Carriers’ Financing Options Offered to Mitigate Rising Device Costs
The cost of smartphones has been steadily rising year after year. Until recent years, carriers would offer two-year wireless plans priced at offloading the cost of a device, spreading it across the 24-month commitment.
In 2019, the cost of a higher-end device has easily tipped over the $1000 CAD price point. As reported by Red Deer Advocate, Canadian carriers have had to provide alternative measures to keep customers on their networks. One, in particular, has been the financing option. As the rise in costs has increased year over year, some carriers have now been providing financing options to its customers. Rogers has been a large proponent of this measure, having developed a plan that separates the services from monthly installment fees.
In a recent statement, Brent Johnson, president of Rogers Wireless said: “Consumers from around the world have enjoyed the benefits of device financing for some time and Canada is one of the last countries to adopt this model.” The model instilled by Rogers has helped keep monthly service fees lower, and at the same time lighten the burden of device costs.
That is just one of the many options available to customers looking to purchase a new device. Shaw Communications president Paul McAleese told Red Deer Advocate: “Rather than have a rate plan with an additional monthly payment required, and then perhaps a balloon payment at the back end, customers have told us that they’d like it all built into one, simple transparent payment (as Freedom does).”
It’s no surprise that customers are hungry for options. When faced with a steep cost of a phone, it’s become more attractive to pay the cost over time rather than offload over $1000 on a device at once. That is especially true when taking a look at Apple, whose higher-end smartphones have now reached the $2000 mark. The iPhone 11 Pro Max with 512GB has risen the ceiling on smartphone devices and one can imagine that the ceiling isn’t going to be lowered anytime soon.
Many regions around the world have adopted the financing payment method when it came to wireless devices. Canada was much slower to incorporate these plans. In the past six months, it has seemingly become more popular.