Canadian Cellular Contracts: Just Say No

As much as I like to bitch and moan about the CRTC they’ve managed to do one good thing for Canadian mobile users. As of this past March they’ve made Wireless Number Portability (WNP) mandatory in our Great White North.

What WNP means is that you’re able to switch your wireless carrier while keeping your current mobile phone number — the idea (I hope) being that the carriers will become more competitive with each other by offering lower rates and better handsets so that their customers don’t jump ship.

It’s great news for customers, but where it all goes to hell is with multi-year contracts.

Wireless providers are notorious for dangling carrots like zero-dollar handsets or 3 months of free service in exchange for a two (now often three!) year commitment to their service. What they don’t tell you up-front is how much it costs to get out of that commitment.

Permit me to be the bearer of bad news…

I took a stroll through the Toronto Eaton Centre this past week and put some tough questions to each of our country’s four major wireless carriers. Here’s what I found out…

Fido logo

Okay, so I didn’t actually go into the local Fido Store but as a loyal customer of theirs I previously (and foolishly) signed up for a three-year contract with them in order to keep my City Fido unlimited local calling plan and hiptop unlimited data service at current rates.

Now, with the hiptop platform abandoned by their parent company Rogers and that possibly must-have iPhone on the horizon I’m realizing the error of my ways.

Lucky for me Fido currently caps the penalty for breaking a contract at $200, which is actually pretty generous; an average $50/month plan on a three-year contract would otherwise cost you $1,750 to get out of with 35 months remaining on it.

Rogers Wireless logo

Rogers Wireless has recently upped their contract-breaking cap to $400, still pretty reasonable when compared to almost two thousand bucks. But because they now own Fido (and thus have a monopoly on GSM service in Canada — thanks, CRTC!) I expect that the Fido penalty will be upped to match it sometime soon, if it hasn’t already done so.

[Note: the following info from Bell and Telus has been updated. The original information was given to me face to face by in-store reps; it was later revealed that this information was incorrect. Thanks to the commenters for the heads-up -- this new information is based on recorded phone calls to the two companies.]

Bell logo

Like Rogers, Bell has a $400 cap on the penalty to break your contract with them. But if your penalty falls short of this limit you should know that you’ll be paying the full monthly charge for your calling plan, plus system access fees, taxes and any other extras you’ve added to your service.

Telus Mobility logo

Telus Mobility will only charge you twenty bucks a month for the remainder of your contract with them, but the cap on their penalty is a whopping $700! This amount is higher than the no-contract price of the most expensive handset in their current lineup, making the subsidized price of Telus hardware not such a good deal after all…

It should be pretty obvious at this point that a cellular contract from any Canadian carrier is not at all the value it appears to be. If you’re on Fido or Rogers you can easily beat the scam of paying full price for one of their locked-down mobiles by going online or to your local Chinatown and picking up an unlocked (or SIM-free) unit. You can read more on the importance of SIM-free handsets in this excellent All About Symbian editorial. Fido and Rogers customers have it a bit easier in that their GSM network is pretty much the world standard in wireless communications. Because of this there is a wider selection of handsets to choose from, and in my opinion they tend to be better looking; this is thanks to GSM’s European heritage, where fashion-conscious users tend to pooh-pooh ungainly design elements like external antennas.

Both Bell and Telus, on the other hand, use the CDMA standard — ubiquitous in North America but requiring that the user call up their carrier and register a new phone’s ESN (electronic serial number) before it can be used on the network. This makes buying an unlocked handset difficult to impossible, but you can always buy used or pay the full retail price, knowing that you save in the long run by not being locked into a contract.

Either way it’s time for Canadians to step up and let our carriers know that we’re the ones running the show. If we can steer clear of the siren song of carrier contracts I predict that within a few years we’ll all be on the sunny shores of better, cheaper service!

About Andrew

Mobile phones, Linux and copyright reform. Those go together, right?
This entry was posted in Mobile and tagged , . Bookmark the permalink.

