So you think $0 means free?

Free cell phone

Those advertising for $0 cell phones are everywhere around us, but be careful, $0 is not free. You pay for it every month during your agreement.

A 2 year agreement with a wireless carrier is based on the purchase of the phone. So when you sign your contract read the page regarding the phone, you will find the proof of purchase and its real price. For example, you get a LG Style with Fido right now on a contract, on the contract you will see the full price of the mobile phone $300, and the economy you make: $300.

The benefit exists the moment you buy the phone, but a portion of your monthly fees is used to pay your tab-24. Every month the tab reduces. To find out the fees for your phone every month : the full price of the phone / 24. Those fees are what the mobile carriers call the subsidy.
All the carriers have to respect rules made by the CRTC.

If a rep from a carrier tells you the cellphone is free, it is a lie. Is a $0 phone really cost efficient? Every year, manufacturers launch a new phone and during that year the prices decrease. Though, your tab does not follow that drop. Sometimes, there are only a few weeks between the purchase and the drop in the price. So if you want a new phone before the end of your contract, you would need to buy out your current contract (subsidy) and the initial price of the phone ($0 or discounted price), the total amount can be higher than a new phone sometimes.

Last but not least, at the end of your contract, call your carrier to check how you can reduce your monthly fees as you don’t have to pay your 24 Tab any longer and switch to a “bring you own device” (BYOD) plan.

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