Topper Effect = price of phone on bill over 24 months

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  • Updated 5 years ago
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I want to get this idea rolling again as the last time I did this, it kind of just went away.

The idea is simple. Remove the tab completely. Now, you want that $700 phone?

$700 / 24 = $29.17 on bill(on top of your rate plan/addons).

What does this do?

People are no longer worried about having to put money up front. It also guarantees that it falls under the CRTC new regulations.

What if you cancel? Then whatever amount is remaining is what you pay on the final bill.

Simple, transparent, easy to understand.

To quote Peter Griffin: "Why are we not funding this?".
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Marcus Fenix

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Posted 5 years ago

  • 11
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Marcus Fenix

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This can even be expanded upon. Let the customer decide how many months they want to pay the phone over. 1 year? Not a problem. 1.5? Sure. 6 months? That works too.
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LairdC

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I'm not a huge fan of this simply because my $40 bill for my cellphone would go to $70 based on your example.
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Some random Mobile Master, Mobile Master

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If this idea gets implemented, then the gates open to awesome plans, which is the idea behind all of this. Too expensive plans would become irrelevant, and carriers would be forced to compete on plans only since the subsidy is taken completely out of the picture.
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Humberto Giambrone

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It wouldn't matter, it would just rearrange things.

Taking the $40 talk/text/data plan:

As it stands now, Koodo stands to benefit from either a medium tab of $400 up front + $45/month for 24 months (or $1480) or small tab of $550 + $40/month for 24 months (or $1510).

If they went with this straight up plan plus phone divided into 24 installments, they would just rearrange the plan and phone pricing.

Probably deflate the $40 to $35 and the $700 back to $650 and end up with $35*24+$650 = $1490. This analysis ignores time value of money and inflation, but those would be marginal impacts on the overall math, the bottom line is that it would change nothing, just window dressing. I guess it would be simpler to understand.
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Some random Mobile Master, Mobile Master

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It would have a major impact on BYOD customers Humberto. Some people like to use phones that they get used, hand me downs, phones not available at Koodo, etc... 10% off an overpriced plan is NOT very attractive. By using this new method, BYOD people would benefit from awesome plans, and those who require a phone would still get it, at about the same rate they do today.

It would be a bit like having a SIM-only carrier. Such a carrier would have to offer something different to attract people to its services. And that would be.... (drum roll).... way better plans than everyone else.
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Humberto Giambrone

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I agree that the new plans hurt BYOD, to be fair they should really be offering 20% off their plans for BYOD to make it equivalent to what non-subsidized plans would probably be priced at (for instance 20% off current $40/month plan is $32 compared to 10% off an assumed non-subsidized $35/month plan which is $31.5).

That's probably a reason they wouldn't want to do this. They'd rather keep the 10% BYOD off more expensive plans. In the end, the carrier never loses with any changes, they always end up better off, that's what people have to remember.
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Some random Mobile Master, Mobile Master

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Of course, we know that... We're still wishful thinking though :P
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Dennis, Mobile Master

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Due to the lack of "subsidy" and tabs as loans and the 15% loyalty toward paying off the tab, Koodo should be lower their plan prices accordingly to compensate for a transparent phone purchase plan.
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Some random Mobile Master, Mobile Master

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That is the whole idea my friend :) To be back to value-filled plans! Carriers say all the time they don't make money on phone sales anyway, so why keep selling them? We'll get our devices ourselves and reap the savings on the plans!
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Marcus Fenix

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Yup yup.
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Moonmack

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Another nice feature with BYOD is you could buy the phone unlocked. If you upgrade later it is easier to pass along the phone than to pay a $50 unlocking fee or find a third party. Right now you have to buy a Nexus if you buy your phone from Koodo and you want it unlocked.
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Dennis, Mobile Master

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Amen to that Moonmack. The one thing I wish the Wireless Code of Conduct would have done away with was locked devices
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Some random Mobile Master, Mobile Master

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Agreed. Buying the phone ourselves, without the carrier as the middle man, would basically mean all phones would be unlocked, and that is a good thing (international vacation with local SIM anyone?).
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Paul Deschamps, Mobile Master

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It's cheaper right now the way Koodo has it. It cost me nothing up front for the $300 phone (Nexus 4) and Koodo contributes the 15 % each month and it costs me $5 a month for 2 years then Koodo pays off the remaining amount at the 2 year mark. So the phone costs me a total of $120.
The way you want it would cost me $12.50 each month and Koodo wouldn't pay anything, How exactly is your way better?
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Some random Mobile Master, Mobile Master

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"[...] would cost me $12.50 each month and Koodo wouldn't pay anything [...]"

That's exactly where we win Paul. Koodo could NOT keep their plans priced like they are, thus benefiting the BYOD crowd immensely! Let's take a plan, any plan, and reduce its price by $10-$15.... now we're talking!

