Phone Savings

A month ago, for the first time ever, a phone I owned crapped out on me. Of course, as is my luck, it was a phone I had bought outright, not on a plan. I spent total $450 for it. It was a Samsung Galaxy S3, a great phone, that is before it started giving problems. And it conveniently died just a a week after the warranty ended so repairs are not covered.

phone dies days after warranty ends

Joking aside, you are probably asking why I spent so much on a phone. Why not buy a cheap phone? Or better yet, why not get one for free on a plan?

One major concern at the time was that I was not sure I was going to be staying in Canada/Toronto long-term and I did not want to lock myself into the typical 3-year plan the major Canadian carriers had at the time (most Canadian plans are city-specific or region-specific with roaming fees charged once you leave a coverage zone). By buying a phone outright I could either sell it if I left Toronto within a few months and get back most of my money OR bring it with me unlocked and, rather than buy a new phone in my new location, use it instead.

I got the phone on sale at a great price too, $200 less than it cost elsewhere. As a testament to how much of a sale I got, new phones of the same model and make as my phone are currently selling for the same price I paid for it a year ago. So, if needed, I could have easily sold back the phone a few months after I bought it and got back basically all my money. Another reason I had at the time was that, during b-school, I got used to using a smartphone like a mini-tablet. So when I came back and had to get a Canadian number I was looking for a fast phone with features that were excellent for business and personal use when on-the-go. The Galaxy S3 fit the bill!

It sucks that my phone died and while I am way more pissed at Samsung than at my carrier, Mobilicity, I am still a little angry with my carrier’s non-helpful response that they are not responsible for helping me with my phone problem, especially considering I bought the phone from them. However, I’m not gonna switch from low-cost Mobilicity to try to get a phone for much cheaper on a 2-yr plan with one of the bigger carriers. Here’s why.

If I got a phone and plan with one of the three major cellphone providers here in Canada I would have paid something like $299+tax for the same phone, instead of the $399+tax I paid. That is $100 less than what I paid. However, as previously mentioned, if I had signed up with one of the major carriers I would also have been locked in to a minimum 2-year plan at a much higher monthly rate than my current one. As it was though, I got unlimited talk, data and text PLUS free calling and texting to the US at a discount rate from Mobilicity ($29+tax, instead of $45+tax) and I was NOT tied to a plan. Furthermore, my all-inclusive bill from Mobilicity has been $39.55 for 14 months now, taxes and fees included. The average for any of the big three phone companies for a similar plan is $95 and that’s only for 2GB of data. This means that I have saved at least $45/mth for the past 14 months, or $630. I paid just over $450 all in for my phone. So although my phone has now died I am still $180 ahead. And I can once again do the same thing of buying a phone outright and continuing on Mobilicity’s unlimited plan because I’ll still be saving money compared to if I was on a plan with one of the major carriers.

In Canada the big three cellphone carriers have an oligopoly on the system.

Canadian Cellphone Companies Market Share
Source: Seeking Alpha

Most people are with one of the major carriers (Bell, Rogers and Telus) and make no attempt to leave. People usually mention quality of reception as a reason for not switching to a cheaper carrier. So far, my reception quality with Mobilicity has been pretty great.

Another reason people used to give was the inconvenience of having to change numbers every time you switch carriers. Now that Canada has phone number portability, if you want to save money, the least you can do is try out one of the new, also cheaper, carriers. If you find out you don’t have good coverage in your area then by all means switch back to your original provider. However, you may discover that coverage is good to great and if this occurs you will be well-pleased to know how much money you can save on an annual basis by switching. If you are in the US or elsewhere in the world, it goes without saying that you too can do the same price comparison and calculations before going with the company that every one else uses.

At the same time, it still stings when I consider that I either have to spend a considerable amount of money to fix my phone or buy a new phone!

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