Koodo to revamp its Tab system, swap high subsidies for better transparency

Koodo is set to revamp its Tab system, swapping high subsidies for better transparency.

The TELUS flanker brand plans to unveil a new Tab model on April 19th, eliminating the hierarchy of different subsidy sizes in favour of a less generous, one-size-fits-all financing plan.

Right now, Koodo offers three Tab varieties, Small, Medium, and Large, that give customers between $150 and $500 off a phone depending on the plan and the monthly contribution. For example, buying a phone on a Tab Medium provides up to $300 in subsidy, with a $5 monthly contribution from the user. A Tab Large, which provides up to $500 in subsidy, requires a more expensive monthly plan, but also forces users to pay $10 every month until the phone balance reaches zero.

Koodo believes this is all confusing for the customer, and something that needs to change.

Along with a branding refresh and what is likely to be an overhaul of the company’s month plan lineup (though we don’t know specifics at this point).

The big difference between Koodo’s updated business model and the other carriers is that when the subsidy balance is paid, the extra cost is removed from a customer’s monthly plan. At Bell, Rogers or TELUS, for example, buying a phone on a share plan costs $60 for unlimited calls and texts, with a sharable data bucket added to it. After two years, at which time a customer has ostensibly paid off the unsubsidized portion of the device, his or her plan doesn’t drop by $20 per month, which is the discount given to those bringing their own device. With this new Koodo Tab arrangement, the cost of the plan will be reduced by the amount one was paying per month in instalments.

The move isn’t particularly innovative – Eastlink has been doing it for a while now – but it speaks to a move towards greater transparency, and fewer gimmicks, within the Big Threes’ flanker brands.

Koodo will roll out the new Tab on April 19th.