• DSRF, ADSRF, Economic Inducement and Service Deactivation fee? come again?

    by
    Treatz
    Published on 01-24-2012 03:30 PM
    8 Comments Comments
    Rogers new Cancellation policy went live, and from what I can gather it's a hot mess.
    I was also reading this on Mobile Syrup.

    let's have a look:
    *Device Savings Recovery Fee (DSRF)
    * Economic Inducement
    *Additional Device Savings Recovery Fee (ADSRF) this one is the crown jewel
    *Service Deactivation Fee of $12.50 excluding Quebec / Manitoba

    So basically, we all thought that you'd have to pay the subsidy back. Seemed Fair right? Wait there's more!
    There's the ADSRF fee now which seems like on top of the subsidy of the phone, there's an additional fee to be paid back for Data. Even though the phone required a data package in the first place to get the subsidy you'll have to pay an additional cancellation fee on top.

    What?
    Device Savings Recovery Fee (applicable to term commitment customers only for any new term entered into on or after January 22, 2012)

    A Device Savings Recovery Fee (DSRF) applies if you have been granted an Economic Inducement (as defined below) upon entering your new term, and if, for any reason, your wireless service or your new term is terminated prior to the end of the term of your Service Agreement (Service Agreement Term). The DSRF is the amount of the economic inducement (which may take the form of a discount, rebate or other benefit granted on the price of your Equipment), as stated in your Service Agreement (Economic Inducement), less the amount obtained by multiplying such Economic Inducement by a fraction representing the number of months elapsed in your Service Agreement Term as compared to the total number of months of your Service Agreement Term (plus applicable taxes). In other words, DSRF = Economic Inducement - [Economic Inducement x (# months elapsed in your Service Agreement Term ÷ Total # months in your Service Agreement Term)] + applicable taxes. An Additional Device Savings Recovery Fee (ADSRF) also applies if, for any reason, your wireless data service, or your data plan's commitment term (Data Term), is terminated prior to the end of your Data Term. The ADSRF is the additional Economic Inducement you received for subscribing to your wireless data service, less the amount obtained by multiplying such Economic Inducement by a fraction representing the number of months elapsed in your Data Term as compared to the total number of months of your Data Term (plus applicable taxes), and applies in addition to the DSRF for termination of your Service Agreement. If you subscribe to a plan combining both voice and data services, both the DSRF and the ADSRF apply, up to the total Economic Inducement.

    Service Deactivation Fee (applicable to term commitment customers only for any new term entered into on or after January 22, 2012)

    Not applicable to Residents of Québec or Manitoba: A Service Deactivation Fee of $12.50 per line applies if, for any reason, your wireless service is deactivated prior to the end of your Service Agreement Term. This fee is in addition to any applicable DSRF or DSRF and ADSRF.

    Applicable only to Residents of Québec or Manitoba: If your wireless service is deactivated prior to the end of your Service Agreement Term and there is no Economic Inducement stated in your Service Agreement, then you will be charged a Service Deactivation Fee. The Service Deactivation Fee is an amount permitted under provincial legislation, being the lesser of $50 or 10% of the monthly service fees for the services that you have subscribed to on a Service Agreement Term and Data Term, as applicable, but not provided as of the termination date (plus applicable taxes).

    Sound off, what are your thoughts?
    This article was originally published in forum thread: DSRF, ADSRF, Economic Inducement and Service Deactivation fee? come again? started by Treatz View original post
    Categories:
    1. Commentary and Analysis
    Comments 8 Comments
    1. B407's Avatar
      B407 - 01-24-2012, 08:45 PM
      The DSRF is essentially the voice subsidy and the ADSRF is essentially the data subsidy. When customers activate a smartphone with a subsidy, the data subsidy is often much larger then the voice subsidy. If a customer chooses to cancel their data plan after activating their device they'll be hit with a pretty hefty ADSRF. This is designed for Rogers to protect their revenues. Under the old system, customers could cancel their data packages for only $100 while being able to save up to 500 dollars on smartphone devices. If a customer chooses to cancel their Rogers services alltogether their DSRF and ADSRF would never equal more then the unsubsidized price of the phone.
      Reply
    1. Howmander's Avatar
      Howmander - 01-25-2012, 01:21 AM
      Wow thanks, B407, that was a way clearer explanation than the original post! Anyway, I think it would just be easier (not cheaper though!) to just buy phones outright from now on, lol!
      Reply
    1. cheenachatze's Avatar
      cheenachatze - 01-25-2012, 08:54 AM
      Service deactivation fee? System access fee? What next? Rogers will charge me System De-access fee for the rest of my life, for not being their customer?
      Reply
    1. theworldiam's Avatar
      theworldiam - 01-25-2012, 12:19 PM
      Most of us have smartphones implying BOTH voice AND data. So, cancellation of my SP's voice/data 36-month new-EI policy contract, i.e., DSRF plus ADSRF with 10 months left to go (with an EI of $480), would actually cost me more than the $200 I would have to pay off with my current non-EI contract!
      Under my current contract, I would pay $200 for V/D cancellation! With EI, that would now be $266!
      I am getting NO deal here when I renew, as the new policy overwrites my old!
      So, even though it may not be cheaper to buy the handset of your choice, it definitely could be more satisfying!
      But, do I take the chance and buy the $600 SP I truly love at the Pacific Mall, cash, no taxes, and hope it's legit – and works for at least 29 months (that's when I would break almost $200 even on my current contract compared to EI)? Or, do I take the EI and learn to really love the $100 SP I got at my provider, break my new 36-month EI contract after 29 months, pay $200 and get another $100 new phone with a new contract?
      It may sound like a no-brainer, but is it really? I don't have the answer except to say it's my dollar to spend as wisely as I think and additionally to ask that we lobby for some real V/D cost changes from the CRTC! I know the providers need to make money they put into creating the service infrastructure, but does it have to be "overnight"?!
      Reply
    1. B407's Avatar
      B407 - 01-25-2012, 07:03 PM
      I don't see how you arrived at that calculation. If you received an economic inducement of $480 by signing up with a 3 year contract and you wanted to cancel when there are 10 months left to go this is what you would be paying:

