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1:48 pm
October 15, 2008
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I recently read about cell phone providers getting rid of the expiry of airtime in certain European countries (Austria, Germany, ...). Would that be possible here in Canada? If we collectively write to the Better Business Beureau or Consumers's Association of Canada or something.... and complain that it's not fair, they may be able to achieve the same thing here in Canada.
I mean, think about it. A prepaid voucher should have no expiry date, just like a gift card has no expiry date (I think it's the law). And the airtime itself should have no expiry date either. It's absurd having to top-up before expiry even though you still have airtime left to avoid it being expired....
What do you guys think?
3:45 pm
March 15, 2008
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Cell phone service providers are businesses who have the right to earn a profit. It costs them something to maintain your phone number and your account as well as to provide the cell infrastructure that you depend on when you actually use the phone. So if you think that airtime should never expire then you should also be OK with a monthly maintenance fee (e.g. SO's 99¢ or higher) and/or some minimum monthly airtime usage. The expiration of airtime is merely one way to charge you a minimum monthly fee. One way or the other you'll have to pay it.
You can't have it both ways. Not if you want to see bars every time you want to use your cellphone.
4:01 pm
October 15, 2008
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If this can be done in Europe, then it's possible in Canada too. Cell phone providers have money coming out of their ar$es.
In Europe there is no monthly 911 fee, so you still have the same airtime after 6 or 12 months without using your account. Not here in Canada. Here people pay for everything and don't think.
4:59 pm
March 15, 2008
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If this can be done in Europe...
Could you please provide a link that confirms this.
Perhaps some European carriers are willing to gamble that few people will get a cell phone and airtime without using at least $25 per year compared to those who will. Otherwise they'd be giving away a service (the ability to use a phone perhaps as infrequently as every few years) without getting any revenue for it. Long term they can't do that and stay in business.
BTW the 911 fee is a CRTC requirement. Granted at 99¢/month SO is charging more than their cost, but again, they can't provide it for free and stay in business.
6:22 pm
October 21, 2008
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Sure, no expiry date would be great, but Bylo makes a good point, cellphone companies do need to make at least a fair bit of money from clients, even if those clients hardly ever use their service. And with Speakout you can buy the lowest airtime card ($25) and stretch that out for a whole year. $25/year minimum doesn't seem unreasonable to me.
This can be solved through basic capitalism. You, as the client, should go to the service provider that offers the longest expiry time. The same way you go to the gas station that offers gas at the lowest price. If every prepaid client went to Speakout, then you would see how quickly the other companies would change their expiry dates.
So, every time you meet someone who has to constantly top-up monthly to avoid losing their airtime, tell them to switch to Speakout. That seems like a much more effective use of everyone's time, compared to writing to the Better Business Bureau or the CRTC.
9:58 pm
In Europe there is no such thing as paying airtime for incoming calls, EVER. yet canada has it.
I would rofl really hard if Canada would come even close to European standards. Last time I checked Canada is the only one from ?1st? world countries where the iphone did not come with unlimited data (never going to buy crapple but was just saying).
10:24 am
October 15, 2008
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Sorry I don't have a link for that in English, but I will keep looking.
As far as paying a monthly fee for some kind of service goes, I must disagree. 99% of people who use a cell phone with a prepaid airtime do actually use it all up, so the cell phone carrier has a constant stream of funds coming in. But there is the odd number of 1% of clients who only use the cell phone for emergency use, but the "loss" from these clients is offset by what the rest of the people pay. Have you ever heard of a cell phone carrier that is not in profit??? Neither have I. They make tons of cash out of people who like to babble all day on their phones and pay $60-$100 monthly bills.
I am repeating myself but in Europe you can get a sim Card for $10 with $10 airtime on it, expiry date is 12 months, no fees for incoming calls and no monthly 911 charges. So technically you can keep your $10 balance all year, only use the phone in emergency AND you can even receive unlimited incoming calls from your friends or from work and still at the end of the year you can get your $10 back refunded if unused! But this scenario is very unlikely to happen, maybe in 0.01% of cases. That's why these carriers are still profitable and make huge amounts of money!
1:20 pm
March 15, 2008
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Sorry I don't have a link for that in English, but I will keep looking.
French, Spanish, Italian, German, etc. will do.
But there is the odd number of 1% of clients who only use the cell phone for emergency use, but the "loss" from these clients is offset by what the rest of the people pay.
As I said above, "Perhaps some European carriers are willing to gamble that few people will get a cell phone and airtime without using at least $25 per year compared to those who will." But regardless, the decision to take that gamble should be theirs, not yours.
