Tuesday, April 29, 2008

Koodo is the New Mentos

Do you remember those old, really annoying Mentos commercials where a guy would pop a Mentos into his mouth and somehow, problems would magically disappear and he'd turn into MacGyver? Everyone hated them, yet everyone remembers them, and constantly talked about them at the time. Well, Koodo Mobile is like the new Mentos: I can't watch TV, walk downtown T.O., or scoot through a shopping mall without seeing a retro 80s fitness gal in tights, or a weird, mustached gym teacher-looking dude plastered everywhere. What gives?

Koodo Mobile appears to be marketing itself in much the same way Virgin Mobile does: as an "alternative" concept to pesky mobile phone contracts and hefty bills. Really, though, you're still dealing with one of the big threes. In actuality, Kodoo is owned by Telus, and operates on the carrier's CDMA network. I won't get into specifics of the service, but there are a number of pre-packaged plans, as well as a la carte items, that are pretty much comparable to other service offerings (see http://www.koodomobile.com/ for more information). The gist is that Koodo focuses on "basic" users that just want to talk and text with their phones, and not really do much else.

So how does Koodo differentiate itself from Telus, and the other carriers? Via something called a Koodo Tab, which lets customers charge up to $150 toward a mobile phone to their "tab", to be paid out in increments of 10% of the balance each month. Once the "tab" is cleared, points will continue to accumulate on a new tab that can be used toward a new phone once you're ready to upgrade. When you think about it, although the service doesn't include a locked in contract, it is similar to signing up for one and getting the phone for free. Let's work out the math: if your phone bill is $40.mo., this means $4 is paid toward your mobile phone each month. It'll take, you guessed it, just over three years to recoup the $150 cost for the phone. Unless, of course, you go over your monthly minutes, in which case you'll pay it off faster.

Koodo doesn't place its emphasis on getting rid of hidden fees and cumbersome contracts like Virgin Mobile does (although the latter company recently introduced hidden fee-free contracts). Koodo takes its primary focus right to cutting down on costly bills; hence the whole "fat-free" fitness theme. But when I really examine the details, it isn't that much cheaper than other carriers.

For example, for $40, you can get unlimited nationwide talk and messaging to up to 5 numbers, 100 anytime minutes, unlimited text messages, and free evenings and weekends after 7 p.m., plus the regular stuff, like voice mail and caller ID. One neat thing is the elimination of that pesky System Access Fee, and the addition of per-second billing (instead of rounding off to the nearest minute). But in digging deeper, I did find some hidden stipulations. For example, the five numbers do not apply to customers in Manitoba and Saskatchewan, and the so-called "unlimited" local calling from 7 p.m. starts on the Monday and only goes until 8 a.m. on the Thursday, recommencing at 7 p.m. on Friday. What happened to Thursday and Friday during the day? Also "detailed billing" is oddly listed as an a la carte option for an extra $3/mo. So what exactly does "regular" billing entail?

Nevertheless, Koodo Mobile sure is making a splash here in Canada. Fat-free mobile? Not quite yet. Some hidden fees need to be trimmed down, and some weight taken off the costs before we get there.

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1 comment:

Anonymous said...

interesting analysis. It's too bad we don't have more independent carriers like in the U.S. to offer truly competitive packages.