Koodo Community

Is it ethical to sell 5g tech without 5g capabilities?

  • 2 February 2021
  • 12 replies
  • 528 views

I would like to bring into question the ethics of koodo selling 5g tech when they don't have the supporting infrastructure. Especially these +5g and ultra 5g phones which come at a substantially higher price tag then the 4g tech that they have the infrastructure for. I feel like this is wrong. The new generation of phone are a lot more expensive because of the 5g tech that their customers can't even use on their networks. It feels like theft to me. 

 

The options as I see it are to A. Not sell 5g capable phones which would mean losing customers, B. Selling those phones at a lower price because they cannot offer the capability.

I think that would actually bring more customers in. And one might think that this would cause a large loss to the company, but phones are marked up so insanely high that I really don't think it would hurt them. As an example the last time I bothered looking into it was with the Samsung s7 which had a manufacturing cost of $450 but being retailed at over $1000 when it was new. Now these new phones are retailing at over 2k and I sincerely doubt that manufacturing costs have increased much at all. I think the company could bare the impact of selling these phones closer to the at cost value and make up for that loss with the increased number of customers they would get from selling these new gen phones cheaper then the competition. This would also have the added benefit of driving the retail prices down in general as other companies would have to compete with a lower price point.

Option C is to get more money out of telus and build the infrastructure.

Now I doubt they would do anything like this because they are a large greedy company that is a subsidiary of an even larger more greedy company that practically has a strangle hold monopoly on the telecommunications industry in Canada, but I think they should consider something like this.

Allan M 9 months ago

I'd like to disagree. The pricing has been pretty steady over the past couple years and the 5G enabled phones aren't any more expensive than to deal with the fact that it's a new phone with new features (besides 5G). So I'm not seeing these phones coming at a "substantially higher price tag then the 4g tech". Unless I'm missing something?

Samsung:

S10 launch was $1260

S20 5G was $1320

S21 5G was $1130

 

IPhone:

11 launch was $979

12 5G was $979

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12 replies

Userlevel 7
Badge +4

Apple sold me many iphones (at high prices) with many sensors and features that I never used. Should I ask them to refund money to me?

Userlevel 7
Badge +4

Everyone wants to sit on the front row for a dime. You won't get a McLaren 720s Spider for $20k just because you'll never be able to drive it at 300 MPH, and you won't get a discount on a 5g phone simply because you can't use 5g while on Koodo's network.

Userlevel 7
Badge +4

Investigate carefully. How many people buy 4K TV’s when signal sources are limited? 5G? It’s just around the corner, being delivered in that a self-driving truck.

If you want to be ready for the next round of services when they are available, buy the features that will be of real use to you. And don’t complain that they sold you this lousy non-5G phone when they knew it was coming soooon...

Userlevel 7
Badge +4

I would like to bring into question the ethics of koodo selling 5g tech when they don't have the supporting infrastructure. Especially these +5g and ultra 5g phones which come at a substantially higher price tag then the 4g tech that they have the infrastructure for. I feel like this is wrong. The new generation of phone are a lot more expensive because of the 5g tech that their customers can't even use on their networks. It feels like theft to me. 

 

The options as I see it are to A. Not sell 5g capable phones which would mean losing customers, B. Selling those phones at a lower price because they cannot offer the capability.

I think that would actually bring more customers in. And one might think that this would cause a large loss to the company, but phones are marked up so insanely high that I really don't think it would hurt them. As an example the last time I bothered looking into it was with the Samsung s7 which had a manufacturing cost of $450 but being retailed at over $1000 when it was new. Now these new phones are retailing at over 2k and I sincerely doubt that manufacturing costs have increased much at all. I think the company could bare the impact of selling these phones closer to the at cost value and make up for that loss with the increased number of customers they would get from selling these new gen phones cheaper then the competition. This would also have the added benefit of driving the retail prices down in general as other companies would have to compete with a lower price point.

Option C is to get more money out of telus and build the infrastructure.

Now I doubt they would do anything like this because they are a large greedy company that is a subsidiary of an even larger more greedy company that practically has a strangle hold monopoly on the telecommunications industry in Canada, but I think they should consider something like this.

