How to buy a prepaid cellular
phone in Canada

Live in the U.S.? - Click here

Date: Oct. 17, 2003

By Andy Walker

Are you in the market for a new cellular phone? Or does your teenager need one and they're looking to you to come through? If the cellular phone falls into the “nice-to-have” or occasional use category or your teen needs some cellular boundaries perhaps a pay-as-you-go phone will appeal to you.

However, there are large budget swallowing traps within these plans so study them carefully, as they can end up costing you more than a phone with an airtime contract.

The pay-as-you-go wireless phone packages are aimed at the casual cellular phone user or people who have erratic call patterns. If one month the phone is attached to your ear and then the next it lays unused in a drawer, one of the pay-as-you-go plans may be just what suits you and your budget.

They also are ideal for people who have bad or no credit history. As a result they are popular among teens, commuters from out of province or country or newcomers to Canada. However, there’s no restriction on who can buy them.
Here’s the skinny on how to shop for these services and some gotchas you can navigate around along the way.

Pay-as-you-go phones are set up exactly as they sound. Like a public pay phone you pay out money as you use them. Of course, not a quarter at a time. Instead, you pre-buy blocks of time and the funds are decremented as they are consumed by your phone usage.

First you’ll need a phone. The four national wireless carriers in Canada – Bell Mobility, Telus Mobility, Rogers AT&T Wireless and Fido – all have elaborate pay-as-you-go schemes that can be used with most of the phones they offer. There are a few exceptions, typically their high-end or business phones are excluded. Some new products won’t support this kind of payment program either, but the choice is better today than it was a couple of years ago.

When you choose a mobile phone, expect to pay lots more for it than you would if you choose to pay through an annual contract. In fact an informal survey of pricing offered by the four national wireless carriers shows you will pay between two and seven times more. For example, a phone advertised for $49, can cost you $200 on a pay-as-you-go plan. This is because mobile phones are subsidized by the wireless carriers when you commit long term to their service with a contract. The pay-as-you go phone is priced really high to extract as much money out of you as possible up front because your loyalty is not contractually guaranteed.

Once you have the phone you then have to charge it with airtime. This is achieved either by calling the company or visiting their website and paying by credit card or buying a prepaid wireless card from a retailer. Often convenience stores and newsstands will sell you these.

You can buy cards and blocks of airtime in various denominations: $10, $25, $50 and $100 are typical. Every call you make or service you use is charged against this credit at a rate of about 0.30 to 0.50 cents per minute for calls. Other services such as voicemail, web usage, text messages and downloadable ringtones are also billed against the credit. However, you will pay double or triple for these services compared to what you would if you had an annual contact.

There’s also a variation on a theme. Rogers AT&T offers a prepaid hybrid phone package called “totalphone” where your bank account is debited every month automatically with an amount you choose. Your usage is debited against that amount, however the per-minute rates are better than pay-as-you-go rates.
The problem with non-contract mobile phone packages is that the cost skyrockets when you deviate from casual, local usage.

If you roam to another country or out of province your phone may not work. If it does, you’ll pay hefty per-minute fees. Bell Mobility, for example, quotes an out-of-country roaming rate of $1.80 a minute. Overseas calls and long distance fees are also exorbitant.

There other catches. You may be charged a monthly 911 fee. The credits you buy also have an expiry date. So if you don’t use them up in the allotted time, they expire. These expiration periods vary from 30 to 60 days. So if you charge up your phone with a $100 credit and then fail to use it with a couple of months – poof! – it’s gone. When you buy the airtime, make sure you check the expiry date as the lower denominations often have shorter durations. However if you recharge the phone with an additional funds before the expiry date of your existing credit, some carriers will extend the purge date on the expiring time for a few weeks.

If these rules seem restrictive and unfair, you’re right, they are. However, there are some benefits. Some pay-as-you-go plans offer free calling to or from other pay-as-you-go customers. Others offer free or discounted evenings and weekends. Or flat rate unlimited calling for evening and weekends is sometimes offered for a flat monthly fee. If you choose not to recharge the phone for a month then you pay nothing, however don’t leave your phone fallow for too long as you may lose your cellular number. Check with your carrier on that.

In the end, the wireless carriers will find a way into your pocket book, but you use these plans to your benefit if you study and follow the rules. If you buy several of these phones for your staff or family, call locally and use the phones on a limited but regular basis you’ll save money in the long run.

If this column still doesn't fully help you with questions about buying a prepaid cellular phone or if you need personalized help with another technology problem, please see: Emergency Help

Finished reading this page? Why not go try out GoToMyPC for free for a month - you can remote control your computer from anywhere. Cyberwalker uses it and thinks it's fantastic!