Winnipeg Free Press - PRINT EDITION
How to make wireless providers fight for you so you can pay as little as possible
Maybe an iPhone 5 was under the tree. Or perhaps you're nearing the end of serving a three-year sentence -- contract -- with your current wireless provider.
In either case, keep in mind you have a lot of bargaining power when choosing which corporate partner you hook up with next.
"You're basically a free agent," says Andrew Cook of CompareCellular.com in Vancouver.
"Once your contract is up, you essentially become a month-to-month customer."
And the nation's top wireless providers will fall over themselves to get your business. In recent weeks, competition has become even more fierce with the entry of a fourth major wireless provider -- Bell -- in the province. Although MTS has more than half of the Manitoba market, Bell, Telus and Rogers are aggressively going after its customer base.
All four providers advertise multi-year contract plans that are competitively priced and offer 'free' or deeply discounted devices designed to pilfer customers from one another.
But the best deals aren't found on any website, Cook says.
"With plans, there are the advertised rates with add-ons, and then there are the unadvertised rates," says the spokesman for the website that compared wireless plans.
"The only way to get unadvertised is to be a new customer and ask for a better deal, or be an existing customer and tell them you are switching."
All wireless providers need to sign up new contracts -- for three years if possible -- to grow their profits. And they do so by luring away competitors' customers with the latest gadgets, such as the iPhone 5 and the Samsung Galaxy S III. In exchange for signing up for three years, customers receive deeply discounted prices on the phone -- free in some cases.
Cook says wireless providers make enough profit over-charging on services during three years to cover the cost of giving customers phones for next to nothing.
So when signing up, it makes a lot of sense to drive a hard bargain and know your opponent, he says.
In terms of market competition, the industry views customers in three categories -- aside from those who still have a lot of time left in their contracts. They're staying put awhile so they aren't in play, so to speak.
"Type 1," Cook says, are those with an expired contract or they're in the last 30 days of their contract.
"These people have all the power in the world," he says. "Your best bet is to phone your existing provider and tell them you are porting your number to another carrier, and then your existing provider should then start offering the unadvertised retention plan."
In the second category are those with six months or less remaining on their contract. At about the T-minus the six-month mark to your contract expiring, your wireless provider will start calling or emailing you -- almost incessantly.
"You still have some power to switch providers or receive an early upgrade from your current provider," he says.
It's best to be proactive.
The first step is to get in touch with your provider and ask what it offers. Usually, you'll need to get by the first line of defence -- customer care -- to reach the customer retention department, which can provide the best deals. And even then, it's a good idea to comparison shop. Some competitors will even offer credit if you to leave your provider early to sign up with them.
But Cook says your current wireless provider will make it painful for you to break a contract.
"They tend to charge quite a bit for you to cancel," he says. "It can be $200 even if you just have two months left."
Of course if you don't have a plan at all -- the third kind -- you've got just as much leverage as an existing customer with no contract or one that's ending, he says.
"The big takeaway is that providers care most about new activations," he says. "They are a big part of their financial statements and they really put the most effort behind acquiring new customers, so you don't want to just accept an advertised rate plan."
But timing is also important to get the best deals. Providers offer better plans at different times of the year.
"There are really three seasons for cellphones," he says.
The holiday season has traditionally been the busiest for providers. While competition is high, they're also traditionally flush with new sign-ups. They may offer good deals, but they may not be the best because their volume of new contracts is already high.
Cook says this is changing, especially because of the fall launches of the smartphone heavyweights: the Samsung Galaxy S III and the iPhone 5.
The new busy season for providers is the start of the school year, and while they tend to offer a lot of deals for students, pricing generally increases relative to the best time of year -- spring, a slow time for new contracts.
"This is the time when you will often see lower-cost six-gigabyte data plans offered so providers can sway people to switch to them, activate a new phone or upgrade," he says, adding the norm for data plans is between one and five gigabytes of data usage a month without additional charges in the $50 to $70 range.
"Once the school season comes and new phones get released, that's when those types of good plans disappear."
Competition should increase with the addition of new players such as Wind Mobile, which will drive down prices. But Cook says that will take a while because newcomers have to build their networks or strike out beyond major cities.
Wind, for instance, doesn't have its own cell-tower coverage in Winnipeg, Cook says.
"If you look at their coverage maps, there's a red line and within that are its unlimited zones, and outside that you have pay what's essentially a roaming fee," he says, adding Winnipeg falls outside the red line areas of its coverage.
For now, we're stuck with Bell, Telus, MTS and Rogers, he says.
At least they all find us attractive -- so long as we're available.
Republished from the Winnipeg Free Press print edition December 29, 2012 B12
Updated on Saturday, December 29, 2012 at 9:47 AM CST: changes headline, adds fact box
11:39 AM: removes reference to Rogers 4G LTE
January 3, 2013 at 10:19 AM: corrects information on cost of MTS contract
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