Call Me Maybe: Why my $783 unlocked iPhone is a ringin’ deal

Most people would never pay $783 for a smartphone. I’m not most people.

After crunching the subsidized cell phone math and multiplying the mobile contract costs, I came to the conclusion that buying an unlocked iPhone 5 outright from Apple with zero ties to any contract-wielding carrier is a ringin’ deal.

unlocked cell phones

I am stunned by the savings. I’m also surprised more mobile users don’t skip subsidized cell phones altogether by doing a little number crunching to see if the price paid for long-term contracts makes that seemingly cheap cell phone a real deal.

What’s an unlocked phone? An unlocked cell phone is not tied to the carrier you bought it from and can be used with most mobile carriers anywhere in the world by swapping something called a SIM card. I explain this process below, so no worries.

prepaid cell phones

While the math uses the numbers from my situation — I’m a Canuck, I use data sparingly, I travel — I think the logic can be applied to your lifestyle, wherever and however you live.

Since this blog is about being a smarter, less spendy consumer, I’m going to walk you through my decision to spend a whopping $783 on a freaking smartphone. Your milage may vary.

1. Are you wanty or needy?

I have happily used my relic of a cell phone for the past 7 years, and I wrote about resisting the call of new phone technology in Do you really need that upgrade?

Do you really need that upgrade?

Shopping

Do you really need that upgrade?

Mobile phones are big upgrade targets, but any other widget or gadget is fair game too. Before pulling the trigger on that new device, maybe it's time to stop and think.

Read More »

While I’m awesome at delaying gratification, there comes a time when technology becomes unusable, deprecated, or broken. The world (and internet) have changed drastically since I starting using my 2006 candybar cell, and not being able to text friends, check my email, or do bloggy-related things online made my old phone a major liability.

The Computer Apocalypse: Three signs you need to upgrade

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The Computer Apocalypse: Three signs you need to upgrade

An easy-to-follow guide for upgrading your computer on a budget.

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iPhone, Android: So many smartphone choices!

So why choose a costly unlocked iPhone 5 16GB model over something less expensive, like the unlocked Google Nexus 4 16GB? Simple, I wanted an iPhone. :D

iphone 5

I love working in the Apple ecosystem, and spending more for an operating system, the applications, and hardware I prefer is worth it to me. This was also a budgeted spend, so I spent some time saving for the upgrade.

Bottom Line: My unlocked iPhone 5 16GB cost $699 + 12% tax = $782.88CDN. Before pulling the trigger on a shiny new smartphone, do yourself a solid by researching the features you can’t live without, the cost you can afford, and compare the options in the marketplace — you could save some money if a lesser model works for you. Tutorial: Which phone should you buy? | CNET.

2. With no costly contract, I can quit you!

I have a few reasons for being cell phone contract averse. First off, Canadians have the world’s longest mobile phone contracts — sign up for a subsidized phone with one of the big three carriers (Bell, Rogers, or Telus) and expect to be on the hook for three long years.

Need to move, lose your phone, or want to upgrade? Good luck! Contract termination fees can cost you hundreds, even if you’re staying with the same carrier.

Also, with so few carrier options, studies show that mobile service in Canada is overpriced and anti-competitive. Americans don’t have it cheap either. The most recent Open Technology Initiative (OTI) report compared cell phone prices and packages across the globe, and found US mobile customers pay the world’s second highest rate of $59.99 for a complete cell phone package. Canadians are the big losers in the mobile space, paying a chart topping $67.50 for voice, text, and data plans. Wheeee!

Comparing contract and prepaid options

Being dialed in and handcuffed to a contract and carrier was never my preference, but I still ran the numbers using the tools that have saved me money over the years — my brain and a spreadsheet.

prepaid cell phone plans

Mobile nerds can open my mobile cost comparison spreadsheet, but I’ll just tell everyone else the results. After comparing the cheapest cell plans offered by Rogers, Telus, and Bell, the numbers were so uncompetitive and similar that averaging a price with a subsidized iPhone 5 was so easy-peasy, it kinda made me queasy.

3-Year Contract Averages:

  • Average subsidized iPhone 5 16GB cost: $216.60
  • Average monthly bill: $55.53
  • Average contract length: 3 years

Total Contract Cost: $2,215.68

I then compared the monthly cost of going prepaid (aka Pay-As-You-Go) with PC Telecom and Koodo Mobile, a subsidiary of Telus with plans that let you carry-forward unused voice and data balances.

prepaid cell phone plans

After pricing out SIM cards, base plans, and calculating data needs, my preference went to Koodo Mobile for flexibility and a low $26.32 per month cost. The ability to save unused balances appeals to my squawky senses.

