Following in the footsteps of its US counterparts, Rogers has unveiled a new annual smartphone upgrade program, aptly titled Rogers Next.
The prospect is tantalizing: pay $24.99 per month, starting at the time of upgrade, to be able, twelve months later, to upgrade your account without paying a cent. Of course, as is the case with many of these plans, the devil is you know where.
Starting in March, Rogers customers will be able to spend $24.99/month, or $300/year, to be able to walk into a store, trade in the phone you just bought (remember, the program only begins in March, and is only valid with new activations or upgrades — your existing device, with a current FlexTab, is not eligible) and walk out with a new high-end smartphone at no cost, provided its subsidized cost is under $250. Your remaining FlexTab balance, also known as the remaining subsidy, is waived, as are the up-front cost of the new phone and the $15 Connection Fee.
Of course, not all phones are under $250 — the Samsung Galaxy Note 3 debuted at $299, and the iPhone 5s 32GB and 64GB are $330 and $440 respectively with a 2-year term — so you’ll have to pay the difference.
On paper, this sounds like quite a deal, but there is one main stipulation glossed over in the Terms and Conditions: you must give back the phone you bought, up front, a year earlier, and it needs to be in good working order. This means you lose the opportunity to sell it later on once the 2-year contract ends; it means not giving it to a brother, mother or friend so they can get an accompanying $20/month discount on their plan for bringing their own device.
Rogers Next works best for the customer that would not otherwise bother to sell a phone halfway through a 2-year contract cycle, and doesn’t mind renewing a contract every 12 months. That customer not only loses the opportunity to sell a phone, but risks having to re-sign that contract with a potentially more-expensive price plan.
Let’s do a bit of Rogers Next math: go into a store and pay $230 for a 16GB iPhone 5s on a 2-year contract, signing up for a $100/month plan. There’s a $15 Connection Fee and the first of 12 $25/month Next subscription fees.
Twelve months later, you’ve got $245 left on your FlexTab which, because the iPhone 5s costs $720 on a month-to-month, began at $490. In addition to your $1200 in monthly plan fees, you’ve paid $300 towards the cost of a new phone through Rogers Next. You walk into a Rogers store with that in-good-working-order iPhone 5s, trade it in and get a brand new smartphone that would have cost $250 or less, for free. Your remaining $245 subsidy is forgiven, and the cost of the new phone, including the $15 Connection Fee, is free. And, according to Rogers, you don’t have to change your monthly plan as long as it meets the criteria “meets the premium subsidy requirement,” which is currently $60 minimum.
But say when you buy that iPhone 5s for $230 you don’t go with Rogers Next. After a year, you decide to get rid of the phone, which is in good working order, and get a new one, one that costs $250 on a subsidy. You pay off the remaining balance — remember, $245 remaining — and go into a Rogers store, pay $265 ($250 subsidy+$15 Connection Fee) and walk out with a new phone. You also have the original phone, which is still valuable, which you can choose to give to someone else, or sell it on the used market. Today, a used 16GB iPhone 5s sells for around $450 on Redflagdeals which negates the remaining $245 subsidy you just paid on top of the original $230 (which means, more or less, you spent $25 to rent a smartphone for a year).
With Rogers Next, you spend $300 over 12 months ($25/month) for the privilege of saving the remaining subsidy amount and up to $265 on a new phone ($245+$265=$510). Presumably, you’ll be able to get more total value by selling your existing phone after a year, paying off your remaining subsidy and upgrading to a new device, but that process is alien to most smartphone users. Many Rogers customers are smartphone enthusiasts who want the opportunity to upgrade, hassle-free, every year.
Perhaps the better deal is subscribing to the $30/month ($360/year) option, which includes Rogers Device Protection, an insurance policy that covers accidental damage, theft and loss. This normally costs $9.99/month, so Rogers Next becomes instantly more valuable when paired with the service.
Ultimately, Rogers Next is about convenience, and that may not be the goal of an average early adopter. With the implementation of the Wireless Code of Conduct, and the elimination of 3-year contracts as a result, Rogers is looking to recuperate some of that lost revenue by front-loading the entirety of a subscriber’s subsidy in the first year; think of Rogers Next as paying off the balance of a smartphone in one year, not two, and then getting the second year for free. Of course, if you choose not to renew your Rogers Next subscription in that second year, there’s still the remaining device balance to pay off — but who wants to think about that when you’re getting a free phone?