Rogers device subsidies 101: Choose the option that’s right for you

Our friends in legal have asked us to make some edits to this post. In the spirit of transparency, we wanted to let you know that the following text has been changed from when it was originally published. The primary fix is that we’ve re-written to clarify that all customers have a contract with Rogers, even when they choose a no-term, no cancellation fee option.

We know that some of you have had questions about fixed term wireless contracts and why they exist.  What you may not know is that Rogers offers you choices, even when it comes to contracts. You can always be without a fixed term contract with Rogers if you choose to pay full price for your device upfront and pay for your services month-to-month.

Why do I need a fixed term contract?

When you enter into a contract, you receive a device or service at a reduced cost. The benefit of signing up for a 1, 2 or 3-year term is the upfront savings you get on the wireless device you want.

Wireless devices can cost hundreds of dollars depending on the model.   You can choose to skip the fixed term contract and buy your device at full price, but sometimes, getting a break on the cost of that new quick messaging device, smartphone, tablet or RocketStick makes more sense and is easier on your wallet than paying for it outright.

What if I want out of my fixed term contract? What fees apply

We often get questions about cancellation fees and why they exist.  As part of our ongoing commitment to our customers, we’ve implemented a new policy around what happens when customers with a fixed term choose to end their fixed term early.

Here’s the new policy:

  • If you received a device subsidy when you signed up, and you want to cancel your service before the end of your fixed term, you will need to pay the Device Savings Recovery Fee (DSRF), which is based on your device subsidy.
  • You can find the amount of your device subsidy (economic inducement) in your agreement. To calculate the DSRF, just divide the subsidy you received on your device by the length of your contract in months , multiply that number by the months left in your fixed term contract and of course, add applicable taxes.
  • Did you get a bigger subsidy when you signed up because you have a data plan? Rogers offers additional subsidies to customers who sign up for both voice and data plans.
  • The Additional Device Savings Recovery Fee (ADSRF) is charged to subscribers with data plans who cancel prior to the end of their term. You can also find the amount of your data plan subsidy (additional economic inducement) in your agreement.
  • This is calculated the same way as the DSRF, taking into account the months left in your fixed term contract and the initial subsidy provided to you.
  • The one-time service deactivation fee is $12.50 per line and charged to all term customers in provinces other than Quebec and Manitoba if they choose to cancel their services before the end of their fixed term. This fee helps to cover the administrative costs and charges associated with your cancellation.

It’s always important to understand what you’re paying for, which is why we’re trying to make it easier for customers to understand our device subsidies.

Heather is a regular contributor to RedBoard

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Rogers device subsidies 101: Choose the option that’s right for you , 1.6 out of 5 based on 68 ratings
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  1. But what about us early adopters that switch and upgrade devices at full price regardless of price or contract! Why isn’t there subsidies or special consideration for us who don’t care about the contracts or cost of the device!?

    • RogersNicolas says: January 24th, 2012 a 8:03pm

      Hi Matt, we definitely care about early adopters as much as other customers. I’ll share your feedback on my end. Thank you for reaching out!

  2. No mention of carrier locks? I’ll take my iPhone unlocked, with no subsidies, direct from Apple. Thanks but no thanks to carrier locks (entirely out of principle).

  3. Daniel Sarfati says: January 24th, 2012 a 4:12pm

    I’d like to thank Rogers for giving me the freedom to be in full control of my wireless needs. Although Rogers does have some of the best devices out there, I personally opted to purchase a device from a different carrier (obviously outright) since the device I wanted has an exclusivity deal…

    If this had been in place when I was going through all of this, it would have made my life a lot smoother, since at the time the only way to get the best rates was with the 3 year contract. I am planning to sit out the rest of my contract and afterwards going contract-free and purchasing my devices outright.

    Thank you Rogers for listening to what your customers want, I’m sure this option isn’t what most customers would choose, this is definitly what I have been asking for from the “big 3″ wireless companies, and you guys sure delivered!

    Just one question, does this new policy govern existing contracts, such as the one I signed in Dec 2010? Thanks!

    • RogersNicolas says: January 24th, 2012 a 5:26pm

      HI Daniel,
      Thanks for your feedback. Existing customers are covered by the former ECF model under the provisions of their existing contracts. However, if you enter into a new term, you will be subject to this new policy.

      • Hi Nicolas,

        I was an existing Rogers customer that had 19 months left on my contract with no subsidized device purchased at the start of the contract.

        I entered into a new two-year contract today and still did not buy a subsidized device.

        Going by the new policy which apply to me now, my cancelation fee will be $12.50 in total is that right?

