What’s Cheaper? Buying an Unlocked iPhone vs Subsidized 2-Year Term Compared


If you’re on the hunt for a new iPhone 5s or iPhone 5c and you are looking at a 2-year term contract, it can be tricky to compare the plans available especially when it comes to an unlocked iPhone versus one on contract.

Luckily if you have an Apple Store in your area they have made the process easier by comparing the minimum plans required to get an iPhone on contract. As you can see from the pictures below, the rates are shown on iPad displays in-store.

As for finding the best plan? Well, at this point in time they all seem the same from Rogers, Fido, Telus, Bell and Virgin:

Screenshot 2014 02 14 12 13 41

Screenshot 2014 02 14 12 13 31

The ‘cheapest’ iPhone plan on a 2-year term looks to be from Bell at $70/month for 500MB of data and unlimited nationwide minutes.

What’s a better deal? Get an iPhone on a 2-year term or buy an unlocked iPhone from Apple?

We get asked this all the time. What’s a better deal? Well it all depends on your needs. Let’s try to compare an iPhone plan with 2GB of data on contract and off contract.

Scenario A: Buying an iPhone 5s on a 2-year contract

  • 16GB iPhone 5s: $229.99
  • $85 plan with 2GB data x 24 months: $2040
  • Activation fees: Bell ($15, promo price); Rogers ($15)
  • Unlocking fee: Rogers ($50); Telus ($35); Bell ($50)

Total cost: $2334.99 + tax (iPhone, plan, $15 activation fee, $50 unlocking fee)

Scenario B: Buying an unlocked iPhone 5s from Apple and going month to month

  • 16GB iPhone 5s: $719
  • Plan 1 — $59 Fido Smart Plan with 2GB data x 24 months ($53.10/month after 10% BYOD discount): $1274.40
  • Plan 2 — $49 Fido Smart Plan with 1GB data x 24 months ($44.10/month after 10% BYOD discount): $1058.40
  • Plan 3 — $39 Fido Smart Plan with 400MB data x 24 months ($35.10/month after 10% BYOD discount): $842.40
  • For couples/families: add an additional line, save an additional 10% on top of 10% BYOD discount

Plan 1 total cost: $1993.40; potential savings vs 2 year contract —> $341.59

Plan 2 total cost: $1774.40; potential savings vs 2 year contract —> $560.59

Plan 3 total cost: $1561.40; potential savings vs 2 year contract —> $773.59

So as you can see, an unlocked iPhone from Apple is cheaper than going on a 2-year term subsidy. However, this route will cost you more in the short term if you don’t have cash up front for an unlocked iPhone.

Plan 3 works out to a ‘free iPhone’ (if you want to call it that) if you can stick to the paltry 400MB per month or treat it as a flex data plan for light users. Even with one tier of overages, you’re paying $40.10/month for 650MB of data (at $5/250MB). This plan would work best for those who don’t use their iPhones at work and only at home (where Wi-Fi is abundant).

Even if you need extra data throughout the year, if you average out the cost of light overages you’re still saving versus paying the minimum $85 per month on a 2-year contract. This would be ideal for those who want the cheapest iPhone plan available with minimal data (and I know there are lots of you out there).

If you stuck to Scenario B with Plan 1, your unlocked iPhone pricing is almost cut in half due to the ‘savings’. Also, since you’re going month to month, if a better promo plan pops up throughout the year you can jump ship to another carrier and save even more.

With an unlocked iPhone out of the gates, worldwide travellers can rejoice and it adds extra value to your phone when selling on Craigslist, eBay, etc. so you can rinse and repeat. It’s also a way to take advantage of your hard fought retention plan if it’s a good one.

Of course, these scenarios are just basic comparisons so your situation may vary from others. What’s your ideal way to get an iPhone on the cheapest possible plan?

Update Feb. 15: As many have noted in the comments, if you have decent WIND Mobile coverage in your area, an unlocked iPhone 5s/5c on the network will save you even more money.

Also, with buying an unlocked iPhone online, don’t forget to go through online portals from Aeroplan and Air Miles to get your travel rewards!


  • adam

    i am on a 65$ telus business plan right now with an iphone 5 (1000 min 3gb of data). when i upgrade to the 6, i will keep my plan, if they dont offer it to me, i will dump iphones and get a nexus 5 or 6 on a 45$ plan. i wont pay premium prices like this just to have an iphone.
    My wife just got the 5c. with a 65$ 1gb plan with bell on loyalty. and my friend at work negotiated to keep her 55$ fab 10 1 gb plan and got a 5s for 230. people need to call in and ask for deals. just tell them you’re canceling.

  • Chzplz

    I did the math and went with Koodo. They provide discounts for bringing your own phone. Made the difference significant.

    I also value the flexibility of being able to jump to another provider if they come out with a great deal, but in practice that isn’t all that realistic – Bell screwed me over and forced me to pay Alan extra month. You have to give them a months notice to port, but the port happens immediately. You can’t give them advance notice of your intention to port. Major scam.

