7-Eleven SpeakOut Wireless is one of the best pay as you go deals available in Canada. You pay $100 + tax and it is 20 cents a minute and 4 cents a text message incoming and outgoing. The airtime expires in 365 days. Here is the catch: they charge you 79 cent a month for 911 fees. The number of regular minutes that you have is slight lower than officially advertised. Here is how you would calculate the effective minutes: (125 – 12*.99)/.25 = 452 minutes a year. So it is slightly less than advertised 500 minutes a year. SpeakOut Wireless has one of the cheaper Canadian and US long distance rate of 16 cents a minute for this plan.
SpeakOut Wireless’ definition of long distance is different than other Canadian wireless carriers. If you are outside of your local calling area, all outgoing and incoming calls are considered long distance. However, SpeakOut Wireless’ local calling area is much larger than most Canadian wireless carriers. All numbers covered with the same area code is considered in the same local calling area. The entire southern Ontario with the area code of 519, 226, 416, 647, 905, and 289 is considered as one local calling area. SpeakOut Wireless’ local calling area and long distance policies are superior to its competitors in most cases. The local calling chart is available here. Canadian area code map can be found here.
7-Eleven SpeakOut Wireless’ Back to School promotion is 50% off any SpeakOut Wireless phone. 7-Eleven SpeakOut Wireless recently released the Nokia 5130 XpressMusic for $139.99. With the 50% discount, Nokia 5130 XpressMusic would cost $70, a decent deal for a mp3 phone with a basic camera. Rogers sells the same phone for $99.99. The bad part is that 7-Eleven SpeakOut Wireless’ Nokia 5130 XpressMusic is locked, which means you cannot use this phone in US, Europe, or Asia with a local SIM card. It might be eventually possible to unlock this phone in the future. An unlocked Nokia 5130 XpressMusic in Hong Kong costs $164.99 CAD (1180 HKD). So the Nokia 5130 XpressMusic seems to be competitively priced from 7-Eleven SpeakOut Wireless.
The first year cost of this solution is ($100 + 70$) * 1.13 = $192.10 (5% GST, 8% PST)
Medium Usage without Contract
Virgin Mobile Canada has a monthly prepaid plan that is pretty good with no contract. You pay $20 a month for 200 minutes and 10% bonus credit with automatic topup by credit card. So basically it is 10 cents a minute with an extra credit for add-ons. Prepaid monthly plans come with call display, voicemail, minutes tracker, and no contracts.
Virgin Mobile’s Back to School promotion is a $50 dollar activation credit for Prepaid Phones. The activation credit can be used for the add-ons in combination with 10% bonus top up credit. There are some basic mp3 phones from Virgin Mobile like Samsung R610 for $79.99, Samsung Link for $99.99, and LG Rumour2 for $129.99.
In the first year, there should be a total of $74 of additional credit on the account from $50 activation credit and $2 a month top up bonus credit. Additional credit on Virgin Mobile prepaid account can be used for add-ons. Add-ons can be found here.
The biggest downside to Virgin Mobile prepaid is that 30 cents a minute is charged for Canadian and US long distance.
The first year cost of this solution with the purchase of Samsung R610 is ($79.99 +$20*12)*1.13 = $361.59. (5% GST, 8% PST).
Medium to Heavy Usage with Contract
If you need a regular monthly plan that is more comprehensive, you should get a 2 year or 3 contract with one of the big names. When searching for a plan and a phone, ask if any promotional or epp plan is available. It is usually around $45 a month after add-ons and taxes. After a year or a year and half, you can call customer retention department and ask for a retention or loyalty plan, which offers two to three times the value of a regular plan at a slightly lower price for $30 to $35 including tax.
Bell, Rogers, and Telus have released their back to school student plans. Even though, these plans are better than retail plans, they are not as good as the retention plans or some epp plans.
