Analysis: Why the Koodo offer ($40/4gb) is more expensive & How Telus should respond moving forward

[Anabolic]

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:

1. Calculate a daily rate
2. Multiply the daily rate by 365 to get an annual rate
3. 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:

1. Honour the original $120/4gb agreement on PM indefinitely. No surprises.
2. Offer a plan at Koodo for no more than $40/ month
3. Offer at least 5gb / month of data
4. 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
5. Offer a credit to absorb the SIM cost and loss of prepaid add-ons from PM
6. 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.

[Vickel]

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@jamestneutronwrote:

Hey Rockdaddy22....when you pull up the offer on Koodo as you go thru the sign up steps....the $100 Credit say off your "first bill"....not $100 applied to your account....so my take on that would be if your bill is $40...that gets taken care of out of the $100...but the remaining $60 doesn't carry over. I could be wrong....does anyone have experience on Koodo Bill credits? Do they roll over until used up?

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I see this a $100 credit to your account on your first bill instead of third bill or $10 over 10 bills

[canucks4life]

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@jamestneutronwrote:

Hey Rockdaddy22....when you pull up the offer on Koodo as you go thru the sign up steps....the $100 Credit say off your "first bill"....not $100 applied to your account....so my take on that would be if your bill is $40...that gets taken care of out of the $100...but the remaining $60 doesn't carry over. I could be wrong....does anyone have experience on Koodo Bill credits? Do they roll over until used up?

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@jamestneutron Indeed any unused credit on account will rollover next bill.

[Jonavin]

Need to include call forwarding like PM has. I’m not paying $3 more for that out of the principle that it’s just a made up charge.

[Vickel]

Appreciate the work you put into this

I would consider the move for $40/5GB

[jamestneutron]

Hey Rockdaddy22....when you pull up the offer on Koodo as you go thru the sign up steps....the $100 Credit say off your "first bill"....not $100 applied to your account....so my take on that would be if your bill is $40...that gets taken care of out of the $100...but the remaining $60 doesn't carry over. I could be wrong....does anyone have experience on Koodo Bill credits? Do they roll over until used up?

[Rockdaddy22]

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@jamestneutronwrote:

When I pull up the offer on Koodo, it states that the $100 credit is "off your 1st bill", so unless you are planning to go roaming or calling long distance...for most of us that credit is really just worth $40. I would rather go monthly post paid to avoid my quarterly lump sum prepayment to PM, but there is something not sitting right with me on this offer. The call I got from the Koodo sales person trying to convince me to proceed with this offer, but couldn't answer me if I could qualify for the referral credit on top of the offer credits...other than saying probably...didn't fill me with much confidence.

The safety net that I like is on PM I cannot accidentally rack up a big bill  I only get what I've paid for....so no scam charges when I mistakenly pick up that call from the out of country area code.

Another thing....is for anyone trying to build up credit score...another credit check bumps it down again. 

I have just talked myself into staying where I am....until an better offer I can't refuse comes along! 

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I love PM too but I think you might be confused on your first point. If your first bill is only $40 then you’d have a $60 credit, that’s my understanding anyway. 

[jamestneutron]

When I pull up the offer on Koodo, it states that the $100 credit is "off your 1st bill", so unless you are planning to go roaming or calling long distance...for most of us that credit is really just worth $40. I would rather go monthly post paid to avoid my quarterly lump sum prepayment to PM, but there is something not sitting right with me on this offer. The call I got from the Koodo sales person trying to convince me to proceed with this offer, but couldn't answer me if I could qualify for the referral credit on top of the offer credits...other than saying probably...didn't fill me with much confidence.

The safety net that I like is on PM I cannot accidentally rack up a big bill  I only get what I've paid for....so no scam charges when I mistakenly pick up that call from the out of country area code.

Another thing....is for anyone trying to build up credit score...another credit check bumps it down again. 

I have just talked myself into staying where I am....until an better offer I can't refuse comes along! 