Bottom Line: After doing two basic mathematical calculations known as addition and multiplication, I came to the conclusion that opting for a prepaid plan could save me nearly $30 per month, or just over $1,000 in monthly fees over three years. Going prepaid with an unlocked phone also gives me the flexibility to swap SIMs and switch providers if a better deal comes to town. Tutorial: Step-by-step Guide: How to Save Money on Your Cell Phone Contract | Young and Thrifty.

Since I want you to get mobile and research your own scenario, use my free compare cell phone plans spreadsheet to help you calculate your total talkin’ and textin’ costs.

Spreadsheet: Compare cell phone plans to save money

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Spreadsheet: Compare cell phone plans to save money

Compare cell phone plans and save money with this easy-to-use spreadsheet.

Read More »

I’m into sharing the savings ’cause I’m cool like that.

3. Roam far from home, for far less.

Use your cell phone outside your local area or travel to another country, and you’ll likely get whacked in the wallet by crazy high roaming charges. Bell Canada issued this Canuck a $9,350 data roaming bill after his visit to Israel, but excessive smartphone roaming fees can happen during quick jaunts to neighbouring countries too.

It’s no shocker that Canada is known to have some of the world’s highest roaming rates. Americans may have greater choice in the mobile market, but there are cases where roaming Yankees got stuck with a $10,000 phone bill too. Heck, this Verizon customer racked up a $1,500 cell phone bill in 12 days thanks to a little travel. Not awesome.

Local SIM cards and unlocked phones can save you money.

There are a number of ways to beat roaming fees while traveling abroad — my favourite method is to buy a local SIM card for my unlocked phone and use that region’s cheapest prepaid phone plan while on the road.

prepaid sim card

A SIM card is a small, thumbnail-sized chip that stores your phone number and personal information. When your cell phone is not locked to a specific carrier, you can easily switch networks by swapping the SIM with one from a local service provider and avoid exorbitant roaming charges.

sim card

Bottom Line: It’s hard to calculate my total roaming savings at this early stage, but I think it’s fair to say that my $783 unlocked iPhone 5 can potentially save me hundreds, even thousands, in excessive roaming fees since I have the flexibility to pop my SIM and access any local network in the world. Tutorial: Stay in touch without racking up big wireless bills | Consumer Reports and Using Mobile Phones in Europe | Rick Steves.

4. Avoid ‘bill shock’.

So there’s this terrifying thing called bill shock. It happens when you unknowingly go over your plan’s voice or data limits and your provider charges you dearly for the overage, without warning. The shock part happens when a defibrillator is needed to revive your body after your brain realizes the financial impact of that massive cell phone bill.

no contract cell phone service

I have every reason to be terrified of bill shock, especially since Canadians have little protection and warning when they’re set to hit data limits. Heck, Canuck wireless providers question the need for ‘bill shock’ protection — this despite the Federal Communications Commission (FCC) putting pressure on mobile carriers to adopt ‘bill shock’ warnings for Americans back in 2011. Guess what? The FCC won.

By April 2013, more than 97% of American wireless customers will get automatic usage alerts when consumption of data, voice, text, and international charges approaches or exceeds plan limits.

I think Canadians should be grumbling. Now grumble louder.

Prepaid plans can protect against ‘bill shock’.

Prepaid phone plans are akin to fueling up your car at the gas station — you know exactly how much you’re paying up front, and you are given fair warning before the juice runs out.

So why do people balk at topping up a prepaid plan when they’re consuming more data? I love ‘paying as I’m going’ since I’ll never go over my limit, I find it easier to stay on budget, and those dang mobile carriers can’t zap me with bill shock.

The challenge is finding a competitive prepaid plan with a locked phone. Good luck with that.

Bottom Line: Paying the big bucks for an unlocked cell phone and opting for a prepaid plan can save you money by helping you to stick to a usage limit, capping spending, and avoiding the dreaded bill shock.

5. Unlocked smartphones have a high resale value.

Before dropping $783 on my brand new unlocked iPhone 5, I searched a slew of online classified sites to see if a used unlocked iPhone could be had for less. Wading through the used locked iPhones was a hassle, especially since most were being sold with a 2-year contract still attached!

After nearly laughing my a$$ off, I discovered that gently used unlocked smartphones are pretty decent at keeping a high resale value. I had no luck finding the phone I wanted though. Oh well!

