Subsidized BYOP

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  • Idea
  • Updated 4 years ago
  • Not Planned
  • (Edited)
Bring your own phone... Subsidized!
With more and more phones able to be bought outright elsewhere (nexus line, iPhones, oneplus one). Koodo should allow customers to bring their own phone, show them a receipt of the phone, register the phone's imei onto the koodo system and then use one of the Tab plans to reimburse the customers for the purchase price of the phones. This way, koodo cuts the amount of work they need to do to source the phones and customers have unlimited choices.
Customers can get whatever phone they want, and koodo makes money on the 2 year Tab plans/contract.
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Philan Policar

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Posted 4 years ago

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Ahmad

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The only phone that's actually beind sold 'elsewhere' is the OnePlusOne and the fact is not other carrier sells it. This is just a bad business idea IMO. This would put the company in debt. Where and how did you asses how Koodo would make profit in this?
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Philan Policar

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Sorry, my reply below was done incorrectly:

"when koodo sells you any other phone, and puts you on a tab, they do the exact same thing. They front load a portion of the cost and amortise the rest by way of a portion of your plan payments. Why do you think bring your own phone gets you 10% less? Or why does tab large have a higher monthly payment than tab small? "
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Philan Policar

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@ahmad when koodo sells you any other phone, and puts you on a tab, they do the exact same thing. They front load a portion of the cost and amortise the rest by way of a portion of your plan payments. Why do you think bring your own phone gets you 10% less? Or why does tab large have a higher monthly payment than tab small?
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Ivan, Mobile Master

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Subsidies are something we want to get away from. It's mainly the subsidies that are keeping plan prices high.
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Philan Policar

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you pay what you pay.
for example... a phone costs $1000. you get koodo to pay 50% upfront, in turn puts you on a $80 tab large plan.
That plan normally would have costed $60, on a month to month.
but because of the 50% subsidy ($500 / 24 months = $21)... you pay $20 extra.

$60 + $20 = $80.

The benefit for you, is you get to enjoy a $1000 phone upfront, whilst only paying $500 upfront.

The benefit for koodo is that they get to guarantee 2 years of income (and profit) from you, for the price of financing you with $500 on a relatively risk-free loan..

in reality, most people keep their phones for 2 years anyway, the subsidy model is not a bad model if all the sugarcoat is taken off.

now, with my suggestion, i'm simply saying why not take it one further and let the customers deal with bringing their own phone. They already do it anyway, with the month to month deal, why not offer a subsidy and guarantee 2 years of income on those customers?

I'm not saying take the month to month option away...

there will be minimal savings (purchasing and shipping and negotiation costs) but yes there will be minimal losses (lost profit on the phone sales) on Koodo's end. But at the end of the day, you get to keep a customer for 2 years guaranteed (you're attracting the BYOP guys here) and chances are, that customer will stay after that 2 year period.

Win-win from my end.
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Ivan, Mobile Master

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It is a bad model for one major reason: the subsidy is built into the price of every plan, whether you get a subsidy or not. Koodo, like all other carriers, is not willing to take a loss on the phone. The costs of subsidizing are passed onto all of us.
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Philan Policar

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I realise that, but that isn't really relevant to what I'm saying above
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Some random Mobile Master, Mobile Master

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A $1000 phone should be sold for $1000, not $500 with a Tab.

You're basically asking your carrier to lend you $500 over 2 years, in exchange for a higher monthly bill.

This is called: going into debt. Make no mistake, you're not "saving" $500, you now OWE someone (your carrier) $500....

The benefits to real BYOD don't seem apparent now because only a small percentage of customers do the right thing. If, tomorrow, every customer on every carrier stopped selling their souls (contracts, tabs), this would only leave the plans for the carriers to compete on. That's a much smaller weapon than plan+device.

And I don't believe anyone needs (not wants, needs) a $1K device. Wrap your mind around this: $1000.

And no, a $500 Tab doesn't magically make it half price. Lose your job and cancel your plan, just for fun......... tears will be comin'.
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Philan Policar

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I don't know where you got the idea that I believe a tab will make a phone become magically half price haha. I'm well aware of how a subsidy works.......

the simple idea is this: if you can pay for something in installments, assuming minimal or no cost, why wouldn't you? That's what a tab is....so yes a $1000 phone should be sold for a $1000. Full stop. But for other people it's preferable to be sold for $1000, with a tab..

Keep in mind I'm not saying don't buy something you can't afford. Very different things. At the end of the day you're spending $1000.

Anyway, I thought my idea is a good idea. it's not changing the world, it's just a combination of the BYOP and the subsidy model.
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Philan Policar

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I'm not saying buy** something you can't afford

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