Cell Phones

When did cell phone agreements change to pay the phone over 2 years vs. free phone?

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  • Jul 30th, 2020 12:06 pm
[OP]
Newbie
Jul 28, 2019
69 posts
43 upvotes

When did cell phone agreements change to pay the phone over 2 years vs. free phone?

Did something happen recently that pushed the carriers to do this? Articles, your thoughts are appreciated.
19 replies
Deal Addict
Jan 13, 2014
1921 posts
1028 upvotes
Calgary
There’s also the ever-increasing cost of cell phones. Things were so much different when a flagship device cost $599 vs upwards of $1500 now.
Deal Expert
User avatar
Oct 26, 2003
33864 posts
3782 upvotes
Winnipeg
^Back then every service provider wants to lock people into 3 year contract was a big deal to reduce that to 2 year, however with more options of no contract from pay as you go providers, it is not that big a deal anymore. People who don't mind longer contract for a more subsidized phone will get contract, and people who prefer to buy their own phone will just get pay as you go providers so they don't get locked in.
Deal Expert
Aug 2, 2004
32348 posts
6234 upvotes
East Gwillimbury
activjust80 wrote: Did something happen recently that pushed the carriers to do this? Articles, your thoughts are appreciated.
Everyone complained about 3 year contracts. They got rid of it and we got screwed. No more subsidies on hardware. Pricing went up and everyone thought we were better off.

Give me a good price plan and lock me in for life
Jr. Member
Feb 29, 2020
101 posts
15 upvotes
Are you talking about Device Subsidy VS Device Financing?
activjust80 wrote: Did something happen recently that pushed the carriers to do this? Articles, your thoughts are appreciated.
Deal Addict
User avatar
Sep 7, 2012
2723 posts
808 upvotes
West
Gee wrote: Everyone complained about 3 year contracts. They got rid of it and we got screwed. No more subsidies on hardware. Pricing went up and everyone thought we were better off.

Give me a good price plan and lock me in for life
I am way better off with the new system...
$40 for 8GB, unlimited talk/text, and got an iPhone XR for $200 taxes-in last year after discounts (that amount includes the monthly phone tab cost).
I remember 10+ years ago I was paying 60$/mo for 400 daytime minutes, unlimited evening/wkends and 500mb of data.
Oh, and I can port my phone number to a different provider as I please (which you could not do in the past). The new system is significantly better. You just need to find good promo plans/phone deals, which is what RFD is for ;).
On the Koodo $40 for 8GB Plan 😉
Jr. Member
Feb 29, 2020
101 posts
15 upvotes
Well pretty much it’s a new transparent way to get a cellphone service & getting help paying a new device. I think some people realize they couldn’t keep up paying over $150.00 / Month for cellphone service after getting a new $1500.00 phone...

So generally you see your monthly service charges separately the the device charges. I think this avoid the confusion mostly when the agreement is over and why the $150.00 price plan doesn’t go down...
activjust80 wrote: Yes, I am.
Deal Expert
Aug 2, 2004
32348 posts
6234 upvotes
East Gwillimbury
WhatsTheRush wrote: I am way better off with the new system...
That is subjective.

I totally agree that the plans are a lot better. But the days of subsidized hardware is completely gone. There are no more discounts. It is basically interest free financing. Koodo included. You wouldn’t be able to get an iPhone today from Koodo for that cheap
Deal Addict
User avatar
Sep 7, 2012
2723 posts
808 upvotes
West
Gee wrote: That is subjective.

I totally agree that the plans are a lot better. But the days of subsidized hardware is completely gone. There are no more discounts. It is basically interest free financing. Koodo included. You wouldn’t be able to get an iPhone today from Koodo for that cheap
In my case it is not subjective at all. I am better off in every way, no matter how you look at it.

Don’t get me wrong I can appreciate the cynicism. Even with Koodo’s brand new tab system they just came out with (name changes etc), they are already offering discounts on phones. Just wait until Black Friday, there will almost certainly be even better deals.

