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Separate device subsidy from plan price


Userlevel 7
Badge +4
The new Wireless Code of Conduct, once it comes into effect will force some major changes. I think Koodo should be proactive here and earn some good will. The current tab system will have to change anyway due to the new rules. For far too long, Canadians have been conditioned to expect a free (or near free) phone. So few of us purchase phones outright, because there isn't much incetive to do so. Koodo offers us a 10% discount on our bill, which is fair under the current tab structure, as it's the exact amount of the subsidy. But, more and more customers are asking for a tab increase. Under the new regulations, Koodo will not be allowed to collect on the tab past 2 years so in order for Koodo to increase the tab, Koodo will have to restructure how the tab is paid off. This is what I propose: 1. Increase monthly plan discount to 25% for those with zero tab balance. You already offer this discount to National Grocers employees. 2. Advertise separate pricing on each plan based on tab amount (or 1 year/2 year commitment). Major European carriers have switched to this model after their governments barred contracts over 2 years. Most customers will still opt for the more expensive plans as the outright price of most smartphones is fairly high. I feel that a solution like this would be fair to both Koodo and its customers.

70 replies

Please read last line carefully: This new policy applies to customers who have entered into terms of any length, including those longer than the aforementioned two-year period. While it’s not certain yet how carriers will deal with the disparity of allowing contract holders to leave without penalty before their terms have expired, the CRTC has set about enforcing a maximum early cancellation fee that cannot exceed the amount of the phone subsidy itself, and must be payable over a two-year period. That means that after two years, if the phone balance hasn’t been paid off, customers will need to merely pay off the remaining amount of the device and be able to leave the provider without penalty.
Userlevel 6
smurfette wrote:

Please read last line carefully: This new policy applies to customers who have entered into...

I'm pretty sure you are incorrect. What the crtc is saying is that after 2 years, no matter what amount left on the subsidy, customers can walk scott free and pay nothing.
Userlevel 7
Badge +4
smurfette wrote:

Please read last line carefully: This new policy applies to customers who have entered into...

I think smurfette is right on this one
Userlevel 6
smurfette wrote:

Please read last line carefully: This new policy applies to customers who have entered into...

Then you guys have to read again: http://www.huffingtonpost.ca/2013/06/06/wireless-code-of-conduct-_n_3392530.html?just_reloaded=1
Userlevel 1
smurfette wrote:

Please read last line carefully: This new policy applies to customers who have entered into...

The answer from the CRTC is confusing indeed : Answer from the CRTC: If you currently have a contract and you want to exit, you will likely be charged a cancellation fee, which is determined by your service provider. Some provinces have rules setting out how these fees must be calculated. Once the code is in force, you will be able to exit after two years without any penalty or fee.
Userlevel 6
smurfette wrote:

Please read last line carefully: This new policy applies to customers who have entered into...

Not confusing at all. Status quo for today, as Dec 2nd if you buy a phone new rules will apply.
Userlevel 7
Badge +4
smurfette wrote:

Please read last line carefully: This new policy applies to customers who have entered into...

Thanks RudyW I have read it, watched the video and went throught 31 page slide show. Smurfette is still right lol. There will be no cancellation fee, you only have to pay off the remaining phone subsidy if one still exists at the end of 2 years.
smurfette wrote:

Please read last line carefully: This new policy applies to customers who have entered into...

I agree with rudyW, heck I'm confusing myself now, but somebody source your info here please. "b.for indeterminate contracts: The early cancellation fee must not exceed the value of the device subsidy. The early cancellation fee must be reduced by an equal amount each month, over a maximum of 24 months, such that the early cancellation fee is reduced to $0 by the end of the period." From the CRTC -- http://www.crtc.gc.ca/eng/info_sht/t14.htm
Userlevel 7
Badge +4
smurfette wrote:

Please read last line carefully: This new policy applies to customers who have entered into...

So would current Koodo plans be an indeterminate contract or just no contract? Technically Koodo doent have cancellation fees. Just pay back the free loan they gave for your phone. I'm confused. Like when the govt eliminated expiry dates on.gift cards, then stores started offering Cash Card promotions (old Navy, Warehouse One, etc) that had expiry dates. Some definitions by the CRTC would be nice
Userlevel 7
Badge +4
smurfette wrote:

Please read last line carefully: This new policy applies to customers who have entered into...

"b.for indeterminate contracts: The early cancellation fee must not exceed the value of the device subsidy. The early cancellation fee must be reduced by an equal amount each month, over a maximum of 24 months, such that the early cancellation fee is reduced to $0 by the end of the period." So, as I understand this, Koodo will have to split the tab over 24 months. It has to be paid off by the customer by then.
smurfette wrote:

Please read last line carefully: This new policy applies to customers who have entered into...

