Many news headlines refer to the Fall 2016 promo as the "$40 for 4gb" plan, and Koodo has conveniently offered that amount, but this is simply not the case and never was. Since we pay in increments of 90 days, which is less than 3 months (91.25 days), we have to normalize the time to ensure that we are on the exact same timeline as Koodo. To do this we:
- Calculate a daily rate
- Multiply the daily rate by 365 to get an annual rate
- Divide the annual total by 12 to get the monthly rate
*This analysis assumes everyone takes advantage of the $2/mo autopay reward, but negates all other optional rewards (referrals/community).
Public Mobile is $37.51/mo for 4,153mb of data while Koodo is $40/mo for 4,096mb of data. It becomes quite clear that the Koodo plan is more expensive (13% over 5-years) and offers less data. It's quite obvious that it's not in our favour to switch to Koodo's plan. Koodo needs to offer an incentive for people to opt-out of the current plan; that is, they need to offer something better.
Considering that Telus was forcing a price increase it is quite clear that money is their motive. So, I don't believe it's realistic to switch to Koodo for less than we are paying. I think it would be fair to offer a plan that is priced at a maximum of what the original Fall Promo was ($120/90 days, or in Koodo terms $40/month). This would be fair because that was the original price that consumers agreed to pay when deciding to join PM. We know consumers have a willingness to spend $40/mo. This would at least stop the bleeding. In my 5-year chart the loyalty credits dwindle the plan down to a maximum of $33.46, but Telus is better off setting a floor price of $40.
I have also shown that offering a 4gb plan is less than what we currently receive, 4.153gb. Secondly, we currently have 12.2gb with flexibility spread over 90 days. Users take advatanage of many GB configurations:
- 3/4/5
- 3/3/6
- 2/4/6
- 2/2/8
To achieve a similar level of flexibilty Koodo needs to offer more data: 5gb per month.
I think Telus messed up by forcing an ultimatium to switch to Koodo or face an unruly price increase. There is an opportunity for Telus to migrate customers if they approach it in a fair, amicable manner:
- Honour the original $120/4gb agreement on PM indefinitely. No surprises.
- Offer a plan at Koodo for no more than $40/ month
- Offer at least 5gb / month of data
- Offer the promo for a duration near/including the end of a user's cycle, so they don't feel pressure to give up pre-payments
- Offer a credit to absorb the SIM cost and loss of prepaid add-ons from PM
- Migrate credit balances from PM to Koodo (those holding an "available balance" from applying PM vouchers)
The more incentive that Koodo offers for PM customers to voluntarily leave the easier it will be. Some current PM customers have expressed interest in moving to the previously offered $60/10gb plan. To mend consumer relationships Koodo can offer more choice by offering two plans that PM users can opt-in to. The plans should offer a better value proposition for consumers while also moving customers up the value-chain for Telus. This establishes a win-win partnership.