[mimmo]

great post.  and very accurate. and i don't see my self moving from PM any time soon. but   I don't recall seeing any intangibles mentioned

• talking to a live agent via chat face book or
• the fact you can go to a kiosk or a retailer to get support
• I think hardware upgrades were mentioned somewhere.  

also the fact there are probably  fewer quirks at koodo than at PM,

• for some a receipt might be needed
• activation issues auto renewal issue

the ability for credit building

just saying there is sometimes more than just $$$ to look at

[bbdata]

Great analysis.

[Clefort88]

This is a phenomenal post and I applaud you!
Thank you for the immense explanation and graphs. Outstanding.
I hope everyone considering switching keeps in mind the support structure here at PM and how truly wonderful the prices are for the quality of service.

[srlawren]

@koimr1 yeah tough one indeed.  For 4 days, Koodo would run you $28.  If you're not a heavy data user but still want talk and text while roaming, then the $20 for US Roaming Talk, Text, and 250MB data would cover you for $8 cheaper.  If you're a medium data user and still wanted talk and text, you could do the $15 US Roaming talk+text bundle and add the $10 US Roaming 250MB data for a total savings of $3 vs. Koodo.  But if you're a heavy data user and want talk and text, you'd be looking at the $15 US Roaming Talk+Text bundle plus the $20 1GB US Roaming data, which is $7 more than the trip would cost under Koodo.  Of course, if you don't care about at least one of those services (talk or text or data), then PM's rates are way more flexible and almost certainly cheaper on a 4 day trip.  On a related note, have fun--and Go Canucks Go!

I do probably three or four 1 or 2 night weekends away to Seattle a year myself, and a few day trips without an overnight.  For those, the $7 Easy Roam would be a great advantage.  In 2017 I had a couple of longer trips--5 days on a road trip to Portland, and 7 days to Manhattan, for which the 10 day packs were pretty good value (except I bought more data than I really needed) and Koodo would have cost more.  Soooooooo I dunno.  Tough call!  

[artekds]

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@Anabolicwrote:

1. Honour the original $120/4gb agreement on PM indefinitely. No surprises.
2. Offer a plan at Koodo for no more than $40/ month
3. Offer at least 5gb / month of data
4. 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
5. Offer a credit to absorb the SIM cost and loss of prepaid add-ons from PM
6. Migrate credit balances from PM to Koodo (those holding an "available balance" from applying PM vouchers)

Excellent analysis, for me even 4Gb/m is acceptable if Koodo allows banking unused data to carry forward for the next two months (ie mimic the three mo 12 gb cycle). 

[Rockdaddy22]

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@Anabolicwrote:

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@NDesaiwrote:

Why is everyone forgetting that Koodo plan includes Canada-wide talk and not just province-wide. Whenever PM launched a promo, i have seen people saying things like why no Canada-wide talk blah blah. Now, when it comes to this, no one cares that its Canada-wide talk. After all, having Canada-wide talk will always cost you more compare to only Province-wide talk. 

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There is an important difference. If we signed up for a province-wide plan to begin with then having Canada-wide calling was not a major concern. Even though telecom companies place higher-value on Canada-wide calling than province-wide, it adds no value to PM users who signed up for a province-wide plan and only call within their province. For the rare circumstances that users call outside their province they use VOIP services that allow free calls across US/Canada or a one-time prepaid add-on. You can't add Canada-wide calling to someone's plan and expect them to pay more for it when it is of little to no value to them.

Adding Canada-wide calling probably has more to do with the fact that all of Koodo's plans are Canada-wide. You can ask current PM customers, would you like to keep your current plan with PM but pay $5-$10 more per month for Canada-wide calling? The overwhelming majority will say no, otherwise they wouldn't have signed-up for province-wide plan in the first place.

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A lot of people would’ve taken canadawide calling if it was offered in the fall promo for an extra $15/90 days. 

[Anabolic]

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@canucks4lifewrote:

@Anabolic Nice graphs...from someone who accepted the Koodo offer monthly data technically is actually 4096MB.

