The telecommunications industry in Canada is an illogical racket. There’s a pastiche of competition but really, to paraphrase Gertrude Stein, a Bell is a Rogers is a Telus. Telecommunications plans are notoriously expensive in Canada and they can be fraught with risk of huge additional expense if you don’t plan your use and keep a close eye on it. If a consumer wants to look out for her own interests and keep her costs down, she has to get smart and learn how to sidestep the pitfalls and take advantage of pricing loopholes. This post represents one recipe for hacking your phone bill in this spirit.
Why Hack Your Phone Bill?
There are a couple of good reasons to hack your phone bill.
First, it’s too expensive. The main expense on your bill is what I call a “voice and text channel” that you probably don’t really use. It makes a lot of sense to cut that out.
Second, your data plan requires you to commit up from to a “worst case” data use scenario. Then, if things go downhill from there, you get HAMMERED with extremely expensive data over-use charges. It makes a lot of sense to make your data use fees depend on what you actually use, and reduce the risk of incurring super-expensive over-use fees.
First Ingredient: An Unlocked Phone
The first important ingredient in the recipe is an unlocked phone. That doesn’t mean you have to spend $1000 on the latest cutting edge smartphone. There are plenty of great unlocked phones you can buy brand new for perfectly reasonable prices. Here’s a quick list of some decent unlocked, affordable phones you can buy at the time of this writing:
- Motorola Moto G (2nd Generation) for just $229.95 (from Staples)
- Motorola Moto X (2nd Generation) for $399.63 (from Staples)
- OnePlus 2 for $479
- Apple iPhone 5s for $599
- Google Nexus 6P for $699
It’s making more and more sense every day to buy your phone outright and unlocked from somewhere other than one of the big telecommunications providers. In fact, make sure you don’t buy your phone from one of those guys — they mark the devices up significantly.
No matter what you do, you should be using an unlocked device. With most carriers, subscribing to a “BYOP” (Bring Your Own Phone) plan will save you $20 right off the bat every month. (Note that Bell is the only carrier in Canada that won’t offer you this saving. See “Bell raises monthly share plan prices, eliminates BYOD benefits” on Mobile Syrup.)
Alternatively, don’t even use a phone. Instead, use a tablet, or even a notebook computer. This post recommends the use of an app that can be installed on pretty much any device. So you might not even need a phone, depending on how you like to communicate.
Second Ingredient: A Tablet Data Plan
The second absolutely key ingredient in this recipe is what’s generally referred to as the “tablet data plan”. That’s a plan that only some carriers offer. They are intended to be used only with tablets, not phones. But there’s nothing stopping the savvy customer like you from taking the SIM card with the tablet data plan on it out of your tablet and putting it in to your phone. It’ll still work, no problem.
The tablet data plan solves three problems that are inherent in traditional mobile phone plans:
- You pay just for the data you use, instead of over-paying up-front for data you may not use.
- You avoid the risk of incurring extremely expensive data over-use penalties.
- You don’t have to pay for a service that you may not use much: voice and text.
Only Pay for the Data You Use
With a traditional mobile phone plan you have to mitigate your risk of expense by making an educated guess in advance about the amount of data you might use in a month. For example, say I sign up for a plan with Telus that includes up to 7 GB of data. That’ll cost me $65 every month. What if I only use 1 GB of data in a month? Well, then I just paid $65 for 1 GB of data. Ouch.
Tablet data plans work on a sliding scale of use. They generally start at about $5 for a measly 10 MB of data. Here’s Telus’ rate schedule for its tablet-only Flex Data Plan:
As you can see, by using a tablet data plan, I’d right away save $40 on that 1 GB of data.
But the tablet data plan’s upper-limit threshold is generally 5 GB, as you can see above. What happens if I wanted to use that full 7 GB in a month?
This brings me to the next point…
Avoid Expensive Data Charges
Tablet data plans generally cover costs for data use up to a certain limit, or ceiling. In Telus’ case, on the rate schedule above, it’s “Up to 5 GB”. What’s data going to cost beyond that, though? The rate schedule reads, “+5¢/MB”. But what does that even mean? And why is the cost represented per MB all of a sudden when all of the other costs are represented per GB?
Simple explanation: it’s a dupe. Here’s a dirty little industry secret: when a carrier quotes data prices per MB, you know it’s crazy expensive. MB represents a relatively small unit of data measure compared to a GB. So quoting costs per MB is a way of reducing a consumer’s perception of a cost to its lowest possible level, regardless of what the total cost might be. It’s the equivalent of the telemarketer’s, “For a low monthly payment of…!”
