Quote:
Originally Posted by opendoor
I don't really like the term "subsidy" for phones. They're not subsidizing it, they're just amortizing the cost out over the term of the contract by charging higher monthly fees. A $500 discount on the purchase price of the phone works out to be a little under $14 a month over 36 months and companies easily make that back through ridiculous prices for wireless service in Canada.
Here's the cheapest reasonable Rogers plan for new customers that can be had with a subsidized phone which costs $66 + tax a month:
200 minutes
200MB data
6pm evening and weekends
Voicemail
Call Display
So that's $2526 + tax over 36 months for an iPhone or Galaxy S3 ($150 purchase price plus $2376 in monthly charges).
Now compare that to a place like Virgin Mobile where you buy the phone outright (though you can use their Supertab thing where you get 10% of your bill back every month):
200 minutes w/ unlimited incoming calls
300MB data
Canada wide calling (i.e. no long distance charges within Canada)
5 pm evening and weekends
Voicemail
Call Display
That costs $50 a month for a 36 month cost of of $2270 + tax ($650 purchase price plus $1800 in monthly charges less $180 from the Supertab).
So you get a better plan for $250 less over the 3 years and you also get an unlocked phone. Obviously some people are on sweetheart deals and don't pay anywhere near that for Rogers, but the idea that these companies are hurting from these "subsidies" is silly. They just make up for it with ridiculous charges and fees.
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The problem is you're comparing two different services. Virgin pickybacks on other networks and you don't get the same reception as with Telus/Bell/Rogers. What your really getting with Virgin with a phone outright is 10% off your bill or a savings of about $6.00/month. So you're getting about $150 for signing a 3 year contract.
Telus also offers a discount on your monthly bill in lew of a phone discount.