  • Graham

    Unlocked phone + pay as you go from Rogers via $100 top-up at a time (lasts 365 days), with $10 100MB data add-on works out to $120/yr. Use iMessage or WhatsApp for messages. Voice minutes 50c/min but I almost never use voice.

  • D Kup

    If you have 5S/5C and using Wind, you will save even more!

  • einsteinbqat

    2GB is fine if you have access to wifi. I use 3-4GB of my 6GB.

  • JC

    finally there are such info provided for us to make decisions!!! thanks a lot!!!

  • JC

    i am also wondering which provider has a better LTE on iPhone 5s in deed, since rogers keep saying they have the fastest network, but seems not really that fast in deed. and bell/telus keep saying they are running on the largest network with “great coverage”…but in metro vancouver, i found there are lots of areas that are not covered, or just have 1 bar in signal….

  • JC

    I got a question, “For couples/families: add an additional line, save an additional 10% on top of 10% BYOD discount” is that true? and is this only for fido? how about koodo or virgin? =)

  • Stefan

    So true! I am with Wind on $30 plan. I LOVE IT!

  • Yeah I didn’t mention AWS carriers, but yes definitely even cheaper.

  • If Wind had better national coverage they would be killing it with unlocked iPhones.

  • Next post coming is how to avoid paying the extra one month of service if you don’t give one month’s notice. Stay tuned!

  • Yes it’s true as I have two additional lines right now on my Fido account.

    As for Koodo and Virgin, I can’t recall off the top of my head but I’ll find out.

  • With Rogers you get EDGE to fall back on if you’re going to a far away place, whereas the TELUS/Bell network only has 3G. As for LTE, it’s all pretty ‘fast’ but depends on where you are like you said.

  • Cheers!

  • Tim

    5gb tablet plan with fongo $40 month taxes included $20 per year for unlimited texting. = about $1800 taxes included for two years (3 more gb of data than any of your options, cheaper than all plans when considering taxes)

    1gb tablet plan with fongo $25 per month taxes included + $20 per year unlimited texting = $1440 for two years (basically plan 2, but $300 cheaper, and again cheaper than all plans)

    Also you have the ability to make and receive calls over your Canadian number as though it were local anywhere in the world so long as you have data or wifi, the latter very useful if you end up in an area with spotty cell coverage but internet access)

    After 6 months I see no reason to use a normal plan anymore. 1gb will get you about 2000 minutes of talk time, long distance is free to virtually every Canadian city or 2 cents per minute otherwise.

    I hesitantly post about this because I expect the carriers to make it more difficult if it catches on.

  • D Kup

    I always wonder if you don’t stream video, what really is the benefit of LTE?

  • It’s just faster speeds and really depends on user needs. LTE also drains battery faster too.

  • xxxJDxxx

    Funny how the ‘discout’ carriers seem to offer the worst plans. All of those rate plans are pretty terrible and worth noting that this math only works if you are a new customer or are signing up for one of those plans. Those with existing plans can still get a subsidized upgrade and keep their current plan (which is probably better)

  • Yep, that’s why we mentioned the scenario we calculated isn’t covering everything for everyone.

    But the numbers don’t lie since with an unlocked iPhone you can use it on cheaper plans that typically aren’t iPhone subsidy eligible.

  • GILLY01

    That’s a bit skewed when you consider that they are only considering Fido plans… On some carriers the opposite would be true. Take Telus for example (I know these are SK plans so they may not apply to everyone). The 5GB plan is $65/month. If you take the BYOD discount of 10% off, that only saves you $6.50 per month. Over two years you only make back $156.00. Therefore it’s way cheaper to take the contract.

    I am just saying that it depends of the carrier, the plan, the type of phone, and even the province you live in. It’s not that simple.

  • Yes, regional exceptions were not taken into consideration, as we stated in our conclusion this was just a basic example. SK/MB deals are pretty awesome which the rest of us can’t get.

  • I’ve been telling Telus the same thing since the iPhone 5S came out. I was so angry and after reading this article, I had to post my anger on my wordpress >:( Thanks for doing the math 😉

  • With Fido we managed to grab an iPhone 5s 32Go for 274.58$ (discount of 489$ using our Fido dollars) + the old plan at 60$/3Gb (unlimited calls in Canada).

    So the total for 2 years with contract:
    274.58$+15$ (activation fees) + 70$X24=1969.58$ 😉 still cheaper than the scenario A and B plan 1. It really depends on how you negociate your contract with them 😉

  • Nice!

  • Khan

    The problem is places like Fido have great plans, but have *special* plans for the iPhone which suck. The actual Fido smart plans are pretty great. I’m currently using the $39 one with an iPhone 4 and am happy. But, if I get a new iPhone with subsidy I’d have to switch to a horrible plan. It’s just bad. I’m going to stick with unlocked phones and picking the reasonable phones that all other smartphones get, instead of getting gouged for wanting an iPhone.

  • Khan

    reasonable *plans* that all other smartphones get…

  • annn

    As a finance major, I was looking forward to seeing the future value of the money that could have been invested when you choose the plans.

