Is buying an unlocked cellphone worth it?

Things seem to be looking up for Canadian wireless users.

Since 2007, they've had number portability so they can take their cellphone number with them when they switch providers.

A few months ago, Bell and Telus switched to the same technology that Rogers uses, so customers of all three can now take their new phone with them when switching, provided they can get it unlocked so that it can run on any network. And now, unlocked iPhones have arrived and are available directly from Apple.

Moving from one carrier to another, as long as you're not on a contract, has never been easier.

So can that unlocked iPhone — or any other unlocked device, for that matter — result in a better deal if the customer pits Bell, Rogers and Telus against each other? Not necessarily.

I set out to find such a deal last week, shortly after the unlocked iPhone 4 launched in Canada. Apple took the unusual step for a manufacturer of selling its device unlocked for full price in its own stores, giving customers the option of finding their own service plan without having to sign on to a multi-year contract with a carrier.

A locked phone is one that has been programmed to work only with one carrier, even though the device may be capable of running on other networks. It is legal for consumers to unlock phones through third parties, such as electronics shops, although doing so generally incurs an extra cost and can void the device's warranty.

The iPhone was a good device to use in a test because it can run on the networks of all three major providers, who also offer easily comparable service plans for it.

I'm currently a customer with Fido, one of Rogers' so-called flanker brands. My experiment involved visits to Bell and Telus stores in Toronto's Eaton Centre to see if I could get a better deal than what I was getting from Fido.

First up was the Telus store. I told the clerk that I had an unlocked iPhone 4, that I was a Fido customer and that I was curious about what Telus could offer me to switch. The clerk showed me a brochure that listed the standard iPhone rates, which started at $50. After adding in all the extras to equal what I was getting with Fido, including caller ID and extra text messaging, the monthly bill came out quite a bit higher.

I asked if Telus could go "off the rack rate" to convince me to switch, but the clerk declined. She said the company can do that for existing customers as a reward for staying loyal, but not for new customers. She did suggest calling Telus's customer service, which might be able to offer a better deal. More on that in a minute.

'We just don't price match'

Next up was the Bell store. It was a replay of what happened at the Telus store, except this time the clerk refused to go off the standard rates because, "We just don't price match."

I called Telus's customer service as instructed and, at first, the agent suggested I go into a store to try to get a deal. After I explained that I had been given reverse instructions and told her the details of my current Fido deal, she declined to offer a better deal.

"We would sure love to have another client but unfortunately the rate plans you see on our website are what's available," she said.

I asked her if there was any point to buying an unlocked phone, to which she replied: "I personally don't know why someone would want to do that unless they want to go from company to company and take their phone with them."

The Bell customer service agent I called told me he "had a great plan for me." He quoted a few offers that were actually better than Bell's official rates, but they still weren't more appealing than what I was getting from Fido. The reason was similar to what I heard in-store: that Bell just doesn't price match.

The original plan was to get competing offers from Bell and Telus, then see what Fido would offer, but it turned out I didn't even have any options to take to my current service provider.

That's not to say I came away empty-handed. I got, and am getting, a deal from Fido — not because of an unlocked phone, but because I'm not on a contract. When Wind Mobile started up in December, I called Fido and asked for a deal — and got it. I did the same when Mobilicity started in May, and again got more value for less money.

Along with what the Telus in-store clerk said, it appears that customers not on a contract can get a deal from their carrier as an incentive for staying.

Why buy unlocked?

So is there any point to buying an unlocked phone? I wondered if my experience was unique, so I sought out some other people who had bought an unlocked iPhone 4.

Josh Newman, a technology consultant in Toronto, had the same idea when he bought his. 

"I want to have that flexibility with all the new carriers coming on. I wanted to have that flexibility when my contract is up [in a year] to go out and see who can offer me the best deal," he says. "I knew that if I bought the locked one then I would be stuck with my contract being extended longer. If one of the carriers comes up with a more competitive plan … I just wanted to have that flexibility."

Newman says he'll also save money when he travels as he'll be able to pop in a SIM card from a carrier in whatever country he's in and pay local phone and data rates, as opposed to the higher roaming charges he'd incur from his Canadian provider.

'The market isn't yet mature.' —iPhone 4 buyer Bryson Gilbert

Lastly, by being unlocked, Newman says his iPhone will have a higher resale value. He'll likely want to upgrade to whatever device Apple releases next, so he'll be able to recoup some of his original investment by selling it to anyone around the world, not just in Canada.

Bryson Gilbert, a user experience designer in Toronto, also bought his device for its resale value and for the cheaper international roaming option. He travels to France several times a year and has racked up hundreds of dollars in data usage each time. With his unlocked iPhone, he says he'll be able to get a prepaid SIM card from a local carrier with three days of unlimited data for 10 euros.

Gilbert has a year left on his contract and plans to shop around for a plan when it's up. He's not surprised that carriers aren't enticing new customers with special deals just yet.

"The idea of being able to shop around for a local carrier is attractive but in practice it doesn't really amount to anything," he says. "The idea of customers owning their own hardware and choosing their carrier that way is new to Canada. The market isn't yet mature."

Newman says it's possible to get a deal, but you have to keep trying and hope you get lucky.

"It really depends on who you get on the phone. I just kept calling over the course of a couple of days and spoke to different reps at Rogers until I finally found someone who gave me the best deal," he says. "It sounds like an investment of time but when you multiply it over a number of years, if you're saving $20 or $30 a month, it really adds up."