29 Responses to Canadian Cellular Contracts: Just Say No

  1. al how says:

    I have a Telus handset I’m not using if anybody needs to use that company but doesn’t want to be locked into contract. I’m happy to help fight the good fight.

  2. AC says:

    Mr. Howell, thanks for the comment. I realize that I’ll be in your company within the hour and could very well go all analog and tell you this face to face, but for the benefit of everyone else I’ll post the best homegrown resource for mobile phone users that I know of:

    http://howardforums.com/

    In addition to tech support, rumours and general navel-gazing, there are a bunch of buy and sell listings, many of them local to the GTA. The one with phones from Telus is here.

    Now about that Micetro show…

  3. Justin says:

    It seems that some of your information is incorrect. To cancel your contract with TELUS it is $20 flat to buy out the remaining months in your contract or $100 if there are 5 months or less. TELUS also has one of the best retention departments which is proven by their industry low churn rate. I would hope that any TELUS employee at Toronto Eaton Centre would be aware of such basic information since it is on every contract signed by customers.

  4. Mike says:

    Did you actually ask any questions to the providers? Telus caps theirs at $20/month for the remaining months unless it is less than $100. I am no expert on Bell but I thought it was a set limit at $400. Increased along with Roger’s from $200 max.

  5. AC says:

    Justin, thanks for the friendly heads-up!

    Mike, apparently your information is also incorrect; see above for updated info…

  6. Ed Miller says:

    AC:

    You are timely, as usual (remember the Ubuntu advice?).

    I’m moving at the end of the month and face the prospect of obtaining a solo phone line (no roomies this time) and am upgrading to high-speed from dial-up. I’m also considering getting a cell phone as well, so I’ve been researching the bundles from Bell, Rogers, Primus, Telus, et al.

    The limiting factor with my move is that I won’t have an existing phone line which seems to rule out all but Bell for the land line (I don’t want cable, so Rogers is out). I’ll likely go with Bell, but for just the 2-year contract on the ISP and cell regardless of who I do end up going with.

    thanks for posting the forum link –I’ve already spent time looking at the various forums for any pitfalls I might run into.

    Any comments about Bell’s latest hot phone, the LG Chocolate?

    Cheers,

    Ed

  7. AC says:

    Hey Ed,

    Good seeing you the other night!

    Because my household is a Bell-free zone a DSL line isn’t in the cards for me at the moment.

    I have heard of people getting good discounts with all-Bell service (just like you can save 10% on your total bill with three or more products from Rogers) but I’d be leery of anything that locks you in to one company. Let’s not forget that Toronto Hydro’s city-wide WiFi service is still only in the testing phase!

    And glad you asked about the Chocolate… It’s definitely yesterday’s news, as fashionistas everywhere are holding out for LG’s new looker, appropriately named Shine.

  8. Mike says:

    Incorrect? According to your edited article my information is correct. $20/month for Telus. $400 cap for Bell. Yep, yep. 35 months x $20 = $700 max… go figure considering you have to pay the first month.

  9. AC says:

    Right you are. Guess I wasn’t paying attention past your inflammatory first remark…
    ;-)

  10. Ed Miller says:

    AC:

    yes, it was good to see the, er, analog version of you, too.

    I’m leery of going with one company for so many services, to be sure, but I will definitely stick to a 2-yr contract so that 2009 becomes my Year of Many Connectivity Options. Maybe we’ll have free telephone services (and flying cars!) by then.

    Cheers,

    Ed

  11. I moved Halifax with my girlfriend from Calgary – we’re both going to University together. So, naturally, we don’t need cell phones anymore (since we’ll always be together).

    I called Rogers to cancel my contract. They asked for $800 total. $400 for each phone! I asked them when my contract expires, they told me a date in 2009. I was a bit shocked as I’ve been Rogers customer since 2001, and they explained that everytime I did a ‘hardware upgrade’ or a ‘plan change’, they renewed the 3-year contract from the beginning.

