Shop smart for a deal on next smartphone
Suppose you buy an expensive new smartphone at low or no cost, with a subsidy or “tab” that you pay back gradually over two years.
Does your monthly fee drop when your tab is repaid?
It’s natural to assume your bills will go down after the commitment period. But there is no requirement that wireless service providers reduce your monthly fees once the device subsidy is paid off.
Under the 2013 Wireless Code, a code of conduct created by Canada’s telecom regulator, mobile phone contracts can’t exceed two years. But you don’t have the right to remove a device subsidy from your bill after the contract ends — a decision the CRTC confirmed in a 2017 wireless code review.
Consider the big three telecom service providers: Rogers, Bell and Telus. All three charge the same rate after your tab contract ends, continuing the plan as before.
An exception is Freedom Mobile, a wireless provider rebranded by Shaw Communications after acquiring Canada’s fourth largest wireless company, Wind Mobile, in 2016.
Freedom has a fixed monthly tab amount that drops off your bill after two years. Koodo, a discount carrier owned by Telus, has a similar policy.
Here are comments from the Big Three wireless carriers about their policies. Zac Carreiro, Rogers: “We let our customers know well in advance of their fixed term contract expiring to remind them of the variety of options available, including switching to a bring-your-own-device plan (BYOD) or upgrading their device on a new fixed term contract.
“If they do not choose one of these options, the customer’s plan continues on a month-to-month basis to ensure their service continues uninterrupted.” Nathan Gibson, Bell: “When customers are getting near the end of their term plan, we let them know about special offers to upgrade their device and select a new term plan. Alternatively, they can also choose to activate their existing device on a BYOD plan.”
“We don’t suspend service at the end of a term plan, of course, so customers can also choose to remain on their existing rate plan,” Gibson says. Donna Ramirez, Telus: “We proactively communicate with all our customers in the final three months of their contract to offer affordable device upgrades and opportunities to transition to new plans that match or are even better than our in-market promotions for new customers.
“Customers who would prefer to keep their existing device can choose from a number of bring-your-own-device (BYOD) plans and continue service on a month-to-month basis. Most customers choose one of these options.
“We recently launched a program called Bring it Back, which offers new and returning customers who want to stay up to date with the latest smartphones the ability to save upfront on a new device if they agree to bring it back at the end of their contract.”
As a customer, you can’t assume a device subsidy will fall off your bill after two years. Nor can you ignore messages from your wireless provider as the end of your contract approaches.
There will be pressure to upgrade to a new phone. Providers will offer a mind-numbing variety of monthly tab rates and device discounts to induce you to stay with them for another two years. Try to resist the sales pitches until you check out the BYOD option. This saves money if your current phone suits your needs or you prefer to buy a phone that isn’t tied to a contract.
The wireless code gives you the right to unlock your old phone from your mobile carrier and take your number with you when you change phone companies. You also have the right to buy a new phone that is sold unlocked or is unlocked after purchase.
If you’re not on contract (or getting close to the end of it), then start looking at BYOD plans, says WhistleOut, a company that helps customers compare and choose telecom providers.
“There’s simply no cheaper way to get a plan in Canada than to bring your own phone,” it says, adding that BYOD plans tend to be cheaper by $5 to $10 a month than ones with subsidized phones included.
BYOD plans operate monthto-month with no long-term commitment. So, you can grab a promotional deal that comes up (like last year’s short-lived 10 GB for $60 plans) without paying any cancellation fees.
My advice: Don’t leave your phone plan intact after two years, assuming the price will decline. The major providers will keep charging the same amount.
Think twice about upgrading your phone with the same carrier and being locked in for another two years.
Consider buying your own unlocked device or bringing your existing device, along with your phone number, to any other mobile carrier in Canada. This ensures flexibility if you find a better deal elsewhere.