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I based that off the plan on Koodo's website and a signed contract. It was unknown to me that usuable data is 4,096. I have updated the OP to reflect this. Thanks for the input.

[koimr1]

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@R47wrote:

I find Koodos roaming alot worse. To the US, it's $7 a day, and you can access your usual plan in the states, so on a 10 day trip that's $70. Whereas Public mobile, for 10 days, it's $8 for either unlimited talk or $8 for text, $15 for both, or $25 for talk, text and 250mb of data, or $30 for 1GB of data. If you just want roaming for simple communication and are ok using WiFi for internet, it's hard to beat $8 total for unlimited talk or $8 for unlimited texting. Even $25 for talk, text and a bit of data is almost 3 times less than Koodo would be. This is assuming a 10 day trip. If you're going on a shorter trip and using more data, Koodo may be cheaper. If you just need a ton of data, Koodo also might be cheaper. it really depends on how you're travelling and what you need your phone for. But for most people, I think Public is the better US roaming plan.

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Ugh, tough one. For me, most of my many US trips are just for the weekend so I've always felt the 10-day thing is overkill and never bothered plus where I am generally going doesn't have good cell service anyway (which is going to change in a couple months apparently as a cell tower is going in).

I'm somewhat lucky in that I have a Comcast account so I can use Xfinity Wifi in a lot of places so that definitely helps.

I'm going to Vegas this weekend to watch the Canucks lose play against the Golden Knights - it's only a four day trip so it's arguable in that situation if PM or Koodo's roaming would be better.

For a full ten day trip, or close to it, PM hands down.

C'mon EU roaming rules.... get over here....

[will13am]

@Anabolic, I commend you for providing such a comprehensive assessment.  I tried to develop an "equivalent" migration plan on the weekend.  Interestingly, we are in violent agreement.  My list of features is just like your list including 5 gigs of data.  The one thing I didn't consider is alternate migration plans options like $60/10 gigs to improve migration efficacy. 

Everything else being equal, if they demonstrate a willingness ensure long term plan stability, I would not be going anywhere.  After all, it was the disruption of this stability that led the current turmoil.  Hopefully we will see some signs of whether the future here is indeed friendly or not in the coming weeks.

[torontokris]

If you need Canada wide calling/roaming (voice), if you need a small tab for a phone then the Koodo offer maybe for you. 

Otherwise everyone should calculate what makes most sense for them

[Korth]

@canucks4life wrote:

Nice graphs...from someone who accepted the Koodo offer monthly data technically is actually 4096MB.

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 I noticed the same assumption that 1GB=1024MB on PM and 1GB=1000MB on Koodo.

I'd thought it might be based on fine-print contract details, but it's apparently just an error.

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@Anabolicwrote:

[R47]

Also another thing to look at is Koodo's US roaming. I have not yet but on my checklist to check out.

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I find Koodos roaming alot worse. To the US, it's $7 a day, and you can access your usual plan in the states, so on a 10 day trip that's $70. Whereas Public mobile, for 10 days, it's $8 for either unlimited talk or $8 for text, $15 for both, or $25 for talk, text and 250mb of data, or $30 for 1GB of data. If you just want roaming for simple communication and are ok using WiFi for internet, it's hard to beat $8 total for unlimited talk or $8 for unlimited texting. Even $25 for talk, text and a bit of data is almost 3 times less than Koodo would be. This is assuming a 10 day trip. If you're going on a shorter trip and using more data, Koodo may be cheaper. If you just need a ton of data, Koodo also might be cheaper. it really depends on how you're travelling and what you need your phone for. But for most people, I think Public is the better US roaming plan.

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[canucks4life]

@Anabolic Nice graphs...from someone who accepted the Koodo offer monthly data technically is actually 4096MB.

[Anabolic]

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@NDesaiwrote:

Why is everyone forgetting that Koodo plan includes Canada-wide talk and not just province-wide. Whenever PM launched a promo, i have seen people saying things like why no Canada-wide talk blah blah. Now, when it comes to this, no one cares that its Canada-wide talk. After all, having Canada-wide talk will always cost you more compare to only Province-wide talk. 