The service agreement you sign with Koodo is still a leagally binding contract, without a fixed term. And yes I am making an assumption here calling it CRTC's indeterminate contract, Im sure more clarifacation will come out prior to December 2nd.
Userlevel 6
smurfette wrote:

Please read last line carefully: This new policy applies to customers who have entered into...

The way I read this is everyone would have to receive $6.25/month towards their tabs in order to pay off $150 over 24 months. Since Koodo is a for-profit company, my guess is each phone will have a different price tag which will become a mix of tab+monthly plan. Koodo will still only give us 10% of our monthly plan, so they'll adjust our tabs accordingly. Which also leads me to believe that if you are to change to a cheaper plan, they will also have to charge you the difference it makes on your tab in order for it to be cleared at the end of 24 months, as expected. Example: Quebec customer comes in and gets a Lumia 520 @ $150 and wishes to use the tab. The plan he wants costs $39. Monthly amount that goes towards the tab is $3.94 (10% of $39 plan + $0.40 911 tax). $3.94 times 24 equals $94.56. Customer would then have to shell out $55.44 +tx upfront to get his phone since his tab wouldn't be able to be cleared out in 24 months otherwise. Prorated adjustments would be made throughout those 24 months in case customer changes plan and/or phone. Well, that's how I see it anyway. Don't count on having more than 10% of your plan going towards your tab, it's not gonna happen.
Userlevel 7
Badge +4
smurfette wrote:

Please read last line carefully: This new policy applies to customers who have entered into...

I ❤ the math. I think TopperCNC is prolly right about Koodo doing something like in his example.
Userlevel 3
smurfette wrote:

Please read last line carefully: This new policy applies to customers who have entered into...

Maybe rather than paying the extra $55.44 from your example up front it would be split over 24 months?
Userlevel 6
Totally agree on that, its time for Koodo to make some bold changes that will rock the mobile industry. We started with the revolutionary Tab system, now its time for Koodo to make another mark. Maybe something that other wireless providers won't be able to offer. Like you said maybe 25% each month towards the tab or tab automatically clears after 2 years no matter which plan the customer chooses.
Userlevel 6
Erwin wrote:

Totally agree on that, its time for Koodo to make some bold changes that will rock the mobile ind...

Why do you think 25% towards the tab is something the others can't do? I'm thinking they would, the day after koodo does, in which case they all just reduced their bottom line for nothing to show.
Userlevel 7
Badge +4
Erwin wrote:

Totally agree on that, its time for Koodo to make some bold changes that will rock the mobile ind...

So what if the others do it?
Userlevel 6
Erwin wrote:

Totally agree on that, its time for Koodo to make some bold changes that will rock the mobile ind...

Race to zero is not in for profit companies best interest. Why would decimate the market unless they themselves gain market share through whatever they do. Doing things that are easily matched by others is not going to achieve that. I'd love if companies were that stupid because we on the other would benefit from lower prices.
Userlevel 3
I don't really see how the CRTC ruling is going to change anything especially anything that would need to make Koodo redo the current setup. Koodo is already setup who the rule is laid out, but better. Cause we don't need to wait 2 year to cancel without a fee and then pay off the rest of the phone. We cancel and time as long as we pay off the rest of the phone (tab)
Boolanger wrote:

I don't really see how the CRTC ruling is going to change anything especially anything that woul...

what i was trying to point out above. thank you. I am not good with words.
Userlevel 6
Boolanger wrote:

I don't really see how the CRTC ruling is going to change anything especially anything that woul...

The tab, under the new rules would be screwed. Koodo couldn't collect outstanding tab on a customers who walk after 2 years.
Userlevel 7
Badge +4
Boolanger wrote:

I don't really see how the CRTC ruling is going to change anything especially anything that woul...

Watch the video in you huffingtonpost link you posted. You have to pay the remaining subsidy still
Userlevel 6
Boolanger wrote:

I don't really see how the CRTC ruling is going to change anything especially anything that woul...

That what I said all along.:-)
Userlevel 1
Phone Manufacturers should also do their part by making it easy on Canadian consumers to get affodable phones (not phones for 500$/600$).
Userlevel 7
Badge +4
MatB wrote:

Phone Manufacturers should also do their part by making it easy on Canadian consumers to get affo...

Or they should sell their phones in retail outlets or on their site like Apple and the Google Nexus. And the wireless service providers can stop selling phones and just concentrate on improving their service

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