Bottom Line: Selling an unlocked smartphone is far easier than one locked to a carrier. If you like upgrading your mobile gadgets often, choosing to pay more up front for an unlocked device could save you a bit of money since the resale value is decent.

So where am I going with this?

Most people would never pay $783 for an unlocked smartphone. But maybe more people should? After adding up contract costs, comparing unlocked and subsidized phone options, fearing bill shock, and popping SIMs to avoid roaming fees, I think maybe it’s time to rethink how we buy cell phones.

unlocked cell phones freedom

Given my cell situation I’m set to save a minimum of $480 over the next three years by paying $783 outright for my fancy unlocked iPhone 5. And these savings do not account for potential overages, roaming fees, and other gotchas an inflexible contract might cost.

How much would you have saved by ponying up the cash for that pricy cell before locking into a lengthy phone plan with a greedy service provider?

Maybe it’s time to do the math.

It’s your call.

Love,
Kerry

Your two cents:

  1. Kas March 2nd, 2013

    Good write-up and spreadsheet. If you don’t need the latest and greatest phone, and aren’t tied to Apple, there are some good options in the used unlocked smartphone market (Google Nexus phones). Also, if you’re coming off contract with one of the big 3 you might want to talk to your carrier about a monthly plan and BYOD (bring your own device) to use on the network. I negotiated a non-contract plan with Rogers for 1000 daytime minutes, unlimited evenings/weekends, VM/CID, unlimited messaging and 150MB of data for $35 per month. Finally, with such an expensive phone get the Apple Care option or the equivalent for new non-Apple phones.

  2. Breanna March 3rd, 2013

    Hi Kerry! Great tips and info on the unlocked approach to cell phone acquisition. Question. How would your cell phone use compare for calling and data? Just wondering if you think prepaid can satisfy all levels of use. How often do you have refuel? Thanks again!. I think you are super smart and so funny. A great read every time! Breanna

  3. We just wrote about the same thing! We spent even less on ours because we went with a refurb iPhone 3G, unlocked of course, and we found a great pay-as-you-go plan with 7-11 (of all places). Down with contracts!

  4. Christine March 3rd, 2013

    We have a basic cell that my son bought back in2009 after his father had a medical emergency and while he was in hospital our landline with Bell went down. It’s with Bell and they call him sometimes to try to get him on a contract…. Nope, not interested. He just keeps buying phone cards over at The Source to keep it topped up and away we go. As we have had some serious medical issues going lately I carry it to all appointments… Just in case…. I’m pretty sure Bell would love to have us on a plan but that ain’t going to happen……too bad, so sad Bell….. No idea what it has cost him in cards but the phone itself was $100.00 back in 2009…….. Works for us….

  5. Neil March 3rd, 2013

    Hi, with a prepaid phone, can you keep your cell number? In the states, it has to be transferred over from one company over to another to keep the number yours. If I do buy an unlocked phone, can I keep the number I have had for several years?

  6. shipcarpenter305 March 3rd, 2013

    I live in Miami and on a recent business trip to Montreal, I ignorantly wrote a few emails, texts and phone calls upon arrival when ATT shut me off @ $950.00. WTH!?! I was an assuming ignorant sucker and stupidly spent almost a $grand in an hour. Responding to a “Call Us Immediately #”, a sympathetic ATT rep retroactively sold me their Intl Data plan for $35/60 Gigs in lieu of my $950. An absolute no-brainer. Definitely ask your phone provider about International calling plans BEFORE you cross.

  7. Callie March 3rd, 2013

    So while you make great points i would just like to point out that if you are a person who cannot afford to buy your phone out right and you absolutely need one as you have no home phone the small companies are generally great for contracts. Sean and I were spending approximately $160 per month on our Bell plan and as Kerry pointed out that did not include key things like if Sean went over his Data amount and if I wanted to call my family across the country. Well we decided to buy out of Bell (while it cost a fortune we feel it was worth it). We then got Wind mobile, $40 per month and we have unlimited everything. Also if our phones are not paid off in 3 years they will just clear the tab and call it a loss. So instead of spending $160 per month between the 2 of us we spend $80 per month between the 2 of us. So if you have to go into contract then do your research and don’t go with the big companies.