Let’s convert those MB back to GB. There are 1,024 MB in a GB. So, 1024 x .05…
Whoa! 1 GB of extra data cost with Telus costs a whopping $51.20! That is an insanely expensive price for a GB of data, even by Canadian standards.
So if I swapped out Telus’ $65 monthly fee for 7 GB of data with a voice plan for 7 GB of data on a tablet data plan I’d end up paying $147.40 every month! That hurts. Tablet data plans don’t seem to make any sense all of a sudden.
Or maybe just Telus’ tablet data plan doesn’t make sense. Is data that expensive everywhere? Let’s find out…
Rogers has three separate tablet data plan price categories, compared to Telus’ one, which makes things a little more complicated. But for this discussion, I’ll draw your attention to the notes at the bottom of the left column, which is most comparable to Telus’ sole rate schedule. It reads: “$10/GB if usage is greater than 5GB”.
Wow. Telus will charge you $51.20 for the same thing! Rogers’ extra data-use fees are one-fifth of the price of Telus’ data. But the plot thickens. Check out the next two columns: the cost per GB goes down to $5 – one-tenth of Telus’ price!
So that 7 GB of data on Rogers’ low-end tablet data plan would cost me $60. That’s cheaper than Telus’ $65 fee for the same thing with a voice plan. But, again, if I didn’t use that much data in a month, I would pay less. If I used less than 5 GB of data, I’d only pay $40.
What about Bell? As usual, it is the most opaque carrier.
This price schedule seems very similar to Telus’, but with one very important difference. Remember how I said, if a carrier advertises data at a price per MB it’s going to be crazy expensive? Well, Bell doesn’t even disclose the fees that it charges for extra data on its web site (or they’re cleverly hidden, which is worse). So you can be pretty certain it’s going to be super insanely out-of-this-world crazy expensive. Bottom line: stay away from Bell. If a service provider doesn’t disclose a cost, that generally means you don’t want to pay it.
What about the carriers’ subsidiary discount brands? It’s a bit of a mixed bag here. Two of them, Koodo and Fido, don’t seem to offer tablet data plans. But the third, Virgin, offers a very attractive option:
And here’s the best bit:
Indeed, that is good to know. It’s a surprising dose of transparency from Bell’s little brother. Virgin’s extra data is twice the cost of Rogers’ cheapest, but still one-fifth of Telus’.
So, that 7 GB of data from Virgin? $60. (Again, compared to Telus’ $65.) If I use less than 5 GB, though, I’ll just pay $40. And if I have a really light month and can keep my data use under 1 GB, I’ll just pay $20. I’ll always pay $65 with Telus.
So you can begin to see how the pricing structure for tablet data plans makes sense: they can save you money, because they are based around real monthly use, rather than wild guesses in advance; and, if you pick the right one, you can reduce your risk of expensive data over-use fees.
But there’s one more cost-saving aspect of the tablet data plan…
Don’t Pay for What You Don’t Use
If you’re like me, the number of times you make a phone call every month has dwindled to almost imperceptible levels. Instead, I’m doing video calls on FaceTime or using Google Hangouts or Facebook Messenger to make voice calls.
Even if you do still make a lot of traditional phone calls, don’t you hate the way the carriers count your minutes? And doesn’t the concept of the “long distance” call that you have to pay extra for seem a tad anachronistic? And don’t their voice plans just seem really, really expensive? And why are you still paying extra for voice mail?
Bottom line: the carriers want you to keep ordering voice services from them because it’s an existing lucrative revenue stream for them that we perceive to have value. But that’s crazy. You can actually have your cake and eat it, too, with a tablet data plan. You can shave money off your phone bill but still keep your traditional phone line.
With your traditional mobile phone plan you pay for two “channels”.
That’s crazy. There’s no reason for this. The voice and text channel represents a significant expense on most mobile phone bills — at least $30. But, really, the voice and text channel on your mobile device is superfluous.
Because you can do this:
You’ve probably heard of something called VOIP. It stands for Voice over Internet Protocol. It’s a techy way of saying you’ll send and receive all your voice calls over the Internet using a special app, along with all your other data like web browsing and watching Netflix, instead of over a special channel just for voice. Your text messages can go that way, too, no problem.
You can still make normal phone calls using VOIP, and you’ll still have a regular phone number. Instead of paying for an extra channel for phone calls, though, you can save a huge portion of that money and everything will just get sent over the Internet. The only difference is that you’ll use a special VOIP app to make and receive phone calls instead of your phone’s native phone app.
There are a ton of VOIP app options for mobile phones. In this post I’m going to refer to just one: Line 2. No, they’re not sponsoring this post or anything like that. I actually pay for my service with them. I can just vouch for the quality of their service because I use it, and am most familiar with them. If you have a different VOIP service you prefer on your mobile device, it’ll work just as well.