        Nobody at any of the Rogers Authroized Retail store is willing to speak to me about this (Metrotown store in Burnaby, BC, fyi).

        Could you please confirm this for me?

        Thank you very much.

        • Can you please confirm to Richard’s question above? I am in the same boat. Thanks,

        • RogersNicolas says: January 27th, 2012 a 12:41pm

          Hi Richard,

          For all account related related questions, you’ll have to call Customer Care. They’ll be able to give you the most accurate answer based on you account details.

          • Hi Nicolas,

            I followed your advice and spoke to customer service. The call lasted a total of 41 minutes while I got passed around different department and none of them gave me the same answer.

            At first I was told that the new policy only applied to voice and not data, or vice versa, and after informing her that the Rogers website specifically laid out the policy for Voice and Data plans the lady forwarded me to the cancellation department.

            At here I spoke to Anita and was quoted $102.50. A number which made absolutely no sense to me according to the policy laid out above. I informed her as I have not purchased a subsidized phone, my economic inducement should be zero, and her reply was simply that regardless I will receive a cancellation fee of $102.50.

            I am very frustrated. Please clarify this for me as I do not feel speaking to customer care is fruitful at this point. If this is beyond your jurisdiction please help me identify the lady I spoke with or the case number for that call. It was made yesterday Jan 26th at 3:07pm Pacific Time and lasted for a total of 41mins 48secs.

            Thank you very much for your help, I have received very frustrating treatment from both in-store reps and customer care by phone, you guys are my last resort.

        • Assuming Rogers never gave you subsidized price on hardwear…should be the case. :)

  4. This is a very good step on Rogers part.

    Does this apply to all contracts or only new ones? If only to new agreements, do the old terms apply to the old contracts?

    • RogersNicolas says: January 24th, 2012 a 8:05pm

      Hi Vito,

      The new fee structure applies to new customers and existing customers who enter a new term after January 22, 2012. Customers with existing terms will not be affected by the changes until they enter a new term.

  5. Hi Heather!

    How about you give us all an example that’s more realistic, because reading all this mumbo jumbo makes my head spin with amazement.

    How about we take the newly released Samsung Galaxy Nexus which can be had for $99.99 with a 3-year contract. And given that it’s outright purchase price is $599.99.

    Go!

    • Hi Puleen,

      If the inducement is $500, and you signed on for 3-years, and wanted to end your existing agreement, then it would be $13.89 X number of months remaining in your contract, plus the $12.50 Service Deactivation Fee + taxes (if outside Quebec or Manitoba). If you wanted to cancel after one year, based on my calculations you’d be paying $333.36 + the $12.50 (plus tax).

      Hope that helps!

  6. This is NOT cheaper and penalizes customers looking to cancel EARLY into their contract. Another reason why Rogers is not interested in customer satisfaction and only in the bottom line. Enough with the PR spins. Tell it how it is.

    • They are charging you the same price as if you bought the device outright (pro-rated in YOUR favour), plus a very small fee. By subsidizing your purchase, they are essentially paying for the phone up front for you. The $12.50 fee is almost nothing against the cost of the device (less then 2% over 3 years). Say you decide to buy the phone outright and put it on a credit card, you’re looking at 20% even if you miss 1 payment.

      This is a huge step forward for the consumer. You get a substantial discount in return for a commitment to use their service. If you want to leave, just pay for the device and go elsewhere. Why do so many people feel that they should get everything for nothing?

    • how is it not cheaper? you will never pay more than the discount you got on the phone? maybe you need to read it a little closer.

    • This is actually a step in the right direction. All the wireless providers were forced in this direction in Quebec and more recently in Manitoba due to a change in legislation. Rogers has taken the step and applied the rules across the board for the rest of the nation.

      We as customers win. If you sign a contract and cancel early you will never have to pay more than it would have cost to buy the phone outright. The previous cancellation policy was unfair and cost consumers much more to cancel early.

  7. Wow…..some really creative people work at Rogers!!!!! let me know if you need more Acronyms to get money out of peoples pockets…. :)

  8. Could you please explain how the Device Savings Recovery Fee and Additional Device Savings Recovery Fee is allocated between voice and data.
    Device discount = A * DSRF + B * ADSRF
    A = percentage of device discount due voice
    B= percentage of discount due to data
    What is “A” and “B”?

    • Hi Danny, the DSRF and ADSRF will be specifically laid out in dollars in your contract, which will allow you to do those calculations.

  9. At least Rogers will unlock your phone when your off contract. No other carriers will. Mind you it costs 50.00 but at least it is an option.