  8. Bon March 3rd, 2013

    You have described something we Europeans have known about for years. I have never been on contract and always change SIMs as I change countries. Arrive at Heathrow airport and you will walk past vending machines selling prepaid SIM cards ready for use.
    I think one of the main reasons people go for contracts is so they spread the cost of the phone out over several years (even if it costs more in the end). They can’t spare the cash for the upfront cost of the phone. Speaking of which, why don’t you include the cost of the phone in the “Total at Start” column for prepaid plan/unlocked phone? You’ve included the subsidised phone cost in the contract section above it, but the upfront cost of the unlocked option is $800, not $5.60.
    Other valid reasons for going contract is it can be a better deal for heavy users (at least in the UK it can be), there is no risk of running out of credit, and the people like the experience (similar to you preferring the Apple ecosystem despite the higher cost).

  9. alyd March 3rd, 2013

    I’m not sure if you’re aware of this, but the US just passed a law that makes unlocking phones illegal. It was pushed through by the big providers (AT&T and Verizon) under something to do with copyrights. I’m still not sure how they managed to justify that one, but until it’s overturned, you could face huge fines for using an unlocked phone.

  10. Vanessa March 3rd, 2013

    Hey Kerry, I like your analysis but if I’m correct, your usage plans didn’t include data right? I came to a different conclusion when I calculated data (it’s something that’s not an option with me!). The way that contract-breaking is calculated has changed in the last few years and now the only amount that you have to repay is (percentage of your contract remaining) x (amount subsidized) which makes the decision to sign a contract or not dependent on what the user will do with the phone. For someone who stays in Canada and uses data, it’s probably wiser to sign a contract

  11. Claudia March 3rd, 2013

    Ouch, $783 is more than a month’s rent for me so I was startled to see your latest post.

    I’m still using my pay-as-you-go phone (got the phone for free during a 7/11 sale). Once a year, I have to buy more credits or whatever I have remaining expires instead of rolling over.

    On average, it works out to about $4 a month — some months I don’t use the phone at all so it costs me nothing, some months I rack up $10 — since I generally only use my cell when I’m meeting someone (in case one of use runs behind or gets lost) or for emergencies.

    One tip for people who feel they absolutely, positively have to have a smartphone: Find out what kind of plan your work phone is on. Depending on the plan and company policy, you might be allowed to use that for free after hours for personal calls.

  12. Claudia March 3rd, 2013

    Sorry, meant to add that it’s usually also much cheaper just to buy a pay-as-you-go phone at your destination when you travel for calls within that country, and just use the phone for emergency long-distance calls (and Skype for all other long-distance). In any case, as you mentioned, the nice thing about going prepaid is that you never have experience sticker shock!!

  13. Debi March 3rd, 2013

    Not much of a Canadian if you don’t own a BlackBerry.

  14. Kerry March 3rd, 2013

    @Breanna – It all depends on your usage, so always crunch the numbers and compare your options before committing. Many prepaid providers have packages and rates for heavier users. The nice thing with prepaid is you can customize things plans don’t often offer. For example, if you use almost no voice but want more data.

    @Neil – In Canada, it’s generally possible to port a number to a prepaid provider. Your best bet (in any country) is to contact the target carrier for instructions on how to move your digits.

    @alyd – The US law on unlocking phones only applies to phones bought locked from a carrier. You’ll still be able to buy unlocked phones from manufacturers like Apple or Google.

    @Vanessa – The calculation includes 100 minutes per month bought in blocks of 500 for $25, and 100MB data bought at 1GB for $35. Nice thing about Koodo prepaid is these blocks never expire, so you can carry them over to the next month.

  15. Alli March 3rd, 2013

    Stop… this is getting silly!!, and not in the funny way. In my opinion, the only reason for a fancy phone is so that WHEN on trips, you have access to maps, email, internet, your music, your videos, and a camera, with zoom apps already installed. And you’re Bible, guitar chords, games, emergency contact info, reservation info, medical and personal contacts and more all previously organized and easily available to you or those caring for or playing with you. Skype/ Facetime, too cool and almost free. Using a phone, when doing “out of the country” is silly, and again, not in the funny way.

    Or just stay home. Vonage is $20/month, worldwide, they say.

  16. Confused March 3rd, 2013

    Koodo prepaid yet pay monthly? I thought prepaid meant pay up front?

  17. Rene Francois March 3rd, 2013

    I use virgin data card in my iPhone use fongo to make unlimited phone calls in Canada and Skype elsewhere. Combining time on virgin cellular system and time on Wifi, my monthly bill never exceeded $6. 00 (yes I wrote six) a month

  18. Sara Jane March 3rd, 2013

    Hi!
    I also did the maths for a new cellphone earlier this year.
    I came to the conclusion that because I didn’t want a ”superphone” (S3, Iphone and such), it would have cost me more to pay for it in the long term.

