May 1, 2014 4:52pm
There’s no couching it: the amount consumers can save by bringing their own device to one of Canada’s Big Three carriers is decreasing. A week ago, we reported that Rogers had increased the monthly cost of BYOD, or buying a phone outright and activating it on a carrier’s service, to $50, an overnight increase of $10.
Now we’re reporting that Bell has done the same, though not quite as dramatically, increasing the monthly BYOD cost to $45 from $40. The cost savings over buying a new device on subsidy used to be $20/month, or $480 over two years, which is generally how much a carrier subsidizes a new high-end smartphone over the same period. Now, the equivalent savings is $15/month, or $360 over two years, making it much less attractive to buy a new device outright and bring it to Bell.
A potential reason for this change is to make the Lite device category more attractive, as many of them are already free on a 2-year term and, with a $50/month price tag, cost significantly less over two years than their Plus device counterparts. With a $45/month price tag, BYOD is still a better deal than buying a Lite device on contract, but it’s no longer a great deal.
From a business perspective, these changes make sense. Bell, Rogers and TELUS want you to buy a phone from them on a 2-year plan: that’s not only guaranteed revenue for 24 months, but a higher blended ARPU, or average revenue per user, which is often used as a gauge for the health of the company’s wireless business.
That Bell responded to Rogers’ BYOD increase with a number half as much is interesting, and is the first time since the wider implementation of share plans that the carriers have differed this much on pricing.
TELUS has yet to respond with a similar increase, but you can be sure the current $40/month BYOD price is not long for this world.
Image credit: National Post