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There is an important difference. If we signed up for a province-wide plan to begin with then having Canada-wide calling was not a major concern. Even though telecom companies place higher-value on Canada-wide calling than province-wide, it adds no value to PM users who signed up for a province-wide plan and only call within their province. For the rare circumstances that users call outside their province they use VOIP services that allow free calls across US/Canada or a one-time prepaid add-on. You can't add Canada-wide calling to someone's plan and expect them to pay more for it when it is of little to no value to them.

Adding Canada-wide calling probably has more to do with the fact that all of Koodo's plans are Canada-wide. You can ask current PM customers, would you like to keep your current plan with PM but pay $5-$10 more per month for Canada-wide calling? The overwhelming majority will say no, otherwise they wouldn't have signed-up for province-wide plan in the first place.

[koimr1]

Weird, I can't edit my other message.

@Anabolic: Yes, I should've mentioned that my renewal date means the $100 credit is actually a bit of a bonus as my renewal date is Mar. 16 and not like the vast majority of other customers who just did so recently and stand to lose out. My apologies. 🙂

[koimr1]

@methyl: Good points, I knew someone would correct me, thanks! 🙂

Especially the SIM card, I completely forgot that.

I should've also mentioned that for me, being a Freedom refugee coming to PM when the promo was offered last summer, my next renewal date is actually March 16 so I'd be losing very little. Yes it's a MUCH bigger deal to the original promo customers though.

However, I'm still leery about the PM plan staying as it is now which makes a lot of this future-comparison problematic. Unfortunately there's a lot of speculation about what's going to happen, hopefully PM exercises that transparency and customer committment they touted and give us some kind of heads-up so we can stop speculating and make more informed choices.

[Anabolic]

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@koimr1wrote:

@Anabolic: Thank you for running the numbers and I have been doing similar computations on my own.

Two things:

1. I don't see the $100 credit figured in
2. I personally don't believe the PM plan will exist long enough to make it worth comparing to long-term

That $100 credit is a big one because, if you budget your cell bill over the year, it works out to $8.33 per month effectively bringing your monthly Koodo bill to $31.67 which is actually slightly lower than my main PM account which hovers around $32-33 depending on how much I've spammed the forums. 🙂

I have two other lines as well which only have AutoPay on them and both would also get the $100 credit which would make the Koodo offer even more attractive.

(I have also heard of some Koodo kiosks giving an additional $50 credit but as this is not part of the official offer I won't factor it in but perhaps something to keep in mind)

Of course, this is all based on PM changing the current plan within a year, something I do think will happen, and Koodo NOT changing the plan also within a year.

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I purposely left out the $100 credit for many reasons. The $100 was meant to offset the fact that we just prepaid for 90 days and would lose the majority of our prepayment, while also paying an additional $15 for a SIM, while also having lost prepaid add-ons. The net effect depends when your billing cycle is. Some people might have a net loss of $15-$20 and some might have a net gain of $15-$20. The difference is minimal.

The credit has no bearing on your monthly plan rate. You cannot take a one-time credit, calculate a monthly amount only for year 1, and say that's your rate in perpetuity. When conducting a long-term analysis one-time charges are ignored because they will never repeat themselves and will never alter future decisions.

[methyl]

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@NDesaiwrote:

Why is everyone forgetting that Koodo plan includes Canada-wide talk and not just province-wide. Whenever PM launched a promo, i have seen people saying things like why no Canada-wide talk blah blah. Now, when it comes to this, no one cares that its Canada-wide talk. After all, having Canada-wide talk will always cost you more compare to only Province-wide talk. 

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I think it's a small minority of people who actually consider it useful to have a Canada-wide talk because they either don't have anyone to call outside their own province or prefer to use other methods like calling through whatsapp/skype/voip. If I ever had to call someone outside the province I'd just pay 1c/min available from many online calling cards. So it's not worth even $1 extra value.  