    In Quebec, the termination fees cannot be more than the original price of the phone, decreasing per month.

    Since I bought a Galaxy Ace 2, priced at 200$, activated it on a good Canada-wide plan (25$!) and had a 100$ to buy the phone, it was a terrific deal!

    Also, the downside of prepaid (I’ve work for PC mobile and Bell prepaid), you don’t have ANY kind of negociation power.
    The employees are basically told to shut the line if you ask to do so. If you spend all you prepaid amount on data and ask for it to be reimbursed as you didn’t know, they’ll probably say no. And the plans are not as good as the promo plan on post-paid.

    I have calldisplay, voicemail, unlimited txt, 150 voice minutes and unlimited night and week-end starting at 5pm,canada-wide for as low at 25$

    The same on prepaid is at least 35$.

    But I know I lot of people who work great with prepaid. As long as you have basic needs, it’s perfect.

    Sorry for my grammar and syntax, I’m francophone.

  19. basil March 4th, 2013

    Kerry, monthly costs aside, it’s hard to consider a $800 phone a “deal.” I understand being committed to Apple, but why the latest and greatest when an older model, even new could be had for around $200?

  20. Racho March 4th, 2013

    I don’t see how this would be cheaper at least in my case…because with my plan it costs me about $600 (which keeps me under $2000 in 3 years) a year and I get a new phone every year with my upgrade that usually doesn’t cost anything to get (most I paid during upgrade time was $50). And I am a technology person so yeah I want the new phone every year not spending a crazy amount on one to hold on to forever because it cost so much.

  21. Kerry March 4th, 2013

    @Rancho My tally doesn’t account for roaming fees when I travel — HUNDREDS, maybe thousands in savings with an unlocked phone. If you don’t roam and you never go over your package, then that’s cool.

  22. Noal March 4th, 2013

    I worked this out myself after getting my first iPhone with a contract. I am not making huge savings but I enjoy the flexiblity of having an unlocked phone when I travel. I just pickup a local sim card which cost way less the paying roaming charges.

  23. Peter March 4th, 2013

    The other way to cover your a$$ (to use a Kerryism) is to buy a smartphone but don’t buy a data plan. Between home, work, school, yer local java hut, etc., you might only be out-of-range for an hour or so a day. There is more than enough wiFi out there to satisfy your roaming personality! Works great overseas, too.

  24. Cranios March 4th, 2013

    For the moment at least, unlocked cell phones are illegal in the States:

    http://consumerist.com/2013/03/04/white-house-agrees-that-cellphone-unlocking-should-be-legal-again/

  25. amhp March 4th, 2013

    If you don’t travel too extensively and have lower usage needs, I love my Ting refurbished LG Marquee that I bought for $47 (used a $40 coupon code that I found online.) I pay $15-25 dollars a month for their a-la-carte, no-contract, pay-as-you-go plan. To keep my data cost low, I connect to free wifi at work and other public spots and use my home wifi. They have service in some countries but not all–I see that they have service in Canada but I’m not sure if Canadians can sign up (I live in the US.) The phone is gorgeous and their customer service has been impressive.

  26. amhp March 4th, 2013

    Wondering if anyone has tried this $99 Freedom Pop sleeve thingy that claims to turn an IPod Touch into an iPhone?

  27. Kerry March 4th, 2013

    @Cranios Buying an unlocked cell phone is legal in the States and in Canada. BUT, unlocking a previously locked cell phone is the legal issue in the States.

  28. Trish March 4th, 2013

    I recently paid Telus $35 to unlock my iphone (they will do this for anyone who has been on contract for 3 months, I think) with the idea of swapping SIM cards while down in the US. Checked a few places and was referred to Walmart who, apparently, carry the widest range of prepaid phones. Walmart had nothing that would be compatible with an iphone and sent me to the Verizon store. There I was told two things: Apple does not want to be associated with any non-contract plan and that no supplier of iphones can legally sell an iphone compatible SIM card without a contract. Secondly, if I could somehow score a SIM card from another kind of phone and make it fit my iphone I would be able to use it to make phone calls but it would not give me access to all of the features that I have become accustomed to with my iphone (which is the reason I wanted to buy a SIM card in the first place instead of a cheap pre-paid phone). I ended up buying an US data/roaming/voice plan and went over (maps use a lot of data!)

  29. young March 4th, 2013

    Omg thanks for the mention! Fantastic post- I always wondered which was cheaper- thanks for doing the research and debunking the myth. I guess it’s like up front costs versus slowly-gauge-you-with-a-contract-so-you-feel-like-you’re-getting-a-deal-but-you’re-really-not!