  10. What if you get a new plan without getting a new phone.

    Example: Switch to a retention plan and they force you to renew. What’s the cancellation fee then? Based on the new contract or based on 36 months from the original point of sale? What if you signed a 12 month term and then renewed into a 36 month term?

    • When you enter into a new term or renew your term after January 22, you’ll be covered under the new policy.

      • Perhaps what I was saying isn’t quite understood.

        Let’s use numbers in example:

        I buy a google galaxy nexus today from Rogers for $99.99 on a 3 year term. I get a $500 subsidy discount.

        A year from now, I change my plan and get my contract renewed for 3 years.

        I cancel my plan from Rogers a year later from that.

        What do I pay?

        Or.

        I bought an iphone 4 August 1st, 2010 on a 3 year Voice and Data plan. I changed my plan today and get renewed for a 3 year term without taking another device.
        I request to cancel my plan the next day. What do I pay?

  11. The “buying a car” analogy is a little disingenuous. Imagine a world where if you leased a car, you paid, say, $250 per month, and if you decided to buy the same car, it cost you $20,000, but you still had to pay the $250 per month. Ridiculous, right? Well, that’s the way your contracts work.

    Why, if I decided to buy my phone outright, would I not pay less money per month on my wireless bill?

    • Customers who decide to take advantage of a device subsidy and sign a term contract pay back their original subsidy over the course of their term through a commitment to monthly service fees. That’s why no term customers don’t have to pay cancellation fees if they choose to end their term early. Not signing a term won’t reduce your monthly bills, but it does mean you don’t need to worry about cancellation fees.

      • This comment irks me, I’m sorry.

        So if I take a phone, part of the bill I’m paying goes towards covering the subsidy that you provided me to get the phone in the first place, so If my plan is 60.00 bucks and you take 15 for subsidy really all that’s left is 45. Now, If I buy my phone why would the price be the same since you’re not subsidizing anything???? It doesn’t make sense. You telling me that the advantage is that there isn’t a cancellation fee is an insult to my intelligence.

        If I don’t need your subsidy, why should I pay the same price as someone who needs your subsidy. I’ll go a step further, instead of 12.50 make it 20.00 bucks for all I care so that way you guys make something out of the fact that essentially you’re providing me credit to purchase a phone.

        Like many things, it doesn’t make sense, like the 35.00 activation fee we pay to switch sim cards from one phone to another, it does’ t make sense, like the 1.45 a minute we pay for roaming in the states, or the fact that in the year 2012 Rogers customers still pay for Call Display and Voicemail.

        Rogers, your service is good, I admit it, but sometimes I think your policies and pricing schemes were written by Dan Brown the same guy who wrote the Da Vinci Code since there are so many intricasies involved every time you update your contracts.

        Chris I’m sure you’re a nice guy and nothing personal, but I struggle to think that when you’re answering some of these questions you truly believe in the answers. Personally I would cry if I had to answer some of these questions and keep a straight face.

        • I could not agree more Manuel with your observations. It feels like the penny hasn’t dropped for some making comments here.

          Simply put, the maths should be (give or take)

          Option 1 = Option 2

          where
          Option 1 = phone provided by telco + voice/data plan + repayment of subsidy

          Option 2 = self-purchase of phone + voice/data plan

          PS: I made the same calculation on T-Mobile UK and options come with £3 difference over 2 years.

          The moral of the story is the telcos in Canada are getting away with over-charging their customers whilst making extra-ordinary profits. Stuff like activation should be included in price as a cost of attracting customers to their network. Caller ID costs NOTHING in real terms, which means $7/month of pure profit (or what ever the bundle for caller id is).

          Lastly, I’m not suggesting that mobile phone operators should be giving phones away for free, I fully expect to pay for what I get, but don’t like being “taken for a ride”.

    • Actually.. “buying a car analogy makes sense.

      If you were to lease the car at the rate you suggested ($250/month), you’re not taking into consideration of insurance, gas, checkups (which can all be measured by monetary value, similar to that of wireless service [Voice and Data]) and if you were to pay for the car outright, you’d still have to pay for gas and insurance guaranteed.

      All wireless carriers subsidize the products they sell to entice their customers into contracts.. It’s not about the phones, they care for the 3 year service you promise by signing the 3 year contract.

      If you were to buy the phone outright with no contract attached, that’s an available option. Not everyone has money to blow $600+ on phones. You’d still need to pay for the service in order to use your phone, regardless where you take your business.

      What difference does it make if you sign a contract and if you buy outright? Very simple. If you signed, and unhappy with the service received, you’re entitled to leave but you’d have the cancellation fees attached (with this new policy though, they make it so that you pay the remainder of your phone as if you bought it outright)

      If you bought it outright, since you’re only paying for service and because you’re not on a contract, you can stop your month to month payments and pick up service with someone else who might please you more.