      Old system:

      Voice ECF: $20 x number of months left on term with a minimum charge of $100 and a maximum charge of $400

      $20 x 10 months = $200

      Data ECF: $5 x number of months left on term with a minimum charge of $25 and a maximum charge of $100

      $5 x 10 months = $50

      Total cancellation fees: $250

      New system:

      Lets assume the $480 subsidy is divided like this: $50 for the DSRF and $430 for the DSRF (I use this assumption as this is the way it is done for most handsets that rogers offers).

      How cancellation fees are calculated under the new system:

      (DSRF / number of months in the agreement) x the number of months left in contract

      PLUS

      (ADSRF / number of months in the agreement) x the number of months left in contract

      PLUS

      SDF: $12.50

      Therefore :

      (50/36) x 10 = $13.89

      (430/36) x 10 = $119.44

      SDF= $12.50

      Total ECF: $13.89 + $119.44 + $12.50 = $145.83

      Your cancellation fee would actually be around $100 cheaper with the new system.

      There are scenarios where cancellation can be more expensive under the new system, however the new system is not supposed to save customers money is designed to be more fair. Customers sign up on long term agreements to save a certain amount on a device. This way customers can cancel their agreements and ensure they don't pay penalties that exceed the savings they received on the phone. In addition, it makes it more unattractive for customers to cancel their data plans therefore ensuring that the carrier receives the revenue that the customer promised to provide for the length of the agreement.
      Reply
    1. theworldiam's Avatar
      theworldiam - 01-26-2012, 01:14 AM
      Quote Originally Posted by B407 View Post
      I don't see how you arrived at that calculation. If you received an economic inducement of $480 by signing up with a 3 year contract and you wanted to cancel when there are 10 months left to go this is what you would be paying:

      Old system:

      Voice ECF: $20 x number of months left on term with a minimum charge of $100 and a maximum charge of $400

      $20 x 10 months = $200

      Data ECF: $5 x number of months left on term with a minimum charge of $25 and a maximum charge of $100

      $5 x 10 months = $50

      Total cancellation fees: $250

      New system:

      Lets assume the $480 subsidy is divided like this: $50 for the DSRF and $430 for the DSRF (I use this assumption as this is the way it is done for most handsets that rogers offers).

      How cancellation fees are calculated under the new system:

      (DSRF / number of months in the agreement) x the number of months left in contract

      PLUS

      (ADSRF / number of months in the agreement) x the number of months left in contract

      PLUS

      SDF: $12.50

      Therefore :

      (50/36) x 10 = $13.89

      (430/36) x 10 = $119.44

      SDF= $12.50

      Total ECF: $13.89 + $119.44 + $12.50 = $145.83

      Your cancellation fee would actually be around $100 cheaper with the new system.

      There are scenarios where cancellation can be more expensive under the new system, however the new system is not supposed to save customers money is designed to be more fair. Customers sign up on long term agreements to save a certain amount on a device. This way customers can cancel their agreements and ensure they don't pay penalties that exceed the savings they received on the phone. In addition, it makes it more unattractive for customers to cancel their data plans therefore ensuring that the carrier receives the revenue that the customer promised to provide for the length of the agreement.