    Lol :)

  30. Caesar F March 5th, 2013

    Wow such a big difference on the amount saved on getting a prepaid phone. When I need to get a new phone I will definitely look into this idea.

  31. Meghan March 5th, 2013

    We must have been seperated at birth. I went through the same exercise when I bought my first smartphone this summer. I think I bought an unlocked phone. I paid for it upfront at a discounted price because I put it on a 3 year plan with virgin. Not prepaid but only $20/m with optional data because the discount on the phone decreased the total price.

  32. Jennifer March 6th, 2013

    My husband and I both bought unlocked iPhone’s for our most recent phone purchases. I use the phone features of my phone very rarely and very little data too. Mostly I use the apps and it’s a very mobile computer around the house (where it uses my wi-fi network). I’m lucky that I have a desk job that doesn’t involve much travel at all, so the phone is really only in case of emergency when I’m out.

    When I set mine up, I went with Rogers because they were the only carrier to offer a prepaid $100 plan that wouldn’t expire for a year. I’ve been using this for several years now, and usually need to put more money on my account every 10 months or so. I love the fact that it’s so cheap and if my usage ever does go up, I can bring my phone to whichever company is going to have the best plan for how I use it.

  33. Todd Reashore March 6th, 2013

    Much thx Kerry, for the GREAT article !

    IMHO the Nexus 4 is the best smartphone phone for the money:

    https://play.google.com/store/devices/details?id=nexus_4_8gb&feature=microsite&hl=en

    Then find your pay as you go plan as you suggest.

    Cheers…Todd in Spruce Grove Alberta

  34. jim March 6th, 2013

    I agree with Kerry. I recently bought an unlocked Galaxy Note II for $650 from Amazon. If I had bought from AT&T it would have been $300 with 2yr contract. I mainly bought because I’m traveling more and wanted to be able to use local sim cards as mentioned. However, I also will save money. I switch from AT&T to Straight Talk from Walmart. I save $30/mo. the phone will be paid for by end of 2 years, but considering the $300 I would have paid if I stayed with AT&T, I will pay for the difference in less than a year, then all savings after that. Cool

  35. David Orr March 7th, 2013

    We are currently in a 3 year contract with Bell using a Samsung Galaxy Nexus. I’m seriously considering cancelling our contract and going with a pre-paid package but I’m not sure if the Nexus is unlocked or not.

    Any thoughts?

  36. HJ March 7th, 2013

    So, tell me again how $800 for a phone qualifies as frugal?

  37. Melinda Gonzalez March 8th, 2013

    Unlocked phones are illegal in the states? Holy Moly regulations are getting out of hand. I had no idea!

  38. Noel March 9th, 2013

    Great post Kerry! I did a similar calculation when purchasing a smartphone in late 2011.

    At times it can be tricky to work out the differences, as some carriers have short term promo plans as part of a longer contract, as well as “TABS” (i.e. subsidies that get paid off over time), and varying early cancellation fees. How long one plans to keep their phone is a big factor in the decision. My spreadsheet got fairly complicated! :)

    In general though, a subsidized phone over a 3-year term works out significantly more expensive for the customer and more profitable for the carrier. Not really a surprise… why else would the carriers be promoting it so heavily?

  39. David Orr March 9th, 2013

    As per my last comment re: Samsung Galaxy Nexus.

    From what I’ve found on other forums, all the Nexus phones are unlocked.

  40. Tiffany March 13th, 2013

    Thanks for the comparison research. I always knew contracts were taking advantage of you but it’s nice to see how you’re broken out the details! Thanks!

  41. KB March 17th, 2013

    Interesting. I’ve never looked at it this way, and certainly never did the math. Over time it looks like a nice savings. But there is something “comforting” for most people going with a contract with a big name carrier. Of course, most of the comfort goes to the carrier, with all the money they make. Next time we’re up for an upgrade (and with a wife and 2 kids with phones, that happens frequently) I’m going to check out this option, thanks for the idea :)

  42. Paul Kurucz March 20th, 2013

    I have been using an unlocked Google phone (Android) for nearly 3 years now and your math is bang on. I save money, can use my phone anywhere in the world with a local sim card, and I am free to switch carriers.

    I didn’t even have to buy the phone outright: Koodo gave me 2/3 of it on their tab. I pay off 10% per month, and if I choose to switch carriers, I pay off the rest. Pretty straightforward deal.