[will13am]

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@NDesaiwrote:

Why is everyone forgetting that Koodo plan includes Canada-wide talk and not just province-wide. Whenever PM launched a promo, i have seen people saying things like why no Canada-wide talk blah blah. Now, when it comes to this, no one cares that its Canada-wide talk. After all, having Canada-wide talk will always cost you more compare to only Province-wide talk. 

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It is hard to put a dollar value on Canada wide calling.  It would depend on how much long distance calling a customer makes.  An assumption needs to be made on usage and each minute needs to be priced based on the add on pricing for long distance.  One other thing that was missed in the estimate was call forwarding.  The Public Mobile plan includes call forwarding, Koodo charges $3 for the feature.  Of course the true value of the feature depends on whether it is used or not.  I don't really use it and so the value is negligible.  Then there is access to hardware that needs to be considered for those who like carrier phones.  The migration plan at $40 will provides access to small tab.  I confirmed this with a real live person totally knowledgable with the migration offer.  This was looked up on the computer system using the right plan code.  Finally, how do you price a prepaid service with post paid?  Some people simply cannot qualify for post paid and some just don't want it even if they qualify.  When all these little things are taken into consideration, it can end up looking like an apples to oranges comparison.  I alluded to this in the big thread.  What I really like in this comparison is the suggestion of a different option, not just a like for like migration plan. 

[koimr1]

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@NDesaiwrote:

Why is everyone forgetting that Koodo plan includes Canada-wide talk and not just province-wide. Whenever PM launched a promo, i have seen people saying things like why no Canada-wide talk blah blah. Now, when it comes to this, no one cares that its Canada-wide talk. After all, having Canada-wide talk will always cost you more compare to only Province-wide talk. 

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Thanks for bringing it up. 🙂 I haven't forgotten about it myself, I just don't need it. I bought the add-on nearly nine months ago for both myself and the wife and it's still at 0/200 (me) and 44/200 (wifey).

But definitely yes - if someone is using Canada-wide often and constantly adding that addon then it also makes a difference and should be factored in.

Also another thing to look at is Koodo's US roaming. I have not yet but on my checklist to check out.

[NDesai]

Why is everyone forgetting that Koodo plan includes Canada-wide talk and not just province-wide. Whenever PM launched a promo, i have seen people saying things like why no Canada-wide talk blah blah. Now, when it comes to this, no one cares that its Canada-wide talk. After all, having Canada-wide talk will always cost you more compare to only Province-wide talk. 

[koimr1]

@Anabolic: Thank you for running the numbers and I have been doing similar computations on my own.

Two things:

1. I don't see the $100 credit figured in
2. I personally don't believe the PM plan will exist long enough to make it worth comparing to long-term

That $100 credit is a big one because, if you budget your cell bill over the year, it works out to $8.33 per month effectively bringing your monthly Koodo bill to $31.67 which is actually slightly lower than my main PM account which hovers around $32-33 depending on how much I've spammed the forums. 🙂

I have two other lines as well which only have AutoPay on them and both would also get the $100 credit which would make the Koodo offer even more attractive.

(I have also heard of some Koodo kiosks giving an additional $50 credit but as this is not part of the official offer I won't factor it in but perhaps something to keep in mind)

Of course, this is all based on PM changing the current plan within a year, something I do think will happen, and Koodo NOT changing the plan also within a year.

EDIT: I'm adding in that the bonus only really works for someone like myself who came over on the Freedom-only promo last summer. Our renewal dates are close the Mar 15 Koodo cutoff so the prepaid amount lost is minimal.

Also I forgot to add that as I budget yearly the bonus only works for the first Koodo year and that I didn't figure in the SIM card cost. Normally I don't consider that cost as I've generally pulled the "if you want me to sign up then give it to me for free" act when I'm able to get a cell plan in person which is what I'd do in this case - there's an actual Telus/Koodo store near me.

[ShadowWarrior]

Great analysis. They've been trying to contact me all day today and yesterday, but I won't change PM for anything unless they screw up.