Jun 26 2009
To sign, or not to sign?
My wife’s cellphone contract is expiring in the next week and we are starting to consider the options. The cellphone industry in Canada has undergone a revolution in the last 12 to 18 months on both the voice and data fronts. No longer does it cost $100 for 200 megabytes of cellular data - quite to the contrary, I now have a data plan which offers me a generous 6 gigabytes for $30 per month and allows laptop tethering, although it’s a promotional plan which has came and went a few times. On the non promotional front it’s a little less of a deal at $30 for only 1 gigabyte, but that’s a whole other story that I really should dedicate an entire new post to.
With the impending entrance of several (big and small) new competitors to the market courtesy of a recent spectrum auction, further shapeups are inevitable, and the incumbents are taking notice - in the last few months even more drastically improved monthly pricing structures have arrived offering Canadians even better deals. Of course, to obtain these new plans and great new handsets consumers must accept a contract term, and with many of the fancier handsets only being remotely affordable with the dreaded new trend of 3-year contracts, and some (such as the iPhone) demanding them (no other option) the carriers have made consumers pay for the lower rates with longer terms. Of course, without paying a hefty early termination fee, the incumbents now have the consumer locked into a long term contract, possibly making then unable or unwilling to move to one of the new competitors regardless of how much the savings could amount to.
In the greater scheme of things I think that the consumer still wins when compared to the realities of years passed, but the long term contracts are troubling to many Canadians, and there is clearly going to be much better deals to be had once the new companies arrive.
I called my wife’s cellphone carrier today to see if they were willing to make us an attractive offer in return for us signing a new contract. What we ended up with, despite the reps insistence that he was offering us a “special”, “very attractive” plan that was “not available to the general public”, it was still rather lacklustre, offering only 200 peak minutes a month, free evenings and weekends, free incoming calls, and a bunch of features which in my opinion amounts to fluff (caller ID, voicemail, unlimited texts) the best rate they could give us was still $35 per month. Not bad, but when I inquired about adding a data plan things got weird. My wife would really only need a few hundred megs per month for a device like the iPhone - really, a 500 megabyte plan would probably suffice. That said, it’s $25 for a 500 megabyte plan, but the 6 gigabyte promotional data plan is currently available again for only $30. Although the latter is a good deal (one which I subscribe to because I enjoy and utilize it), it’s a huge overkill for my wife, yet they were unwilling to offer a significant discount (beyond $5) on the 500 gig plan to make it attractive. Regardless, despite the overkill nature of the 6 gigabyte plan it would be stupid to not pay the extra $5 for it regardless.
In the end all the figures add up rather unattractively. My wife is contemplating getting an iPhone, but the fact that she would be forced into a 3 year contract with only a mildly attractive price plan (equalling over $75 a month after taxes) suddenly dampens her interest.
At this point I’m seriously contemplating just putting things on the back burner for a few months, letting her cellphone plan continue as-is without a contract, and seeing what appears on the horizon with the new carriers. Once the new entrants open up shop (inevitably utilizing GSM) we could contemplate just buying her a used iPhone 3G (which will get cheaper as the 3GS saturates the market and people upgrade) and then hooking her up with the competition instead. Rumors are we can expect to see unlimited minutes and huge (if not unlimited) data for about the same amount of money as she is looking at for 200 minutes and 500 megabytes with her current carrier.
The new few months will be interesting indeed. Bring on the competition, Canada awaits.
Mark,
I would recommend waiting it out. The new competition (you mentioned) is on its way, and Rogers, Bell and Telus are in for a scare.
Dont lock in a 3 year contract, you’ll regret it. I am an iPhone user, but got my phone from the US to avoid the contract. I pay $30/mo + $10 for data (I can remove whenever I want :P).
Anyways, i’ve been reading your blog for awhile now, thought I would contribute.
Feel free to email me sometime. I’ve been out of the flying loop for a good year now and would be nice to talk to someone in the area who shares similar interests.