    We live in a have now, pay later society. What most people don’t realize when buying an unlocked phone outright is that the “long run” comes up on you really fast. Before you make your next phone decision: If you had bought that $783 unlocked phone 3 years ago, you would have saved $479.68 by now. What could you do with an extra $479.68 in your wallet right now?

  43. Scott March 21st, 2013

    Hey Kerry,

    Great article as usual. I’ve been a longtime fan of purchasing outright and being able to be more agile with the monthly fees that I pay.

    I think that this is a highly commented and discussed topic as there is such a wide range of personal needs in relation to mobile plans. For example, my wife and i each have a separate BlackBerry, mine is provided from my employer, and hers we are on a $56/month koodo no-contract monthly plan, which gives us unlimited canada wide calling, and 2gb of data, which fits with our lifestyle, and allowed us to get rid of our home phone some time ago.

    When i talk to other people that i work with, this plan doesn’t fit for them, same way a prepaid plan wouldn’t work for me.

    And for anyone who travels at all, vacation or otherwise, get your phone unlocked and do some research on the best local options available. Right now, I’m planning a uk trip, and a reseller called Giff Gaff is the best deal available for my needs. If you do travel with a smartphone, turn off your carrier radio unless you get a local SIM.

    I’m done rambling now ;)

  44. Stephen Rees June 3rd, 2013

    I have an unlocked Nokia. Which meant I could buy an unlimited talk, text and data plan from Mobilicity for $25 – plus the cost of their SIM card. I prepay for long distance and roaming, so I haven’t needed to buy more SIM cards – yet – but do not get one of those shocking bills either. Bad news is that Mobilicity got bought out by Telus. So much for competition in the Canadian market place. How long will my $25 a month no contract, no limit service last now?

  45. Derek June 3rd, 2013

    One thing to be careful of, which you didn’t mention:

    I have an unlocked phone, and put a Rogers SIM in it. It works for calling, but doesn’t receive calls – except from other Rogers customers!

    My warning is not about this technical issue; when I called Rogers to help figure out what the problem was, they flat out stated that THEY DO NOT PROVIDE SUPPORT FOR THEIR SIM IN UNLOCKED PHONES.

    So, be careful where you get your SIM.

  46. Carrie Le Blanc June 3rd, 2013

    Hi Kerry, what do you think of Ting?

    -Carrie :)

  47. Jerry June 3rd, 2013

    150mb of data is what you used in your spreadsheet? I use about a gb per month. Voice? I use mine for one call a month. It is all about data, and if your are a heavy data user your method does not work. Everyone pays crazy data rates to offset the subsidies the carriers pay to get people to buy smartphones and consume the data. The problem is that a heavy data plan is expensive and you might as well get the subsidy because if you don’t you are paying for expensive data without having the good side of the equation. Why pay for other people’s deals?

  48. alex June 3rd, 2013

    I totally did the same thing!! Except I bought my factory unlocked iPhone at a apple store in Hawaii (saved $100) on a 12 hours connection while waiting for my plane to fly home to Canada. And when I went to Koodoo one week ago they have this promotion that if you bring your own phone and buy a sim card you get 10% your monthly fee forever, well until you cancel I guess. So that was even more awesome!! Very happy so far!!! And no data plan for me, way too many coffee shop, fast food places and others offer free wifi.

  49. Sue June 3rd, 2013

    Nice sleuthing, Kerry!
    Telus wants me to believe that no way am I paying three times for my phone IF I sign a contract. I am only paying for what the phone is worth and they spread that price over the number of years the contract is signed up for. Cheeeeech.

  50. Sherry July 2nd, 2013

    Hey Kerry, why the iPhone 5 and not the 4 or 4S?

  51. Valerie July 29th, 2013

    When it was time for a new iPhone last year – I too decided to buy one unlocked! I’ve saved so much money. Last year I travelled to west Africa and also Thailand. I was able to buy local SIM cards and pay as you go data and voice – so cheap!! Only $1 for the SIM card in Ghana. Now I’m living in Panamá and never pay more than $20 a month for my voice AND data on my iPhone! Back in Canada my monthly bill was never less than $85 when I was on a contract. Never again.