      I am with Fido. The EI could be any amount, but let’s leave it at $480, as I based it on a 32GB 4S purchased for $269 on January 21, 2012, its full price being $749. $400 is the average EI for a SP.
      My Voice ECF: $100 or $10/mth., whichever is more, to a maximum of $300. So, with 11 months left in a 36-month contract, I’ll pay $110; with 10 months, I’ll pay $100.
      My Data ECF: $100 or $10/mth., whichever is more, to a maximum of $200. So, if I were to cancel with 9 months left, I’d still pay $100, not $90. (With 11 months, I’d pay $110.)
      So you see, 10 months is the magic number for me and my TOTAL ECF is $200 + taxes if I were to cancel in 10 months or less. The following implies I’m cancelling in month 26 of a 36-month contract.

      With my pre-January 22, 2012 policy:
      Voice & Data ECF = $200 x 13% taxes = $226

      Under the new policy, if I were to cancel my 36-month contract with 10 months left in my contract:
      DSRF = Economic Inducement – [Economic Inducement x (# months elapsed in your Service Agreement Term ÷ Total # months in your Service Agreement Term)] + applicable taxes
      EI = $480
      # of months elapsed in service = 26
      # of months as per SA = 36
      DSRF = $480 – [$480 x (26/36)] + 13% taxes
      DSRF = $133.33 + taxes = $150.66

      ADSRF:
      As it’s the same formula for the DSRF, it is also $150.66

      (If you subscribe to a plan combining both voice and data services, both the DSRF and the ADSRF apply, up to the total Economic Inducement.)

      Where you went horribly wrong: The statement above, and mathematical rules, are quite clear and NO ASSUMPTIONS ARE NECESSARY. You made assumptions and you came up with a formula all your own; no where in the formula does it state you must divide dollars by time.

      Let’s not forget the SDF per line, which = $12.50 (and probably subject to tax too, but I am not adding any, although there very likely is!).

      So, my new-policy ECF would be = $150.66 + $150.66 + $12.50 = $313.82

      Difference compared to my pre-January 22, 2012 policy: $87.82. I stand corrected; I am actually paying more than I initially calculated!

      You are right in one sense though. With the same EI of $480, I could now break my contract after just 6 months and pay a $400 + taxes ECF, as opposed to paying a $500 + taxes ECF (as per pre-new policy).

      Keeping the EI at $480, to keep my new ECF almost the same as my old-contract 10-month ECF penalty of $226, I’d now have to break my contract with just 7 months left to get a comparable $223.33 ECF. So once again, the CRTC-protected big telcos have come up with another winning formula – for themselves. Brilliant! The States charges ~$100 more for a device, but they’ve got 2-year contracts; a win for their customers. When will we have real competition and eliminate the joke called the CRTC?!

      And please, don’t get on about the “morals” of breaking contracts!

      I’ll have to work the “magic” month that I can cancel as per the new policy to get the best “deal” for me.
      Reply
    1. GrenaDeD's Avatar
      GrenaDeD - 01-26-2012, 03:08 AM
      The Economic Inducement consists of a portion for taking a voice contract AND another portion for taking a data contract.
      DSRF is for the voice portion of your plan and ADSRF is for the data portion of your plan.

      Using you example of 32GB 4S purchased with 3 year voice and data plan, your voice EI is $50 and data EI is $430. TOGETHER the EI is $480. The reason for this is Rogers/Fido does not want subscribers to purchase a smartphone and cancel the data afterwards, hence the larger EI for the data.

      So, using the formula on the agreements and based on your scenario of having 10 months left in your contract: (taxes ignored)

      DSRF = $50 – [$50 x (26/36) = $13.89

      ADSRF= $430 – [$430 x 26/36] = $119.44

      SDF: $12.50 (if you are cancelling your line)

      Total ECF: $13.89 + 119.44 + 12.50 = $145.83

      So B407 is actually right. Your cancellation fee would actually be around $100 cheaper.

      Oh one more thing, do you want to know why the numbers are the same as how B407 calculated?

      Because this formula: ($430/36) x 10 = $119.44
      (EI/ total months in the agreement) x number of months remaining in the agreement

      is just the simplified version of this: $430 – [$430 x 26/36] = $119.44

      Hope this helps.
      Reply
    1. dinh_hai_tran's Avatar
      dinh_hai_tran - 01-26-2012, 03:33 PM
      Rogers is crazy, I got an Ph.D. in Science but when I read stupid Terms&Conditions from Rogers' contract... Possibly written by Lawyers... Don't understand at all... Whenever you want to say to Rogers you need a lawyer. The more Rogers confuses you the more Rogers get your money... Period. That's the whole point of Rogers' T&C. Why don't just simply say... How much that person gets subsidy (doesn't matter Voice or Data) divided by 36 (three years) multiply by # of month left on the contract. So that's it. No wonder I left Rogers 2 years ago... And feel very happy...
      Reply