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Reasonable BYOD incentives?

sheamus
Helpful Neighbour

How much do you need to save each month for BYOD to make sense?


D = (U+S)/N


where

😧 the monthly discount for BYOD to make contract cost same as non-BYOD.

U: the cost of unlocking the device

S: the subsidy/discount on the phone when buying on contract

N: the number of months you want to compare. Usually this will be 24, but use a different value if you wanted to compare the cost of walking away from contract in x-number of months.


For most devices Telus offers a device discount of $500. The unlock cost is $35. So:


D = (35+500)/25

D= $22.30


Thus if the monthly discount is less than $22.30, you will save money by signing a contract and getting discounted phone.


On older contracts Telus only offers 10% discount for BYOD. Assuming they will renew your old contract and give you a new phone, your monthly contract would have to be $220 or more to opt for the 10% BYOD discount.


On new contracts, Telus only offers $20 discount for BYOD. So it is close, but the $20 still isn't much of deal.


Of course there are other reason for buying a factory unlocked device. This post only considers $$$.

2 REPLIES 2

NFtoBC
Community Power User
Community Power User

Not sure why you include the unlock fee on one side of the equation, but not the other. As long as you plan to stay with Telus, there is no need to pay an unlock fee.


You also did not include the time value of money. Effectively, your monthly payment towards your device is reduced by the amount inflation increases (2 to 3% per year).

NFtoBC
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sheamus
Helpful Neighbour

Yeah TVM was getting a little rich. When I try to explain that to people, they look at me like I am from Mars.


I didn't include unlock fee because if I am going to buy a phone outright, I am going to get a factory unlocked one, not a sim-unlocked (unlocked by carrier). Should have mentioned that.