      To me.. the car analogy makes sense.

  12. Agreed!Why bother spinning this as the newest customer friendly contract provisions? All it means is that Rogers has fine tuned contract obligations to benefit Rogers and not the customer. Here’s a thought why not do away with contracts period and offer other incentives for customers to stay on board! From what I can see, its more about new activations that get the hardware subsidy and to not promote early cancellation so that Rogers does not lose money on hardware. Instead of re-spinning in the media contract provisions why don’t you just spell it out instead of using the new contract jargon? Reaaaaalllllyyyy!? Who are you guys kidding!?

  13. And also early adopters who choose to renew DO NOT getsubsidies pricing with all the fees such as the early upgrade fee and sometimes works out to the full price of the device. Rogers def needs to re-adjust pricing and early upgrade renewal programs to make it worth while for us early adopters to switch up early without or without a re-contract signing.

    • If your talking about the EHUP fee, all thats for is to recover the subsidy remaining on the phone. Now i will admit it doesnt work out perfectly to the discounted amount, but pretty darn close.

  14. The thing people needs to keep in mind is that your phone is locked to a specific carrier even if you buy the hardware outright. The way to do this is that, for example, if you really like the iphone, buy it directly from Apple unlocked.

    Like myself, I used to have a 32GB iPhone 4 directly from Apple (Cost me about 850 with tax). When 4S came out, I sold my iPhone 4 at $600. The difference is $250. iPhone 4 is launched is July 2010 and 4S launched in Oct 2011. There is 15 months in the gap. $250 / 15 month, you only paying $16.67 a month. I had the freedom of choosing a very low cost plan with an other firm and my bill averaged about $48 a month (With data, CID and the standard voice plan). I can also ensure that I can get the latest and greatest every year. You will have a lot of bargaining power when you are not in contract and face upgrade fees!

    In you go into contract, you are forced into high priced plans that will cost you at least $55 + another $10 or so for add on…

    You ended up maybe paying the same or maybe even a bit less without a contract. Keep in mind though, you need to own a highly popular phone like iPhone, Galaxy S series and Nexus. The point I am trying to say is shop for the plan, not the phone because you can buy unlocked phones on eBay, Amazon and Newegg.

  15. How do I get a copy of my agreement that I entered into 1 year back, which lists out all the subsidies that I got – device or data?

  16. Month to month eh! I bought the Samsung Tab when it came out and choose to go month to month with my data plan. I called Rogers a month ago and asked them to cancel the plan and they told me I had to give them 30 days notice???? This made me very upset as now I have to pay another month when I do not want the service. I did not enter into a contract so why do I have to pay an extra month? Rogers I am not happy and I have had my business account with you guy’s for 12 years now.

  17. Where can I get information regarding the voice vs. data subsidy? I am looking to purchase a BB Bold 9900 on a three year contract, but I want to make sure that I understand the contract properly. How much of the $420 subsidy is for voice and how much of the subsidy is for data? As a consumer, this information should be available to me. I want to know what the penalty would be if I choose to drop data partway through my contract.

    • Hi Jeff, that info will be spelled out on your agreement should you choose to consider signing up for a term contract.

  18. I love the new Cancellation policy. Makes alot more sense than the former. with the ECF policy you had to pay a flat rate regardless of the phone subsidy, whereas with this new policy, your just paying off the money you owe on the phone. However, I would like to know if a similair change will be happening with the Early Upgrade Policy. As it stands the EHUP policy is not terrible, but I definitely feel it can be improved upon. Not to mention if the EHUP policy were to be ammended in a similair way, I would be more inclined to continue signing up on contract, because as it stands right now, I may just wait out my current contract and go month to month for all phones thereafter.

    So, How about it Rogers, any plans on redoing the Hardware Upgrade Policy in a similair fashion?

  19. It seems more transparent, but I’m wondering how much the subsidy fee exceeds the original cost of the phone. Seems like a pretty ginormous interest rate for what is essentailly a loan.

    ” Rogers offers additional subsidies to customers who sign up for both voice and data plans” I have never seen this. Are you saying there have been offers where, for example, a phone was $100 for outright buy, $75 with a voice plan and $50 with a voice and data plan?

    • Glad you think it’s more transparent, alph, but we’re not saying there are those types of offers. While it depends on the device, you’ll find our advertised prices are based on 3-year voice and data plans. Otherwise, you’re looking at a smaller inducement.

  20. what about the $35 activation fee. is that gone now.