May 19, 2008 | Lucas
It seemed like any other day, when I was heading to UBC a month or two ago. As always, I picked up a copy of the daily 24 Hours newspaper while heading towards the SkyTrain station, but this time I saw a massive full-page ad on the front. The vibrant pink colors and bold sans-serif text certainly caught my attention, as did the ridiculous "retro" style of clothing the person was wearing in the advertisement. Later that week, these Koodo Mobile advertisements seemed to appear everywhere - in transit, newspapers, flyers, radio, etc.
Now I've had my fair share of experience with these "hip" mobile phone companies that try and act cool to appeal to the teenage demographic. I used to have a Virgin Mobile phone, and once phoned up their customer service to be greeted with the phrase "sup dude?" Not only that, but Virgin Mobile also told you how they have no catches or hidden fees, clearly stating in fine print that opening their pay-to-download page through your phone would cost you money, on top of having to pay for the actual ringtone/game/wallpaper you wanted to purchase. These past incidences prompted me to do some research on how Koodo Mobile made their money - after all, they were offering a $150 tab up front towards getting a cell phone. How were they making it back?
The revolutionary Koodo Mobile tab system works like this. When you sign up with them, you get a $150 tab in your account towards a cell phone (which you will use up). Afterwards, 10% of your bill each month goes to refill that tab. When you have enough money, you can get another "cool phone" from them for "free", and if you ever want to stop using Koodo, all you do is pay off your tab and you're free. So how does that add up?
Let's assume you get their $30.00 "Five Essentials Combo" and try to figure out how long it'll take you to pay off your tab:
$30.00 * 0.10 = $3.00/month
$150.00 / $3.00 = 50 months
Yes, over 4 years to pay off your tab. So, hypothetically speaking, if you were to cancel after a year of using Koodo, you would need to fork out an additional $114, which is equivalent to paying an additional $9.50 per month (or 30% of your bill) over your one year term.
How's that for "flexing those digits"!