I'm not disputing that Canada is less competitive and more expensive than elsewhere. I'm just arguing that the solution isn't to lobby the BBB, the CRTC or your MP. The solution, as Big Ang pointed out, is to vote with your wallet.
P.S. If you think that starting a new cell phone company is so easy and profitable perhaps you should have submitted a bid at the recent spectrum auction
P.P.S. I'm happy to pay SO 99¢/min and $25/year to provide me with service 24×7x365. That's still way cheaper than the big three, Bell, Rogers and Telus and also cheaper than the other PAYG providers.
5:36 pm
March 15, 2008
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99% of people who use a cell phone with a prepaid airtime do actually use it all up, so the cell phone carrier has a constant stream of funds coming in. But there is the odd number of 1% of clients who only use the cell phone for emergency use, but the "loss" from these clients is offset by what the rest of the people pay.
Translation: I want some Canadian cell provider to give me and my 1%er friends a free ride, subsidized by the other 99% of their customers who pay their own way, making that cell provider's business viable. And if the cell provider won't give me that free ride then I'm posting here to enlist the help of those 99%ers to bully the provider to do so.
No thank you.
5:38 pm
October 21, 2008
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Actually Bylo, you can start up a cellphone company without buying spectrum. Ztar, Virgin, President's Choice Mobile (and possibly others) are MVNO (Mobile Virtual Network Operators). MVNOs just piggyback on top of a Rogers/Bell/Telus network and pay Rogers/Bell/Telus wholesale rates. Rogers/Bell/Telus is responsible for the transmission, cell towers, etc, and the MVNO is responsible for customer service, billing, advertising, etc. And starting up a company like that takes considerably less money than buying spectrum and building cell towers.
So, there are obviously some people that feel that there is a huge market in Canada for people who want a cellphone but feel that $25 PER YEAR is way too much. So, why not start your own MVNO company and be the next Ted Rogers?
I can see the business plan now: "Our target market is people that will give us the absolute least amount of money (or no money at all) and will hardly ever use our service, while at the same time want that service to be available 24/7 and wherever they go. We will spend our money to keep the phone number active, staff a call centre with salaried employees, and keep a decent amount of cellphones in stock waiting to be sold. In return, our clients may use the phone once every few weeks and will pay us $.20 for their 1 minute call. We anticipate our revenues per client to be an average of $5/year."
That sounds like a great business model. Why don't we get a few people together, make a company, and go on that tv show Dragon's Den and get some seed money. I'm sure those venture capitalists will jump on this.
9:09 pm
bylo said:
Translation: I want some Canadian cell provider to give me and my 1%er friends a free ride, subsidized by the other 99% of their customers who pay their own way, making that cell provider's business viable.
Umm, we're one percenters by choosing Speakout. I used to pay about $65/month for two cell plans. Now, we get by on about $100 airtime per year for basically the same thing. I'm shamelessly riding on the coattails of my neighbours and their expensive 3-year smartphone contracts.
8:14 am
March 15, 2008
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Actually Bylo, you can start up a cellphone company without buying spectrum. Ztar, Virgin, President's Choice Mobile (and possibly others) are MVNO (Mobile Virtual Network Operators)...
Of course, there's always business to be made at the margins, but you'll never be as big and profitable as the majors and thus able to give Goldhead and his friends that free ride they want 😉
(If becoming an MVNO is such a road to riches then why did Videotron, Yak et al bid $billions for spectrum last fall?)
8:16 am
March 15, 2008
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Umm, we're one percenters by choosing Speakout...
Right. So Goldhead should appeal to those on Rogers, Bell and Telus to give him that free ride because they obviously have a lot more spare cash to throw his way 😉
1:48 pm
October 15, 2008
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Here is the link you asked for in German:
2:35 pm
October 15, 2008
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bylo said:
99% of people who use a cell phone with a prepaid airtime do actually use it all up, so the cell phone carrier has a constant stream of funds coming in. But there is the odd number of 1% of clients who only use the cell phone for emergency use, but the "loss" from these clients is offset by what the rest of the people pay.
Translation: I want some Canadian cell provider to give me and my 1%er friends a free ride, subsidized by the other 99% of their customers who pay their own way, making that cell provider's business viable. And if the cell provider won't give me that free ride then I'm posting here to enlist the help of those 99%ers to bully the provider to do so.
No thank you.
By your logic getting a free ride would also mean that you come to a grocery store and only buy the on-sale items and nothing else and leave. A lot of stores sell items for below cost, just to get traffic in. It is a standard business tool.
If the wireless company started advertising that there is no expiry date on their airtime I doubt it would attract a majority of "free ride" folk or whatever you call them. It would most definitely get the company more customers, who would start using other serives as well.
