired it, I figured you would like the name though :D.
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Some random Mobile Master, Mobile Master

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lol, I did not inspire much, the inquiring minds at T-Mobile USA thought of this before I did :P I simply brought the idea over :D Seriously though, we need to admit, it wouldn't get any easier than this. Spread phone price over 24 months, done. Want a new phone before 24 months? Alright, as long as the total of all bought devices doesn't exceed $500 at any one time.
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mattjs

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This new system increases the average revenue per customer from those taking on the new tab/plans. You're getting a larger tab and in some circumstances a 'balance' may be absorbed by Koodo, but it's of little bother to them considering they just raised the prices of plans from $5-$20, and their is an associated monthly fee of $5-$10 as well. That $72 they wipe at the end of two years means nothing, by that time you've already paid them an additional $120 - $360 in service fees that weren't there before.

Koodo knows full well what they're doing. They're trying to increase profits and this comes at the expense of offering value to their customers. If you really want to show them that this system is 'broken', then you need to take your business to another provider, and hope others do as well. Telus only cares about their bottom line, if you impact that, then they'll listen.
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Marcus Fenix

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I can understand wanting to make a profit, but they won't very much by charging customers a lot more. A better profit will be generated by having cheap plans and many customers instead of expensive plans and few customers. Plus you also have to take into account retention. As of now, a lot of customers are already looking elsewhere for better rates. Something that Koodo "was" known for. I've been a staunch supporter of Koodo, but with this change, they have essentially become no better than any of the other discount brands. This is now "more of the same". Oh how I wish we could adopt the european style of cellular service.
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mattjs

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With this change I think the other discount brands offering MUCH more value, at this point at least. Koodo is essentially pricing themselves into Rogers territory at this moment, which is pretty dangerous considering the amount of subsidies and services Rogers offers.
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Some random Mobile Master, Mobile Master

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With the current model, I do not think Koodo can even be classified a budget brand anymore.
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Some random Mobile Master, Mobile Master

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"which is pretty dangerous considering Rogers' reputation"

Let's not forget that too... Koodo really doesn't want that tag!
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Sophia, Mobile Master

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I love the idea, Marcus! Let me grab it for a moment and do some tricks with it :)

This works well for a Nexus device, but let's calculate this for the iPhone 5 and probably people will once again start complaining...

Let's also assume (for argument's sake) that there has to be something "in it" for Koodo, so let's add 15% to the price just like the "real" mortgage providers do.

Nexus 4, outright: $300
Nexus 4, on the "Tab": $15 each month + regular bill

iPhone 5, outright: $625 (old price)
iPhone 5, on the "Tab": $30 extra each month

Ouch!

Mind you, this WOULD again work if you had to pay $200 up front...

iPhone 5, outright: $625
iPhone 5, on the "Tab": $200 up front + $20 extra each month on top of the regular bill.

Sightly less ouch :)

So yes, I love your idea... And although none of this effects me on prepaid, I just can't see how especially the HUGE data increase and minimum plan from $20 (a few months ago) to $30 now is going to bring Koodo many new customers.
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Some random Mobile Master, Mobile Master

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Sophia, Koodo has devalued the current batch of plans so much that we now have to pay $30/month for something that used to cost about $20. So, with a system similar to T-Mo's, someone who'd like a $300 Nexus4 could afford a valuable $30 plan, bringing his monthly total to $45 ($30 for the plan and $15 for the device). Someone who'd like an iPhone currently has no choice but to pay $200 upfront anyway, so let's go with your 2nd example. This same person could keep the bill at the $45 mark by simply going with a lower plan at $25 (+$20 for the phone). It's always a question of balance. You set your budget, and choose your plan/device accordingly :) iPhones are expensive, there is no other way around it. Of course, someone who wants an iPhone with an awesome plan will have to shell out more, and it's only fair to the crowd who goes for the N4 :)
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Sophia, Mobile Master

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Oh yes, I fully agree! Just wanted to let people see what they are voting for :D

ANYTHING is better than the 200% increase of last Sunday - I'm' still reeling over that one!
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Some random Mobile Master, Mobile Master

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I see we sit on VERY similar thoughts then :P hehe
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Marcus Fenix

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As do we :D.
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Curtules

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I like this idea because people aren't getting "free" phones, they're still paying for it themselves, just over time. The only problem is that most customers would like this even less than the new Tab.

I'm a firm believer in "if you want something, you buy it" but I realize that I'm in the minority when it comes to cellphones.
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Some random Mobile Master, Mobile Master

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Well, there's no kidding anyone. People who believe they are getting a free device are sorely mistaken. Have you seen the complete lack of value in the new plans? They're expensive and have so little to offer that there is no other way to explain this than to blame embedded subsidies. Take the subsidy out of the equation, and suddenly, value-packed plans become possible again, and even more so for BYOD customers.

For once, by having separate plans and subsidies, people could finally realize phones DO cost lots of money and need to be taken care of, instead of dropping them everywhere, including the toilet, and then complaining to the carrier for their own careless handling.