For someone who uses hand me downs, used devices or phones not sold by Koodo, this would be AWESOME, because finally, managing the device part yourself would be worthwhile. HTC One anyone? Note 2/3? No problem, buy it however you see fit, bring it over to Koodo and we'll REALLY discount your plan (since Koodo doesn't take a financial risk on the customer)! That's the whole idea :)

It would also make carriers finally compete on PLAN price alone! And THAT would be really good!
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Dennis, Mobile Master

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Imagine getting a Moto X and using it on Koodo whose plans are $15 cheaper per month ;)
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Some random Mobile Master, Mobile Master

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^^ THIS!! ^^ This is the reason! MotoX or any device you want, but the concept is exactly this! :)
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Humberto Giambrone

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I think it's incredibly wishful thinking to assume that plan prices would fall that much. In fact, I would bet my life that they wouldn't.

Not to beat a horse that has already been mangled, had the meat picked off the bones and has turned to dust, but this is an oligopoly environment. The oligopoly is reflected through the high end brands (Robelus) and their discount brands. In fact, there wouldn't be as much of a need for the discount brands anymore since one of the main distinguishing features that separate the high end from the discount companies is the selection and ability to get premium phones for little up-front. There is no point in having Koodo compete with TELUS for instance, when phones have been taken out of the equation.

Once certain price points have been established, for minutes, text, and primarily now, data, there is no reason for them to go backwards. Maybe slightly, but not the utopia people are hoping for. There is very, very limited actual competition happening here, and we all know that.The only thing that might separate Koodo and TELUS under the no-phone-subsidy environment would be amount of data, not price of data. Minutes and texting has been rendered almost irrelevant now.

You'll end up paying almost exactly what you are paying now, plus the full price of a phone. Count me out.
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Some random Mobile Master, Mobile Master

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It's pretty obvious that carriers use the subsidy AND weak BYOD incentive to basically make people say "Well there's no point buying my device outright, it will cost me more." So people get tabs/contracts and are indebted toward their carrier, as a lock-in. Then, you pay higher monthly plan prices to repay your device. That's basically the carrier being your bank, and this is where change is needed.

We're seeing this trend elsewhere too, and it needs to change. Many car manufacturers bundle your car purchase with gas cards and freebies instead of lowering the actual price of the car. That's called "keeping the purchase price artificially high". It makes people believe that what they're buying is actually worth the amount on the price tag (we all know it's a lie). But they're getting freebies to make them feel good, and hopefully avoid them going into buyer's remorse.

Analogy applies to your cellphone plan. You get your freebie (or cheapie) in the form of your device while you pay a high price for service that is likely much cheaper to provide. Of course, part of what you pay is actually the price of the device. Take that device out of the equation though and the opportunity is there to lower pricing on the service itself. But we know the carriers like people to believe that what they're paying $60 for is actually worth $60. Telus actually gives a $20 rebate to BYOD customers on their new share plans, but people still don't make the connection that this $20 rebate doesn't come out of goodwill, but from the fact that Telus doesn't take a financial hit on them. However, even $20 cheaper, these plans are horrible for the most part. So...

Anyway, we all know the current model is here to stay. Have to live with it I guess. The only way to have an alternative would be Telus coming out with another flanker that is SIM-only, but that's never going to happen.
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Moonmack

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Does anyone know if the carriers pay the same price as a BYOD customer for the phone. If not then Koodo may want to keep selling phones because of the mark-up. So if Koodo can get 1000 $500 phones for $450 each then they are ahead $50 for each phone. On the other hand they may lose money on each phone just to attract new customers. I just don't know.

I know Telus gave me a free XBox when I signed an agreement. If I left early I had to pay the difference. However, IMHO the XBox was values much higher than I could buy it at the store.
P.S. an agreement is like a contract where the provider can change the price and use the device difference to try to keep you.
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Moonmack

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So if they lose money on the device I should be able to get a better plan than if they finance one for me. This is backwards to a 10% discount but a 15% tab. Unless they have a better retention with a financed phone. I would think a better BYOD would be a good retention incentive. (and I know even if they improved the BYOD to 20% or something someone would still ask for more)
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Humberto Giambrone

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Precisely. If they lost money, or didn't make money on the device, they would encourage BYOD, but they don't.
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Ivan, Mobile Master

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There's a reason why we're not told what the carriers pay for the device ;)
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Some random Mobile Master, Mobile Master

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Buying them by the truckload surely helps with that too... hehe
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Humberto Giambrone

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Phones and plans should have been separated right from the beginning, but now that the market has been made with them tied together, it's better for consumers that it doesn't change. Because any changes would only cost us more, just like the 2 year contracts have. To reiterate a point I made earlier, carriers never lose when major changes are made (or enforced), only consumers do.

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