So, to sum things up so far, you can save a ton of money off your phone bill by getting a SIM card with a tablet data plan for your unlocked mobile phone (or tablet, or computer) and using a VOIP app instead of your phone’s native phone app.
This makes even more sense when you consider that most VOIP services include every telephone feature imaginable at one flat rate that’s lower than the base price for services from the carriers.
Line2, for example, includes visual voicemail, unlimited texting, and unlimited long distance calling in Canada and the US for just $10 US per month (that’s about $14 Canadian these days).
You’d pay Bell $72 for that same level of service and you only get unlimited long distance calling in Canada. At Rogers you’d pay $55, but that doesn’t include voice mail or unlimited calling in even Canada. Telus will charge you $40 per month for a plan that includes unlimited calling only in Canada, but no voicemail.
And therein lies another benefit of simplicity: there’s one flat rate plan and it includes everything. There are no surprises. The plans from the carriers are designed to be as arcane and confusing as possible, in the spirit of wringing more money out of you with obscure extra fees.
One more bonus to the VOIP method: you can install your phone number on pretty much any device. So you can make and receive calls, text, and check your voicemail not only from your phone, but also your tablet and computer.
So hacking the voice and text channel off your phone bill will remove a significant cost even as it improves the level of service you receive.
By the way, my fellow northern Canadians will probably wonder if you can get a number from Line2 with an 867 area code. Yes, you can. You can also transfer your existing 867 number to Line2.
That’s a lot of information, so I cooked up some scenarios to try and give a real-world sensibility to it all. I’ve examined just two carriers here, though, Telus and Virgin, for purely self-serving reasons.
As of this writing, I’m a Telus customer and I’m looking at alternatives, so I’m using its information as a baseline. The only alternative I’m considering is Virgin because they offer a tablet data plan with reasonable data fees. Rogers isn’t available in northern Canada, so I unfortunately can’t consider it. Bell is generally comparable or slightly more expensive than Telus in all categories. Plus it has proven itself to be hostile to customers, so I’ve ruled it out for that reason alone.
To start, here’s a simple chart that presents four common cost scenarios.
So, to explain the chart above a little. This chart examines four scenarios, each of which include 1 GB of data from a service provider.
The first bar, “Full TELUS Service” represents the total monthly cost associated with subscribing to a plan that includes both the voice and text channel and the data channel. As you can see, it’s quite expensive.
The second bar, “Full Virgin Service” represents the same service as the first bar, but from Bell’s discount subsidiary, Virgin. There’s a $10 monthly cost saving here, just by moving away form one of the “big three”.
The final two bars represent services based on those tablet data plans combined with voice and text service from Line2. If you compare the “Full TELUS Service” scenario to the “Line 2 with TELUS Data”, you can see a cost savings of almost $26 each month just by switching to a tablet data plan. The “Line 2 with Virgin Data” is significantly cheaper than full service from Telus.
But let’s mix things up here a bit to really examine the benefits the the tablet data plan. What if you went over 1 GB of data in a month?
But we’re talking relatively light use in this scenario. What about a more average scenario, like if a person used around 5 GB of data every month?
Right off the bat, the combined Virgin tablet data plan with Line2 is $30 cheaper and includes 1 GB more data than a full Telus plan. Again, though, what happens when data use goes over by 1 GB?
Yeah, that’s not pretty on the Telus end of things. But what if things were even worse that month? Like, 4 GB over the limit?
This is where we really start to see the benefit of the pricing model behind the tablet data plan. On the far left, with a total of 8 GB data use in a month – 4 GB in plan, 4 GB in excess – on a traditional Telus mobile phone plan, you’re looking at a nearly $300 bill. But on the far right, with a total of 9 GB of data use on a Virgin tablet data plan, the bill is still under $100.
So there it is, my argument for hacking your mobile phone bill by using a combination of a tablet data plan and an unlocked device. There’s a lot of information here, but it’s not too complicated. I’ll provide a simple step-by-step here:
- Acquire an unlocked smartphone or tablet
- Purchase a Virgin SIM card with a tablet data plan
- Put the Virgin SIM card in your smartphone or tablet
- Install the Line2 app on your smartphone
- Subscribe to Line2
- Have your existing phone number ported to Line2
- Cancel your existing mobile phone plan
Now go forth and save money!
For Whitehorse residents, if you go into The Source and they tell you that you need to have a Virgin account for a minimum of 3 months before you can set up a tablet data plan, this isn’t accurate. Just ask to purchase a Virgin SIM card (it’ll cost you a whopping $5) and call Virgin directly at 1-888-999-2321. Speak to someone in sales and they’ll help you set up the SIM card with a tablet data plan no problem.