    Awesome, now I either pay $800 to get out of their contract or I keep paying $100 a month for two phones I don’t need.

    You’re right, we lack competition – that’s why the prices are so terribly high and service so crappy (Rogers customer service tell me different things everytime I call- I think they must get less than 1 day of training)

  12. AC says:

    Ack, that sucks! :-(

    Renewing contracts without at least letting you know seems almost criminal — maybe you could either:

    1. Switch the lines to prepaid, or
    2. Lower the rate plan on both phones so that you’re paying the bare minimum in monthly charges for the remainder of your contracts?

    Some math would be involved with this, but I know Fido has what they call “retention plans” for the sole purpose of keeping their subscriber numbers up. Maybe Rogers can do the same?

    Best of luck at any rate, and thanks for the comment!

  13. raj says:

    so I have about a year left on my telus contract, how much would it be to buy it out?

  14. Rayman says:

    Ok… Really pulling a straws here but hear me out;

    Some contracts haev a loophole that allow you out of “said” contract if the rates are elevated… Could this include the buy out rate as well?

  15. AC says:

    Hey Rayman,

    Thanks for the comment; I’d love to help you out but I’m not sure I understand the question…

    I think you can get out of any carrier contract, but you may end up paying a penalty equal to or even more than the full retail price of your “zero dollar” handset, which was the point I was trying to make.

    If I can further clarify just let me know!

  16. Sunny says:

    Just to comment a little more on the feature article here. I’m finding that most carriers now are getting wise on locking an individual on a contract to obtain some additional features and services.. for example.. Free Call Display, or Free Extended evenings and weekends etc… Service perks for the duration of the contract. To me this is more appealing than saving a cost on a phone unit.

    I thinik phone companies should offer to buy out your contract (or atleast some of it) as opposed to giving you a discount on the phone. Especially when you consider that those who know anything about buying a cell phone may already have made a decision to buy thier phones from an alternative vendor.

  17. AC says:

    Hi Sunny,

    Those free extras are often tempting — and if I’m not mistaken you’re referring specifically to Rogers here — but the flipside is that carriers are also prone to hobbling features on certain handsets for no other reason than a selfish cash-grab.

    Here’s the most famous example I can think of:

    http://preview.tinyurl.com/24m3dz

  18. AC says:

    Is this really Mrs. Hotdogboy? ;-)

    It comes down to math, ultimately… If the money you save per month on your new Rogers plan x 22 months is greater than the $440 penalty from Telus, then on paper at least you come out ahead.

    Should you go this route I’d suggest three things:

    1. If you want to keep your current mobile number tell it to Rogers when you sign up with them, and do that before you cancel your Telus plan. It can take up to a week for your number to get ported over.

    If you do it the other way ’round (cancel Telus before signing up for Rogers) you might lose your phone number into the ether…

    2. Do not agree to anything beyond a month-to-month commitment with Rogers — i.e. NO CONTRACTS!!!

    3. If you don’t like the handsets that Rogers has on offer just pay the $25 for the SIM card (that’s all you need for service with them), then get an unlocked phone from anywhere you like — Pacific Mall, eBay, etc…

  19. Viv says:

    I am in the same spot right now and I’m trying to get out of my Telus contract. When my old cell phone died (my old Samson just literally melted into 2 pieces) I went and got a new Nokia. Sounds good, right? NOT! At that time, Telus offered me $100 or $150 bucks off my Nokia 6265i for a 3 year renew and the phone was approx $350 at that time. Since I’ve already been with telus for several years (since 2001) I figured it wasn’t a big deal and I’ll continue with their phone services. At that time to get the $$ off, I had to re-renew my contract with telus (and there was 1 year and some odd days left) I didn’t realize when I renewed it, it would be another 3 years in addition to the 1 remaining year in the contract (blame it on youthful stupidities)

    After calling customer support today, it turns out I have another 22 months and 8 days left on my contract and it’ll cost me $440 bucks to buy it out. Originally when I signed up for telus, the buy out was $100 dollars or $250 if there is over 15 months left. I was willing to pay for the $250 if need be, but the $440 is absolutely nuts.