I don’t see why it’s not ethical to sell these devices with new capabilities. Just because Koodo doesn’t offer 5G services doesn’t mean they are obligated to stop selling them or lower the cost of the device. The manufacturers will continue to update new devices with better functions and technological features. 

You have to remember the manufacturers are the ones that determine what the cost of the device would be. They are the ones marking up the price, not Koodo. Koodo only purchases them from the manufacturer at a certain cost. Through the Tab Bonus, they are subsidizing a portion of the cost to the customer. That is the trade-off for upgrading your phone with Koodo as opposed to purchasing it upright at the retail price.

You can argue that the subsidies have significantly decreased compared to a few years ago, but this has been the trend for all Canadian carriers as the landscape of the mobile industry continues to change.

At the end of the day, Koodo is operating a business. They are only a cell service provider and not the makers of the devices. As you already know, Telus is creating a 5G network infrastructure. It’s possible they may eventually allow Koodo to access this network. Usually it takes longer for them to implement this on the Koodo network, as they have with VoLTE and wifi calling.

If you really want to lower the costs, you can easily buy used phones or mid-range devices upright on Amazon, eBay, Facebook Marketplace, Kijiji, and other big-box retailers.

Everyone wants to sit on the front row for a dime. You won't get a McLaren 720s Spider for $20k just because you'll never be able to drive it at 300 MPH, and you won't get a discount on a 5g phone simply because you can't use 5g while on Koodo's network.

Just like the first person you seem to have missed the point. Whether or not I can ever drive that McLaren 300mph or not, it can still go that fast and its still going to be fun to drive on the highway because of the power it has. If you buy a phone from koodo, you will be using their network which doesn't have 5g infrastructure. So its like buying a McLaren at full price that someone swapped the engine out with an engine that only gives you half the output that the stock engine would have.

Userlevel 7
Badge +4

Also the latest round of snap dragons have the radio chip built into the platform now so it'll be by default and Koodo will have to sell those phones if they want to keep selling new devices.

Investigate carefully. How many people buy 4K TV’s when signal sources are limited? 5G? It’s just around the corner, being delivered in that a self-driving truck.

If you want to be ready for the next round of services when they are available, buy the features that will be of real use to you. And don’t complain that they sold you this lousy non-5G phone when they knew it was coming soooon...

Your the first person so far that didn't miss the point, and you have a valid point. But koodo uses telus's towers. Telus offers 5g but koodo doesn't, and doesn't really have an excuse not to.

Userlevel 7
Badge +4

Investigate carefully. How many people buy 4K TV’s when signal sources are limited? 5G? It’s just around the corner, being delivered in that a self-driving truck.

If you want to be ready for the next round of services when they are available, buy the features that will be of real use to you. And don’t complain that they sold you this lousy non-5G phone when they knew it was coming soooon...

Your the first person so far that didn't miss the point, and you have a valid point. But koodo uses telus's towers. Telus offers 5g but koodo doesn't, and doesn't really have an excuse not to.


They likely will eventually. It's product differentiation between the main and sub brands atm.

I would like to bring into question the ethics of koodo selling 5g tech when they don't have the supporting infrastructure. Especially these +5g and ultra 5g phones which come at a substantially higher price tag then the 4g tech that they have the infrastructure for. I feel like this is wrong. The new generation of phone are a lot more expensive because of the 5g tech that their customers can't even use on their networks. It feels like theft to me. 

 

The options as I see it are to A. Not sell 5g capable phones which would mean losing customers, B. Selling those phones at a lower price because they cannot offer the capability.

I think that would actually bring more customers in. And one might think that this would cause a large loss to the company, but phones are marked up so insanely high that I really don't think it would hurt them. As an example the last time I bothered looking into it was with the Samsung s7 which had a manufacturing cost of $450 but being retailed at over $1000 when it was new. Now these new phones are retailing at over 2k and I sincerely doubt that manufacturing costs have increased much at all. I think the company could bare the impact of selling these phones closer to the at cost value and make up for that loss with the increased number of customers they would get from selling these new gen phones cheaper then the competition. This would also have the added benefit of driving the retail prices down in general as other companies would have to compete with a lower price point.