Something needs to be done, or BYOD customers will be getting VERY irate... They are completely screwed right now with the plans offered.
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Curtules

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EXACTLY, hence the quotation marks around "free".
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Some random Mobile Master, Mobile Master

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I wasn't disagreeing with you Curtules, quite the contrary :)
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Curtules

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I know, I'm just glad to see that there are like minded people. This new Tab seems to be bringing them out of the woodworks.

Silver lining I suppose.
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Dennis, Mobile Master

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^^Virtual Star re: dropping phones in the toilet
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Moonmack

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I still like this idea. Any chance it will happen? Maybe a parallel track - fair plans for BYOD customers and terrible plans for people who want financing.

Right now the best value, if you can call it that, is for the two years when the tab is being repaid since it is 15% (Haven't checked that carefully). I try to keep my device for longer than that or upgrade to a used device. My wife seems to keep her phone for six years. It would be nice to have competition on plans where hardware is removed from that part of the decision. I like a fancy new phone it's just I have other things to spend my money on.

So ... Right now it seems I'll keep my old plan and then try to switch to the 10% discount when the tab reaches zero. Hopefully that's still allowed by then.
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EDITthis

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Calculations are all done with the current plans prices and phone prices am I right?

If so by doing your calculations with their new price points we are accepting them. I want to see lower $25-$30 starting range!

I could be wrong and I know I said this before. Koodo listened to what people asked for which was higher end phones cheap as possible! I believe because of the people that requested this we are in this outages prices on plans and phones too!

I would like to hear feedback from the people that asked for that. I want to know if they enjoy the new changes. Do you like to pay HIGHER MONTHLY fees? Do you like the new plans? ARE you even a customer anymore or in 6 months etc.
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Marcus Fenix

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The cynic in me is somewhat laughing at those that wanted a bigger tab /evil grin\
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Some random Mobile Master, Mobile Master

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When I switched from postpaid to prepaid, the fact that I didn't carry a high remaining Tab allowed me to make the switch without even thinking twice about it. It was -$118 and I paid it along with my last monthly invoice. There, done. With a $470 remaining Tab? Not so tempting... The fact of the matter is, carrying high Tab amounts is more likely to make you accept being gouged with crazy monthly plans.
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Marcus Fenix

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Yup, definitely true.
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Dennis, Mobile Master

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I dont know why it took me this long to see this idea. I am all for it. In addition if they could bring back the old phone pricing I would be very happy with this change.
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Ahmad

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Pretty sure that they mean once you hit the two year mark, anything remaining from the original tab will be cleared. The extra "tab charge" isn't a charge set to specifically make your tab $0, its just to basically recoup money.
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Ria S

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AGREED!
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Ria S

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Honestly, there is no need to worry. Koodo will still be better than the rest, they just changed a few things and are trying out the changes. They already know they aren't that competitive right now but they're gonna be coming with new promos very soon. Educate yourselves people, relax and just watch
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mattjs

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You're pretty optimistic. I wouldn't be surprised if Koodo brings out some promotional plans around back to school, but will they be better value then the plans that were previously available? If koodo raised the prices of their plans by $20, and then brings out a promo plan that halves it, consumers are still worse off then they were before the changes.
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Ria S

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LOL just wait and you'll see....I've been working in the mobile phone business for MANYY years and trust me Koodo and Telus are one of the best phone companies to go with if you want good phones, deals, customer service, etc. Sure Telus was going downhill a few years back but they have COMPLETELY turned it around....sea to sky difference!
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Ria S

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I've been with every phone company out there and I couldn't be more happier with anyone else (so far in Canada that is)
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Kim

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Just a heads up for those looking at other providers, my boyfriend bought a new phone and changed his plan with virgin last weekend, He tried to switch back to his old plan today at future shop and was told ALL carriers have changed their plans and pricing in the last 48 hours.....
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Jonathan I, Mobile Master

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To the above poster (and everyone else, I guess)... here's the inside scoop on some plan changes by the carriers:

Rogers: announcing changes soon, nothing has happened yet.
Fido: has had Tab24/2 year agreements for a while now, probably not changing that much.

Telus: base plans are all going up to Unlimited Nationwide Talk + Text; the price of this base plan is based on which phone you take. It's cheaper if you BYOD (which makes sense, this is what Koodo should do). Then you add data bucket of your choosing.

This is simple to understand and market, but the prices are pretty expensive, and not everyone is going to want or NEED Unlimited nationwide calling, so I hope they bring in a lower price tier for base voice plan with a minute cap. All terms going to 2 year. Effective August 1st.

Koodo: we already know

Bell: 36 month terms are gone as of July 29th, replaced with MTM or 2 year terms. New tiers for plans: Voice, Voice & Data lite, Voice and Data plus. V&D plans increased by about 5 bucks to recoup some money - but if you want, you can still take a 3 year and get $5 off + extra 1GB of data on their 75, 85, and 100 plans.

Virgin: SuperTab and Platinum 3 years are eliminated as of July 30th. 2 year agreements taking place. Plans increased slightly already (as you discovered).
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Marcus Fenix

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I wish we could use the European way of cell phone service. Theirs is much better.

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