2:55 pm
March 15, 2008
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Here is the link you asked for in German
That court decision applies only to Austria. In Germany you still have only 215 to 365 days. In other European countries the expiration comes even sooner. On some cards you`ve got as little as 15 days (e.g. Virgin Mobile France) to use it or lose it.
3:00 pm
March 15, 2008
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By your logic getting a free ride would also mean that you come to a grocery store and only buy the on-sale items and nothing else and leave. A lot of stores sell items for below cost, just to get traffic in. It is a standard business tool.
That`s right. It`s a business tool. The part you`ve missed is that it`s voluntary. You seem to think that because something isn`t fair (airtime expires) then the cell companies should be forced to provide unlimited expiration of airtime.
If the wireless company started advertising that there is no expiry date on their airtime I doubt it would attract a majority of "free ride" folk or whatever you call them. It would most definitely get the company more customers, who would start using other serives as well.
Then perhaps you should lobby a cell company directly and make a business case that supports your contention.
12:15 pm
October 21, 2008
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I don't mean to make this out to be a business lesson but.....
Goldhead, you are obviously not a business owner. Stores don't sell money-losing items/services. At least not any store that wants to stay in business. Even items that are sold below cost, are calculated to make money somehow.
Grocery stores (and any other business) only sell items at a price that is advantageous to them. Period. When something is on sale, it's only because of these reasons:
1. The store did a one-time,large quantity purchase of an item at a huge discount to sell to their customers. That store is not only making a small profit off the discounted item, but will probably make more money because they'll sell a crapload of them. The Winners clothing store chain has based it's entire business model on this. This technique will not work with the cellphone business
2. The store has some leftover items that are out of season or (if it's a grocery store) the items will expiry soon and need to be thrown out. The store needs to make an economic decision and decides to offer a discount on the item if, overall, they will make at least some money. Knocking 20% off some meat that expires in 2 days, or selling Halloween decorations at 50% off because you don't want to spend the money to move them into storage for a year sometimes makes good economic sense. In these cases, the idea is to make at least some profit, or at least keep the loses to a minimum. This is in no way the ideal way of doing business. Ideally, all those items will be sold when the store wanted them to be sold, but selling them at a loss is making the best out of a bad situation. Speakout's March promo where they're trying to get rid of some old Nokia 2610 and 6061 is like this.
3. The Canadian Tire model. If you wait long enough, whatever you want at Cdn Tire will be on sale in their weekly flyer. On one hand this sucks for the company, because few of their clients want to pay full price for anything at the store (this from a friend that used to work there). On the other hand, every single item in the Cdn Tire flyer that's on sale, including some deeply discounted items, make money for Cdn Tire. Yup, that tire gage you bought at 75% off still made Cdn. Tire a profit. I can't see how this can work with a cellphone company that only has one line of business like Speakout.
4. Actually planning and buying a product to sell at a loss in order to get the client to buy other stuff in your store, or to initially sell them something at a loss in order to make money off you later on. This only works when you know that you'll be making money off your clients later on. When Gillette gives you a free razor, they know that they'll be making money off you when you buy razor blades. Same with HP giving you an inkjet printer. Same with Rogers giving you a 'free' phone once you sign up for a 3 year contract. And the same goes with Speakout when they have their "Free phone with $100 airtime purchase" promo. In fact, the Speakout example is probably the worst example (from the company's perspective) of this type of sale, since it will take a long time for Speakout to recoup it's loss, if ever.
Your example of selling a cellphone plan below cost in order to get foot traffic in so the foot traffic can buy additional products only works in a few select cases, and Speakout isn't one of them. Example, a few years ago a furniture store was giving away a cheap mp3 player to the first 20 people at its store. That got the store some foot traffic of 20 cheapskates (like me) to show up, pick up the player, and leave. No sales made, over in 5 minutes. If Speakout were to offer a money-losing plan to their target market (which is people that don't use cellular service that much), what can they upsell? They only sell one service, they can't upsell to anything even if they tried. "Hmm, I'm going to buy this cheap $100/year cellphone plan. Hey, while I'm here, why don't I get the $250 Blackberry Bold and sign up for a $70/mth voice and data plan instead?" See? There is no upsell for a company that sells one product.
2:05 pm
March 15, 2008
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Excellent analysis, Big Ang.
Although I'm hardly complaining, I've never understood SO's "buy $100 airtime and get a free phone" promo. ISTM that you can then add airtime in a subsequent promo and sell the new phone and SIM privately. That reduces your cost of airtime perhaps by half. But the person who buys your phone/SIM is likely going to be a light user (otherwise they'd have spent $100 on the promo) so SO's subsequent revenue from that phone is going to be minimal. Then again, perhaps the cost to SO of a Nokia 1208 and SIM is only ~$25.