Option C is to get more money out of telus and build the infrastructure.

Now I doubt they would do anything like this because they are a large greedy company that is a subsidiary of an even larger more greedy company that practically has a strangle hold monopoly on the telecommunications industry in Canada, but I think they should consider something like this.

I don’t see why it’s not ethical to sell these devices with new capabilities. Just because Koodo doesn’t offer 5G services doesn’t mean they are obligated to stop selling them or lower the cost of the device. The manufacturers will continue to update new devices with better functions and technological features. 

You have to remember the manufacturers are the ones that determine what the cost of the device would be. They are the ones marking up the price, not Koodo. Koodo only purchases them from the manufacturer at a certain cost. Through the Tab Bonus, they are subsidizing a portion of the cost to the customer. That is the trade-off for upgrading your phone with Koodo as opposed to purchasing it upright at the retail price.

You can argue that the subsidies have significantly decreased compared to a few years ago, but this has been the trend for all Canadian carriers as the landscape of the mobile industry continues to change.

At the end of the day, Koodo is operating a business. They are only a cell service provider and not the makers of the devices. As you already know, Telus is creating a 5G network infrastructure. It’s possible they may eventually allow Koodo to access this network. Usually it takes longer for them to implement this on the Koodo network, as they have with VoLTE and wifi calling.

If you really want to lower the costs, you can easily buy used phones or mid-range devices upright on Amazon, eBay, Facebook Marketplace, Kijiji, and other big-box retailers.

I used to work retail, I can tell you for 100% certainty that the retailer is the one choosing what price they mark up to. The store i worked at market up most of its products by 40% the only exception were products that were regulated by the gov. This is why you will find 2 of the exact same product being sold for different prices at different retailers, and why price matching programs exist. 

Userlevel 7
Badge +4

Everyone wants to sit on the front row for a dime. You won't get a McLaren 720s Spider for $20k just because you'll never be able to drive it at 300 MPH, and you won't get a discount on a 5g phone simply because you can't use 5g while on Koodo's network.

Just like the first person you seem to have missed the point. Whether or not I can ever drive that McLaren 300mph or not, it can still go that fast and its still going to be fun to drive on the highway because of the power it has. If you buy a phone from koodo, you will be using their network which doesn't have 5g infrastructure. So its like buying a McLaren at full price that someone swapped the engine out with an engine that only gives you half the output that the stock engine would have.


Not being able to use the phone to its full capability at this time is NOT the same as the phone not being capable of it. If you buy the phone from koodo, then switch to a carrier that offers 5G service the phone will get 5G speeds. And if koodo sells it at a big discount that's EXACTLY what a lot of people are going to do.

Userlevel 7
Badge +4

I'd like to disagree. The pricing has been pretty steady over the past couple years and the 5G enabled phones aren't any more expensive than to deal with the fact that it's a new phone with new features (besides 5G). So I'm not seeing these phones coming at a "substantially higher price tag then the 4g tech". Unless I'm missing something?

Samsung:

S10 launch was $1260

S20 5G was $1320

S21 5G was $1130

 

IPhone:

11 launch was $979

12 5G was $979

Userlevel 7
Badge +4

I used to work retail, I can tell you for 100% certainty that the retailer is the one choosing what price they mark up to. The store i worked at market up most of its products by 40% the only exception were products that were regulated by the gov. This is why you will find 2 of the exact same product being sold for different prices at different retailers, and why price matching programs exist. 

Some retailers do mark up their price higher than the MSRP as suggested by the manufacturer. However, I don’t see how this relates to our scenario. Koodo subsidizes their phones through the Tab Bonus to keep their customers using their services. The customers aren’t paying the retail price upright like the stores you are referring to, so I don’t see why you are making that comparison.

As I said earlier, you can argue about the diminishing subsidies afforded to phones since the disappearance of 3-year contract plans, but nonetheless Koodo is still offering these subsidies. It is also the reason why some customers choose to upgrade their phones through Koodo and not buy them at the retail price at another store.