  • Sly

    this is bs, no wind in montreal

  • Chrome262

    Its pretty much the same as I did, except I got 2 iphone 5s 32gig, I had lots of fido dollars. They let me carry over my 6gig plan with better calling as above. Although I still have to pay for the unlock fee

  • D Kup

    Gary… I think if you can do another comparison of Roger’s Next and Telus T-Up Vs BYOD, this will be an interesting one.

  • Sanjay

    I am not sure if in cases of corporate plans if there are actual savings. I mean, most of us will stay with the carrier for a minimum of 2 years any ways, am I right?

    WIND has some good plans, but the $30 plan is grandfathered from what I understand. You’re mixing different plans but you need a plan any ways. I just can’t seem to grasp the concept of how you guys calculated whether it’s worth it or not vs buying the device unlocked if staying with the same carrier.

  • chickeee

    what investment would you recommend with the $25 to $45 monthly savings and two year time horizon

  • Yes, totally agree and thanks for making it clear. But what about non-iPhone or phones that are cheeper than iPhone, somewhere around 400.

  • Cristhian Mejia

    The carriers have sort of closed that loop by making plans expensive. If you’re going to pay $75 for unlimited with 1GB of data then it’s better to stick with the subsidized device. I have 2GB of data and unlimited for $57 from Fido. So for me to retain that I’ll need to buy my next phone straight out.

  • Dave

    Can I use iPhone 5 (S or C) bought unlocked from US with Wind?

  • CharlieFox

    People usually dont do the math to see which method is cheaper. They just see the monthly bill, accept it’s not too expensive, and go with it even though it’s more expensive in the long run.
    Just do the simple math.

  • Yes that should work. Try it out first.

  • Tommy

    Hi Gary, you should update the information on this page with numbers from September 2014. Most of carriers provides a 10% or approx. 10$ discount if you bring your unlocked phone. Also, I think most people don’t really need to pay to unlock their phone, and I’m not sure that activation fees are different if you have your own phone or if it is part of a contract. With everything I’ve seen to date, no matter the carrier, I’m really not convinced that it’s a better option to purchase an iPhone at full price. With a smaller carrier like Wind, I agree that someone could save money. But if you take the big-3, prices are the same and it’s easy to compare. And my conclusions are not the same as yours (with numbers from September).

  • Agree, we’ll do this soon.

  • andyandysh

    Thanks for the very interesting article… Any way you could update this? I’ve been calculating for the new iPhone 6, especially on the Wind network.

    Cellular Phone Costs

    New iPhone6 64gb
    ***Includes Apple Care

    Cell Plan

    ***Includes unlimited Wind + Voicemail + tax

    12 Months

    1 Year Cost

    2 Year Cost

    Plan Costs

    New iPhone




    Cell Plan

    **Standard Plan Costs from major providers with any amount of data more than 200Mb



    12 Months

    1 Year Cost

    2 Year Cost

  • saahil

    Except the fact that you save on the plan… Read the article again please……

  • GadgetHound

    Yes as mentioned below Tommy, you’ve missed the point that when you bring your own phone, you can choose a non-subsidized plan from the carrier with identical features at a cost far lower than what you could achieve on subsidy. Besides that no carrier would offer a plan cost so that it’s cheaper for the consumer to subsidize over the 2 years! They would never carry the cost of your iphone ‘loan’ for free.

  • Elizabeth

    Dumb question: when you say “This plan would work best for those who don’t use their iPhones at work and only at home (where Wi-Fi is abundant)” do you mean that one can just use wifi instead of cellular to “hoard” their 60MB?

  • Yes. It may be a good idea to also disable apps that use cellular data too.

  • Elizabeth

    Thanks, Gary!

  • Kimberley Hanley Raeburn-Gibso

    I found that I would have to ‘upgrade’ my plan [3gigs/month for 65 dollars] to upgrade my phone with Rogers–the new rate would be 2gigs for 100/month, or 5 gigs for 105/month. But if I buy a phone outright, I can keep my current plan… so that makes a big difference in the price…. It is very confusing and frustrating… these ‘free’ upgrades are anything but!

  • Today, in the market there are phones that are significantly cheaper than the famous IPhone, and no less powerful, “stuff”, one example is Xiaomi. Of course IPhone cool phone, well it is not affordable to everyone.
    The situation was similar to the first cars in the US, the car could afford only rich people. And now, the market has a new player – the inventor Henry Ford. Thanks to this man, to buy a car could any citizen. And with the IPhone, afford to buy this phone can only not poor people.
    But today, the situation is simpler, producers of the excellent smart phones a lot. Available and ranked smartphone is Xiaomi. Doing “the conscience”. Speaking from experience, hand held and IPhone and Xiaomi :). Excellent phone, price and quality. A lot of positive feedback. There are more expensive options (and they are cheaper than IPhone) , and budget. I hope my advice will be helpful. Good luck :).
    Sincerely, Kladproraba.