Did you sell your cellular soul?
By Michelle Warren • Bankrate.com

When Garner Quain set out to cancel his cell phone last month, he figured he'd whip into a Bell store and do it in minutes. With high monthly bills and a resolution to trim superfluous spending, cancelling his costly service for a simpler life made sense. By the time he left an hour and a half later, there was steam coming out of his ears and the Toronto man joined the seemingly endless ranks of disgruntled cell phone users who relay their customer-service horror stories with such vehemence it makes you wonder if anyone is actually happy with their cell phone service provider.

"Although there were seven staff in the store willing to sell me anything, set up an account, etc., amazingly, none of them were 'authorized' to cancel my account," recounts Quain. "Figuring they had a straight line to the cancelation department, I asked one of them to dial from their phone. I sat in their store, for an hour and a half, on hold. I can only assume the cancellation department consists of one person, in a trailer, somewhere very remote."

In the end, he was told he had to provide 30 days notice to cancel his account or pay a $35 cancellation fee. As he owned his phone outright and wasn't on contract, he didn't have any months to pay out, but overall the experience left a bad taste in his mouth.

There was a time when cell-phone customers simply had to suck it up. With few reliable providers in Canada, there was little choice for those disgruntled users. But that's changing following the auction of wireless spectrum licenses in 2008 and the rise of a handful of new players aiming to dethrone established players, such as Rogers Communications Inc., Bell Canada Inc. and Telus Corp. The market is already heating up as those established players launch fresh brands (Koodo from Telus) and new cell-phone carriers, such as the much-anticipated Wind Mobile from Globalive, get in on the action.

With the rise in choice, does it pay to cancel your current plan and sign up with a new service provider? Read on to find out.

What kind of customer are you?
If you're a prepaid client without a contract, cancelling your service is not a big deal. You can do so at anytime simply by not topping up your minutes. If an account remains at zero balance for a specified time (usually 120 days), your services are terminated automatically.

It's when you're on a monthly plan that things become a little more complicated. As Quain discovered, most providers require 30 days notice to terminate service, even if you pay for usage a la carte. Ultimately, if you're switching providers, you want to plan ahead and ensure you're not responsible for paying for two service plans at the same time. Give your notice and arrange (ahead of time) for your new service to begin at the end of the 30 days. If you want to end things right away, you can usually pay your basic monthly fee to terminate.

If you're on contract, things are more complicated. This is usually the case when you take advantage of a great deal on a wireless device or bundled package in exchange for signing over your cellular soul for 12, 24 or 36 months -- the longer the term, the less expensive the phone or bundle.

Wireless carriers subsidize the cost of your phone not because they are kind but as a customer retention strategy. The idea is to recoup the costs over the period of your contract. As a result, if you end that contract early, wireless carriers need to cover the cost of the subsidized phone and any other special deals they put on the table to entice you to sign on for the long run. Early Cancellation Fees, or ECFs, vary and are not meant to be negotiable, which is why it's important to understand what your financial obligations are before attempting to switch carriers. In some cases, the added fees may far outweigh any potential monthly savings. Keep in mind that if you have more than one phone, such as with a family plan, the ECFs apply to each phone.

"Customers who cancel their voice-only, data-only or voice and data service before the end of their service agreement term are all subject to the same ECF policy," says Rogers spokeswoman Andrea Sardinha. "In most cases, ECF on voice is $20 times the number of months remaining in term with minimum fee of $100 and maximum fee of $240 for one-year term agreements and up to $400 for two- and three- year term agreements."

If you have a smart phone with a data plan, expect to pay even more in the form of a Data Early Cancellation Fee, or DECF, which at Rogers is the greater of $25 or $5 per month remaining on the contract.

Bell also charges consumers the greater of $100 or $20 for each month left in the voice contract, capped at $400, while Telus charges $20 per month and Virgin charges $10 per month. Wind Mobile is setting itself apart by not having contracts -- it sells the phones at cost and customers can opt for prepaid or postpaid monthly billing.

Change in the air
Michael Janigan, executive director of the Ottawa-based Public Interest Advocacy Centre, says the December launch of Wind Mobile was a significant step in changing Canada's wireless market. While ECFs were traditionally used to handcuff consumers to their providers, with a new player acting as a maverick and offering something completely different, contracts may no longer do the trick. "The terms of the existing contracts are not going to be significant impediments," says Janigan. While the business used to be about sales and landing the customer, with customer service being a lower priority, things are going to have to change.

"Not only is Wind very price competitive, but they're also simplifying the arrangement ... they've done the research and lined up their offers with what is generally popular with consumers," says Janigan, who refers to the plans as plain vanilla or all-you-can-eat.