Rogers ends subsidized phone plans, now exclusively offers device financing

Toronto-based national telecom company Rogers has officially moved away from device subsidy plans and now only offers device financing to customers.

Previously, MobileSyrup obtained documents regarding the change, which was set to begin on January 28th. Rogers updated its website Tuesday morning accordingly. Now when browsing devices on the website, it no longer lists device subsidy options — formerly called ‘Edge Tabs.’

The change won’t affect customers on existing subsidy plans. Rogers noted in the documentation that it wouldn’t force customers onto financing plans when it made the switch and said that subsidized customers could remain on that plan until they wanted to upgrade their device.

Financing allows customers to pay off the full cost of the device in 24 equal monthly payments with $0 down and 0 percent interest. Rogers also lets customers combine it with their Upfront Edge program, which reduces the cost of the device if customers agree to return it to Rogers at the end of their contract or pay the difference to own it.

Fido is also slated to switch exclusively to financing, but won’t do so until February. Recently leaked documents detail how Rogers’ flanker brand will handle device financing.

Financing makes pricing more clear but may include sticker shock for many

The main argument for the switch to financing is that it makes things more clear for customers. With subsidized plans, the cost of the phone is built into the monthly service cost, making it more difficult for customers to see exactly where their money is going.

Further, with subsidized plans, the portion of the plan that covers the cost of the phone doesn’t go away after the two-year contract ends and the customer has paid off the device (depending on the carrier). With financing, it does. In other words, if you like your plan and you like your phone, when your contract ends, you can keep using both and pay less without having to call your carrier and switch plans.

But while the switch to financing is generally good for customers since it makes things easier to understand, it also comes with a level of sticker shock. Smartphones are expensive, especially in Canada where differences in the value of the dollar and the cost of shipping can increase prices. Plus, if you compare what a Canadian carrier sells an outright phone for against the manufacturers’ price, the carrier almost always charges more.

Financing lays all this bare to customers, which should help them make more informed decisions. What financing doesn’t do is magically make things cheaper. If anything, customers may see their monthly costs go up, but at the end of the contract, device financing customers will pay almost the same as subsidized customers.

For example, getting a 64GB iPhone 11 Pro with Rogers costs $58.96 per month in financing if you don’t get the Upfront Edge option. With the base $75 plan, customers pay $133.96 per month — $3,215.04 by the end of their contract, not including tax. With the same device and a subsidized version of the plan, customers would pay $115 per month plus $450 upfront for the phone. The works out to $2,760 in plan fees at the end of two years, plus the $450 for the phone upfront is $3,210 total after two years — $5 less than the financed amount.

Either way, customers will pay a bunch for a new phone. Financing just makes things more clear, and lets you pay less upfront.