Here is an example you can get right now: an iPhone 11 64gb for $0 up front and $648 on the tab (so the total amount you pay for the phone is $648+tax), on a $45 minimum plan (doesn’t have to be a new in-market plan, can use your current plan also). To purchase that same phone from Apple.ca it costs $979+tax.
On the Koodo $40 for 8GB Plan 😉
Penalty Box
Jun 24, 2015
3867 posts
1134 upvotes
Woodbridge, ON
There are Pros and Cons for every situation

if you are used to getting a discounted or Free mid range phone every 2 years, this means with any carrier you NOW have to finance your phone over the course of 24 months, its not free, plus you are Forced to migrate to the Newer price plans which start at $75 dollars, so if u were paying less, your bill automatically goes up.

Who are these people who say they are getting a better deal NOW than before when A) the monthly plan fees have increased, and for some grandfathered users they are forced to switch to the new plans and sometimes increase their bill by $25 dollars. not only that but a lot of these people were getting a free or heavily discounted (subsidized) MIDRANGE, i repeat midrange, not top of the line handset every 2 years and they were not paying any extra on their bill, but with the NEW pricing structure, they have to pay additional each month depending on what handset they choose and the average decent midrange phone now has a monthly financing of approx $25 per month

if u add that up, your probably paying anywhere from $1500 to $2000 MORE every two years, yes your paying MORE. how is this a good deal? well the people who are raving about this probably have very little knowledge in financial literacy. I have been tracking my finances for the last decade yes decade, i have seen the rates go up, going up is only beneficial for the cellphone company, never the consumer. they sometimes blab "yeah we are giving you more value" but nothings free, its a joke

so the second part is, if you are a BYOD kinda guy (or girl) who does not get subsidized handset, you can lower your monthly plan by a bit, and stick with the bYOD rates since you now no longer have subsidy on your plan they will lower it for you, but you sitll have to fork over $$$ every two years to buy a unlocked handset, not everyone has that kind of money laying around especially those of us who have mortgage payments, car payments, car insurance, house insurance, property tax, gas bill, water bill, the list goes on
Hi
Jr. Member
User avatar
Mar 2, 2017
130 posts
109 upvotes
Handset prices have kept creeping up over the past few years, so that has to be considered too. Although in my opinion, they were able to get away with it because the full price was less evident to the average consumer. A combined service / hardware fee obscured the real cost. Maybe now that the price of a shiny new $1,500+ phone is front an centre, there'll be some pressure to rein in those prices.

I think mobile telcos also made a mistake (from their point of view) in allowing grandfathered plans to perpetuate. You don't see that as much in other utilities. Your specific cable package may no longer be offered and they may allow you to keep it, but they're going to bump the price up a couple percent every few months. As consumers we got used to it and benefited from it, but now we're pissed off when the changed the game plan.

And while subsidies may not exist as much in the classic sense, phone credits are definitely still a thing. Although I think they're probably more like manufactures rebates that you only get if you sign up for a 2 year commitment. It's just another game to be played. Look at the Note 10+ on Virgin's page, $1,700 retail or $1,080 with financing. (Koodo's basically the same too.) Straight from Samsung, it's $1,460. So yes, Virgin and Koodo's retail prices are massively inflated. And if life changes and you're forced to cancel, you've got a problem. But if you can get the device credits and pair that up with something like a mitigation or winback offer, I think there's money to be saved (if you can accept the risk of being locked in for 2 years). Plus there's always the RFD approved Black Friday / Boxing Day gift card bonuses that you may be able to stack.

And I said this in another thread, but I'd be up for forcing carriers to completely split up service and hardware. Maybe some of those manufacturer's incentives would actually start flowing down to the raw price of the phone. And then the carriers / oem websites / electronics stores etc would be operating on a level playing field. We keep waiting for the fabled 4th national carrier or MVNOs to come along and save us, but with the hardware component becoming an increasingly large portion of the overall cost, we can start by generating some competition in the hardware space. Having said that, even if it was to be implemented, I fully trust the Robellus oligopoly to find a new way to screw us.
Sr. Member
Apr 13, 2005
906 posts
686 upvotes
Markham, ON
I remember the days of $40 plan from Rogers on a 3yr contact that accompanied a flagship phone for for free.

The $40 included 200 outgoing minutes, unlimited incoming minutes, unlimited messaging and 6GB data.

Then 18 months into my 3 year contract, I was able to get a new flagship phone for free but signing another "3 year contract" with the same cheap plan.
Public Mobile, FIDO, TELUS, Koodo Mobile Customer.

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