Is Now A Good Time To Get Locked Into A New Cellphone Plan in Canada?

June 2, 2009 4:00 PM

Is now is a good time to get locked into a 3 year contract or should I wait to see what the (apparently forthcoming) new competition brings.

My current Telus Mobility contract expires in three weeks - and I'm planning on getting either an iphone or the HTC Magic (stay tuned for a future ask.me question, I'm sure) with Rogers/Fido. Most of the prices I've seen are based on a 3 year contract - but I'm reading talk of some new providers coming into Ontario soon, and wondering if now is a good time to sign up or if I should wait to see what the competition brings. Thanks.

posted by backwards guitar to shopping (8 comments total)

Do you have the option of paying the actual price of the phone and not getting locked in at all?
posted by gjc at 4:21 PM on June 2

I've worked for Telus, Bell, and Rogers and I will always recommend nothing more than a 2 year contract. Yes, you will have to pay more for your phone, but you're locked in for less time. This is especially important when it comes to Bell and Telus. If anything happens to your phone, you have to buy a new one out of pocket. With Rogers this is easier as you can get unlocked gsm phones somewhat cheaply. The 3 year contract is almost never worth the 100-200 dollars you save by signing up for it.

Note: 3 year contracts are sort of the norm in Canada. Very little wireless competition here.
posted by heavenstobetsy at 4:29 PM on June 2

Um, to answer your actual question...It depends. There will always be something new and cool that you may wished you had waited for. This is one of the advantages of going with a gsm network like Rogers. Unlocked phones are everywhere. That said, I'm waiting for the HTC Magic. If you're amped for something you know is coming out soon, then wait.
posted by heavenstobetsy at 4:31 PM on June 2

It should be possible to pay the actual price for the phone ($599 for the Magic), but I believe the data plans are based on 3 year contracts too, so the price of those goes up as well.
posted by backwards guitar at 4:33 PM on June 2

I'm not overly amped for a new phone, but Telus coverage in my area is a little lacking, and my current phone's battery leaves a lot to be desired. I'm mostly just holding out to see the next iphone and for my current contract to expire. It's not so much the prospect of new phones that has me wondering if I should wait, but if some of the new competition I've heard about will make for some better prices/contracts. Maybe the question I really want to ask is when can we expect this new competition to come to market?

Thanks for the answers so far.
posted by backwards guitar at 4:38 PM on June 2

Depending on how the Early Termination Fee contract is set up (I don't know how Canadian plans are structured), I wouldn't worry about it too much. The iPhone (you're waiting for the next release, right?) retains its value well, so that if you have to jump ship to a different carrier, you can sell your existing, working phone to cover the ETF in some part. I think the unsubsidized cost of the phone reflects what happens if you sign up with the subsidized contract, and then break contract immediately. If you don't choose the cheapest, worst phone, its value will deprecate a little more than the prorated ETF (you have those, right?) so you're not really going to lose a lot.
posted by meowzilla at 4:49 PM on June 2

I've been looking at Rogers in N.B. for my Blackberry, and the difference in data plan costs is shocking. As in, on a 3-year contract, you get something like 0.5GB, and for the same cost in a 1/2 year plan, you get maybe 20 MB¹. On that note, you CAN get data contracts separate from your phone contract, so you might get a 3-year data contract & not for phone.

ETF fees are I believe the lesser of $400 or 20*months left in contract.

I wouldn't worry about the other two guys yet - they'll be at least a year I think before they're up and running, especially outside of the major metro areas (unsure about your location), and add on another few months to work out the kinks...who knows?

1. very rough figures, but the gist is true.
posted by Lemurrhea at 6:27 PM on June 2

Wow, that's crazy. I understand that signing a contract is a way to subsidize the phone, but the service (data or voice) shouldn't be included. I wonder what their rationale is for that? FWIW, I'm in the US on ATT and the Blackberry plan is $30 a month for 5gb. And I think the ETF is $5*months remaining.

meowzilla- you are sort of right about the ETF thing, although at least in the US, it doesn't track exactly dollar for dollar. The unsubsidized cost of the phone is, in theory, the actual retail price of the phone. They give you a discount on the phone in exchange for the promise of being their customer for x years.

What I'd like to see (in perfect future land) is a line-item on the bill that actually reflects the cost of financing the phone. When you are done paying off the phone, your bill goes down. The ETF would simply be the balance remaining on the financing. I think this would clarify the process a lot.
posted by gjc at 7:36 AM on June 3