Understanding your first cell phone bill

The last conversation you had with your Canadian cell phone company was that you would be on a $40 monthly plan plus some other fees, so your expectation was that your bill would be around $50 – $55 max.  But what happened, you received your first bill and you nearly drop to the floor in surprise….a whopping $140. How is this possible on a $40 a month plan?

Well, let me explain, your first bill is almost always large because of three main reasons:

1. Activation fees: more often than not, there is a onetime activation fee, typically $35 that is added to your first bill (or sometimes charged at point of purchase)
2. Usage:  depending on when you activated and which bill cycle you are on, a month may past before your bill arrives and you will have to pay for one month of service say $40 + system fees 10 + any overage charges, say $5 =  $55
3. Advance billing:  carriers typically bill one month in advance, so you will be charged upfront for the next month’s plan and any system access fees (learn more about one carrier is doing with these fees)

Combining these fees together gives a large first month bill of $140 (see table below) well above the expected $40 plan first quoted.

There you have it, activation fees and billing in advance essentially doubles your regular monthly bill on your first bill.

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Introducing BlackBerry’s newest entry level device, the Blackberry Curve 8520 Smartphone.

Blackberry decided to offer an entry level quad band GSM smartphone and provide an update to the BlackBerry Curve 8310/8320 line. This device targets customers who are new to the smartphone world as well as those looking for an affordable device that can do most of the things other BlackBerries are known for. One of the down falls is the camera does not have a flash and there isn’t any GPS. Some users may find the lack of 3G support a bother , but it does have Wifi. There are dedictaed media keys, making it a lot simpler to navigate the web. The phone is light and has a nice soft feel in your hand. One of the things you will notice is the side keys have been changed from other BlackBerry devices, they are now intergrated into the side band, making the smartphone phone much sleeker. The trackpad touch navigation is a nice touch as well, making navigating throughout the 8520 easy. The Curve 8520 comes in two different colours; Black, of course, and Frost Blue.

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You are not alone.

Canadians pay more than Americans for wireless services. Only 65% of Canadians have a cell phone compared to the G8 average of 107%. (USA, France, Japan, UK) In fact, a quick scan of the world’s wireless landscape at the end of 2008 indicates that there are only two countries in the world (Ireland and Norway) that pay more than Canadians for cell phone usage. Canadians pay $60 per month on average while the G8 average is $40 and the world average sits around $25 dollars.

As a result Canadians do not readily adopt new services as quickly as their industrialized counterparts.

There are reasons why we are expected to pay more than some other countries. It costs more to set up the infrastructure across the second largest country in the world with a population density of 33 million versus 300 million south of the border. However, this does not explain why our monthly bills have been going up consistently over the last 5 years. Nor does it explain why we pay 50% more than the G8 average.

What’s timely is the likelihood of having new wireless providers coming into the market in 2010. While this is good for competition, how does a customer search for the best deal when there are over 20+ wireless brands in the marketplace and new players adding to this confusion with their own brands?

The fact of the matter is that Canadians have not had a voice in the wireless space. There are many confused and frustrated individuals who are looking for a better deal. There is a solution. myCELLmyTERMS.com promises to alleviate some of the pain by providing a free online service to all Canadians. myCELLmyTERMS empowers customers to negotiate their very own cellphone terms using a simple, guided and powerful online portal. They shop your proposal anonymously to an exclusive wireless dealer network who compete for your business.

myCELLmyTERMS provides you with a one stop shop for all your wireless deals, the latest devices whether they are smartphones like the iPhone, BlackBerry or Palm Pre and the best cell phone plans available. The best cell phone deal is what you – the customer chooses – not what is dictated by the “flavor of the month”.

Canadians finally have a voice in the wireless industry.

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Locked in by cell phone contract fees

Understanding contract cancellation fees in Canada

In Canada, many people sign contracts without being fully aware of the fees associated with ending that contract. These fees can be staggering, as high as $820 for TELUS, $600 for Bell and $500 for Rogers  if you are on a Smartphone contract and you cancel within the first year.

So, to shed some light on early cancellation fees or TLCs (Termination Liability Charges) here is the low down on these fees:

For Rogers here are the key items you need to know if you are going to cancel your contract early:

- There is a $20 per month fee for each month remaining on your contract to a max of $400, the minimum is $100, and this is called the  ECF or Early Cancellation Fee.

- If you purchased a Smartphone, however, you would be required to commit to a data term as well, and the data early cancellation fee (DECF) is $5 for every month remaining to a maximum of $100 or a minimum of $25.

- And to top it off 30 days’ notice is required for every cancellation, so be prepared for another 30 days charge on your phone bill.

Bell and TELUS also have similar terms in their TLCs:

• Both have the $20 per month fee for each remaining month on your contract, but TELUS has no maximum (so this can be as high a $720) while Bell has a maximum of $400.
• If you have a smartphone with TELUS then there is a $100 fee for cancelling within the first year of your contract, Bell has a “data Service Price Adjustment” charge of $200 for early cancellations of data devices like smartphones.
• Each one has a minimum of $100 to cancel your cell phone contracts

If you bought a smartphone on a 3 year contract and $45 monthly plan and would like to cancel your contract after 6 months of usage, then your cancellation charges will be:

• For TELUS:  30 months remaining x $20 = $600 + $100 (first year cancellation fee) + $45 (one month cancellation charge) = $745
• For Rogers:  that’s $400 (early termination charge) + $100 (data early cancellation fee) + $45 (one month of cancellation charges) = $545
• For Bell: $400 + $200 (data service price adjustment) + $45 = $645

It seems that the best time to cancel your contract is with 5 months remaining, since the minimum applies of $100 + $25 (if on a data plan with Rogers) = $125, providing that you give 30 days notice of course.  These fees are staggaring and ridiculous!

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