Understanding Telus's new Premium Plus financing plan

Last week, Telus launched a new plan under the Premium Plus name.

At a time when many U.S. carriers are all-in on financing options, Telus's new Premium Plus plan is a hybrid system, providing customers a considerable subsidy in exchange for a two-year contract, along with flexibility in choosing to spend around $10 per month more on a plan in order to spend less for the phone upon purchase.

What is Premium Plus?

Premium Plus is the name of a new type of financing option offered by Telus, the second-largest carrier in Canada. It allows customers, new or existing, to add a small amount of money to their plans per month in exchange for paying less for the phone at the register.

How does it work?

It's actually quite simple. Telus's ordinary Your Choice share plans are priced based on the type of phone you buy: a premium smartphone, like a Galaxy S7; a smartphone, like a Moto X Play or other low-cost Android phones; and BYOD, where you bring your own device.

Premium Plus is interesting because it lives alongside the phone's subsidy, and is completely optional.

When you buy a premium smartphone, Telus subsidizes the cost by as much as $600, which allows you to buy it for considerably less than its retail price, in exchange for signing a two-year service plan. A Galaxy S7, for example, costs $900 when purchased outright, but $250 up front with a two-year plan, making the subsidy $650.

But $250 is still a lot of money to spend when you're also signing up for an expensive plan, so Telus decided to add the option of allowing customers to tack on an additional $10 per month to that two-year plan in order to lower the up front cost even further — in this case to $50.

So Telus is increasing the subsidy?

No. What it is doing is allowing you, the customer, to finance the cost of the phone over two years, by adding an additional $10 or so to your monthly bill. This is a system that Telus's flanker brand, Koodo, has had for some time.

Premium Plus is interesting because it lives alongside the phone's subsidy, and is completely optional. It allows you to buy a $900 Galaxy S7 for $50 up front.

Is Premium Plus only available for certain phones?

Yes, the Premium Plus model only works for phones that are already heavily subsidized, and fall under Telus's Premium Smartphone category. Devices that cost around $500 outright don't need Premium Plus because Telus is already subsidizing the vast majority of the phone's cost in exchange for a two-year service plan.

Tell me: Is Premium Plus a good deal?

Well, it's an interest-free loan, so yes. Telus isn't charging interest on the additional discount, it is just breaking a portion of the phone's unsubsidized cost into manageable monthly payments that are tacked onto the end of your monthly bill.

Is it a good deal? Well, it's an interest-free loan, so yes.

There doesn't appear to be a "downside," per se. It's a matter of figuring out whether you can stomach an extra $10 per month on your bill versus paying more for a phone at the time of purchase.

Which phones are compatible with Premium Plus

According to Telus, any phone in its Premium Smartphone category is compatible. Specifically, that includes:

• iPhone 6s / 6s Plus / 6 / 6 Plus / SE
• Galaxy S7 / S7 edge / S6 / Note 5 / S6 edge
• LG G5
• BlackBerry Priv

So should I go for it?

That's totally up to you, but like I said, there doesn't appear to be a catch or inherent downside to the deal. It's just a response to the weak Canadian Dollar, which has caused the price of handsets to rise.

Got a question about Telus Premium Plus plans or anything else to do with the Canadian market? Let us know in the comments!