  52. Raquel August 12th, 2013

    In my case, I always found it cheaper to go on a contract than prepaid. Just my personal opinion. I use my cellphone quite a lot, and do not use a land line. Lately, I have been using the maps/gps (as I just moved to suburbs from Toronto), and have been using some money-saving apps (Checkout51) while at the store, and my email when out and about. So, having data has been useful when there is no wifi connection (which I found that only McDonald’s, Starbucks or Tim Hortons to be the few places that I can connect to wifi).
    I have been with Rogers for a few years now, and every now and then I have asked for discounts. This spring, they allowed me to upgrade from my blackberry 9780 to an iphone 4s (while still under my 3 year contract) for free! I just had to send the phone back (which I paid $50 for 2 years ago), and the iphone was brand new (not refurbished) as it was sealed. I had to add data, since my plan before was a blackberry data add-on. They gave me an offer of adding 500 mb for $5 more or for another $5 for 1GB (or the same $5 for 6gb) so I took the 6GB offer, since I felt it to be the better deal. I did some research and many people have advised me that 500mb is not a lot on the 4s. My current plan is:
    -300 day time minutes
    -Unlimited after 6pm (free weekends)
    -Unlimited Network Calling (Rogers Home, Fido and Rogers customers) – which I use probably 2,000 minutes a month.
    -Caller Id, Voicemail, 2500 text messages
    -6GB of data
    all for $56.08, which includes 13% tax and the silly Government Regulatory Fee of $2.13 (in Ontario).
    I have thought about not having data, but I just personally feel that having a smartphone with no data defeats the purpose of having a smartphone.

  53. Passerby August 18th, 2013

    While this works for GSM phones (i.e. those with SIM cards) this isn’t as doable for CDMA phone (i.e. those without SIM cards). With CDMA phones you won’t be able to swap out a local SIM card while traveling to avoid international roaming charges. I don’t know what percentage of the Canadian smartphone market is GSM though, so it might be that you guys don’t have a choice as to what to buy.

  54. m September 1st, 2013

    Perhaps Telus has a habit of lying to me, but any time I’ve brought up the Sim situation in regards to swapping sims and bringing in unlocked phones. . .swapping sims ect, they have ALWAYS insisted that when you bring a phone to telus or any other Canadian provider your phone BECOMES locked to that carrier when it first sort of ‘sets up’. This would mean that even if you are feeling hacky – or are okay spending the $30+ every time you want to switch, your ‘unlocked phone’ is just as much of an annoying pain in the ass as the phone the carrier would sell you pre-locked to them.

  55. Chris Pollard January 18th, 2014

    Last year we had to deal with switching cell companies because of a buyout (DMTS->TBayTel). We went from a shared plan costing us $45/month for two lines to $95/month for essentially the same plan. DMTS never sold locked phones, so the ones we had carried over by swapping SIM cards. But we had just entered new two year contracts the previous summer. Those carried over … sort of.

    Last March, TBayTel launched a $50/month ‘unlimited’ plan. That’s unlimited local, unlimited Canada-wide long distance, unlimited long distance to the US, unlimited international texting, voice mail, caller ID, and 6GB of data. At this point I had already changed phones to the Nexus 4 (still a phenomenal phone – glad you mentioned it, appreciate you told us your reason for going with the three times more expensive iPhone!) – so I was still unlocked. But the contracts were still there. So I asked how much it would cost to buy out the contracts, knowing what it would have been through the old carrier. Turned out it was just $120/phone! So I did both buyouts, added the new plan to both phones, and am now fully unlocked and contract free for my wife and I. And since we now had ‘free’ (okay, ‘included’) long distance to the US, where my wife is from, we also removed the $25/month unlimited US long distance plan from our home phone line.

    Since we travel to the US several weeks every year, and have three unlocked phones, (I kept my previous Galaxy S2 when I bought the Nexus 4) we have options. I’ve gone the route of getting an AT&T prepaid SIM when we drove down to Texas a couple of years ago. Last year I tried out Roam Mobility when they did their free SIM swap promotion. Turned the expired AT&T SIM into a Roam Mobility SIM. Roam uses T-Mobile’s network, and admittedly the coverage is NOT as good as AT&T’s. But I can order up voice/data service through their website for a single day or multiple days, or a full month if I need it. Our last trip down, I signed up for service the days we were driving down, a couple of days we were taking side trips, and again the day we drove home. At $4/day, it cost about $20 to put the SIM in my old S2 and turn on the wifi hotspot in the car so we all had internet access. Our regular phones were on roaming, but we didn’t answer any calls, and our plan includes 100 free US roaming texts a month too. So we could still text from our regular cells. Worked out very well! And sure beats the $5/MB roaming data fees … and 70/80 cents/minute for roaming calls! Oh, and Roam includes unlimited calling/texting in the US AND back to Canada as well.

    But you can’t do this sort of thing with carrier locked phones. That’s why they lock ‘em!

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