    The biggest irony now is Rogers is willing to give me a MUCH better plan than what I have with telus and they wouldn’t budge to give me a better deal.

    Do you think it is worth it to break it to jump ship or to suck it up? What do you guys think?

    • Leigha says:

      Telus has the worst transparency, inconsistent advice/help (..not to mention lack of customer skills) from the Client Care representatives. And, a shear determination to make any extended contract the worse experience for anyone entering into a 2-3 year obligation.
      Avoid at all costs!
      I am in a similar situation, and feel your pain!

  20. Danielle says:

    Just a comment on your last post…
    “1. If you want to keep your current mobile number tell it to Rogers when you sign up with them, and do that before you cancel your Telus plan. It can take up to a week for your number to get ported over.

    If you do it the other way ’round (cancel Telus before signing up for Rogers) you might lose your phone number into the ether…”

    I did just this with Telus and got smacked with a 100$ cancellation charge. The second you port your number from Telus, they say you have canceled your account.

    THEY claim one needs to port a number AFTER the contract is over to avoid such a fee! They completely slugged me and I’m currently fighting my charge. I ported my number about 5 days before my contract with Telus ended, called a CSR and asked her if this was the right thing to do to avoid a cancellation charge. She said yes and that I would get a normal last bill, but then 2 weeks later I get a notice of 100$ cancellation fee. I’m currently fighting this crap but just beware.

    My advice would be to call Telus BEFORE porting, get their statement in writing, or as a note on the account or logged on THEIR SIDE OF THE SYSTEM SOMEWHERE and see what they say you have to do, because they outright mislead me and dont believe they have to stand by what their own CSR’s say.

  21. AC says:

    Danielle, very sorry to hear about your trouble — but at least your number is safe, right?

    I’m no lawyer but I can’t see how Telus or any other carrier can possibly get away with charging for a government-mandated customer right. I would contact the CRTC and your MP’s office immediately, and whatever you do DON’T PAY THAT BILL!

    Please keep us up to date on this matter, as well… We’re all rooting for you!

  22. Jay says:

    Any thoughts on whether poor service from a
    carrier is a valid reason for breaking a
    contract? I know for a fact Mobility forces
    their suppliers into SLA’s. I am in situation
    where I have been a customer for 14 years and
    have finally had it. 18 months ago I verbally
    agreed to a three year plan based on a hardware
    credit. The handset is garbage and the voice
    system sporadically does not pass messages to my
    mail box so I do not receive voice mails in a
    timely manner. Any thoughts on strategies to
    break away?

  23. AC says:

    Hi Jay,

    While this post mainly concerns the Canadian carriers, I would think that at the very least you’d be eligible for a replacement handset. If the new one is just as bad maybe you could exchange it for a different model?

  24. Sean says:

    I have a friend that just returned from living in the Philippines for 2 years. His cell service cost him a whopping $6/mth all inclusive. I currently pay 10 times that amount with Rogers and average about 250 minutes/mth. Sigh!!

  25. Fred333 says:

    Great post. I never knew the carriers where like that. Thanks for finding that out.

  26. nobdoy says:

    I saw something in the news not too long ago that seems to indicate the government is getting ready to ban unlocked cell phones.

    That is, you won’t be able to buy or sell one in Canada if the legislation goes through.

    Sounds like a quid pro quo they gave to the current crop of thieves in return for their willingness to give up the $6.95 system access fee and accept other restrictions.

    So much for the idea that Canada is a free country. We have theoretical freedom (according to the Charter) but not economic freedom.

    I wanna know – who died and made the cell-phone providers king??

  27. AC says:

    One thing you can do to fight the System Access Fee is to sign Liberal MP David McGuinty’s petition for the Get Connected Fairly Act.

    As for a proposed ban on unlocked cell phones, could you provide some evidence of that? This is the first I’ve heard of it…

Comments are closed.