$25 Plan Comparison
|Dividend Growth Investor||21.37%|
|The Wild Investor||8.28%|
|My Trader's Journal||-2.78%|
|Million Dollar Journey||-11.15%|
|The Financial Blogger||-16.31%|
$35 Plan Comparison
$50 Smartphone Comparison
Age group Number of people withdrawing Total $ Withdrawn Avg withdrawal $
under 20 930 $1,013,000 $1,089
20-24 29,270 $48,619,000 $1,661
25-29 89,630 $167,827,000 $1,872
30-34 205,570 $404,018,000 $1,965
35-39 264,540 $689,849,000 $2,608
40-44 260,920 $822,715,000 $3,153
45-49 256,870 $1,166,018,000 $4,539
50-54 213,440 $1,320,826,000 $6,188
55-59 201,860 $1,506,642,000 $7,464
Total = 1,523,030 Total = $6,127,527,000 $4,023
These student plans are very expensive and are not ideal unless the cost of a part of the plan can be waived. One way of saving money on retail plan is to only get the Call Display without Voicemail. Fido, Koodo, Virgin Mobile and Solo Mobile are slightly more competitively priced if some of the features listed above are not needed.
Some basic examples:
The annual cost of a $30 retention plan is $30*12*1.13 = $406.80.
The annual cost of a $55 smartphone retention plan is $55*12*1.13 = $745.80.
The annual cost of a $40 retail plan is $40*12*1.13 = $542.40.
The annual cost of a $75 smartphone retail plan is $75*12*1.13 = $1017.
These costs are estimations and do not include the subsidized cost of a phone or contract break up fees. In conclusion, cell phone contracts can be very expensive, but if landline fees (approximately $25 a month) can be saved, the real cost of cell phone portability is not as high as it seems. Cell phones plan need to be customized to the individual’s needs and circumstances. Last, but not not least, you should always ask if there are any promotions since the salespeople are instructed not to tell their customers about some of the special promotions unless asked.
Going Over the Border to the US
US roaming minutes from Canadian providers can be really expensive. Customer retention departments at Bell and Telus have been known to give out some decent US roaming solutions. Rogers and Fido do have some US roaming plans and there is a possibility that customer service or retentions can give a discount off the retail price.
Tmobile pay as you go is the best in the US if more minutes are needed. Tmobile uses GSM so it is compatible with unlocked GSM phones by using a Tmobile SIM card. Unfortunately, Rogers and Fido lock most of their phones. For Tmobile pay as you go, the airtime is $100 US + tax upfront and there are 1000 minutes a year. This is equivalent to $8.34 US + tax a month for 83 minutes a month. Your usage is very flexible and instead of minutes, you can use it on text messages. In the US, pay as you go does not charge long distance on top of regular minutes. So feel free to call from one state to another. The only limitation with Tmobile pay as you go is the $0.60 a minute to call from US to Canada.
The most popular and reliable phone card in Canada is CiCi. There are no connecting fees and customer service can be reached if needed. It comes in denominations as low as $5. It expires in 6 months.
The phone card I use is called Link Calling Card. It comes in $5 and $10 denominations. The exact cost per minute is not specified and customer service cannot be reached from personal experience. However, I find that Link Calling Card provides at least twice as many minutes as a CiCi card if not more in some cases. Link Calling Card expires in 8 weeks. For people who use their phone cards often, I recommend trying $5 Link Calling Card if possible. Link Calling Card is available at many convenience stores.
The Canadian cell phone costs are higher than most developed countries. 7 Eleven SpeakOut Wireless is a decent solution for people with light usage and Virgin Mobile Monthly Prepaid is a decent solution for people with medium usage. Retention plans are the ultimate goal for people with high usage or data needs. Find the plan that fits your needs and read the contract carefully before signing anything.
Want to learn more about RESPs? Buy The Book:
The RESP Book: The Simple Guide to Registered Education Savings Plans
Everything you need to know about RESPs.