Prepaid options dwindle in Canada as Bell and Rogers move prepaid to a single sub-brand

Omdia view

Summary

Bell and Rogers, two of the big three operators that make up most of the Canadian mobile market, have started changing prepaid. These changes will likely shift the overall composition of the Canadian mobile market towards even more postpaid than today.

Providers offering prepaid are beginning to dwindle

Changes in Canadian prepaid mobile have been afoot since last fall when Bell’s Virgin Plus brand stopped offering new prepaid activations as of September 30, 2024. Bell followed soon after by doing the same with Bell Prepaid, with no new activations as of December 31, 2024. Rogers would do the same with its Rogers Prepaid and Fido brands as of December 16, 2024, but this was pushed back to February 20, 2025.

These changes leave both Bell and Rogers with a single brand where customers can take prepaid plans (see Table 1). For Bell, this is Lucky Mobile. For Rogers, this is Chatr. So far, TELUS has not followed suit. It still offers prepaid plans through TELUS, Public Mobile, and Koodo brands.

Table 1: Big three operators’ prepaid, February 2025

Notes: * As of February 20, 2025

Source: Operators, Omdia

Both Bell and Rogers encourage affected customers to migrate to postpaid plans. Bell encourages customers to switch to a postpaid plan but also directs customers who still want prepaid to switch to Lucky Mobile. Before the prepaid closure date, Rogers encouraged Rogers Prepaid and Fido customers to switch to a postpaid plan but also directed customers to Rogers’s Chatr brand if they prefer to stick with prepaid. With Rogers Prepaid, in particular, Rogers encouraged customers to switch to a Rogers 5G postpaid plan. Now that the closure date has passed, both Rogers Prepaid and Fido websites simply direct customers to Chatr for prepaid.

However, there are some distinct differences between what Bell and Rogers are doing, too. For Rogers, things are simple: prepaid was discontinued through the Rogers and Fido brands. Customers who didn’t switch to a postpaid plan or Chatr for prepaid lost service on February 20. For Bell, they are no longer offering new prepaid activations with the Bell or Virgin Plus brands. However, existing prepaid customers on those brands can maintain their service. Despite this, Bell is no longer reporting the prepaid subscriptions for these brands.

Analyst view

Why is this happening?

One general reason to de-emphasize prepaid, as Bell and Rogers are doing, is to encourage migration to postpaid, as customers in this segment spend more and produce lower churn rates. For Canadian operators, migration to postpaid is another way to migrate to 5G. In Canada, prepaid has remained largely 4G.

Operators in Canada are surely keen to increase ARPU following years of declining wireless prices that started with a government directive in March 2020. At that time, the government set a target of reducing the cost of mid-range wireless plans by 25% over two years. The government reached its goal in January 2022, and the government reports prices have continued to fall. One reason is that Videotron is a stronger competitor after the Rogers-Shaw and Videotron-Freedom Mobile M&As. When wireless prices decline, directing customers to higher price tiers, like postpaid 5G plans, is a way for operators to combat this.

What else might follow?

With two of the big three operators moving in this direction, there is a good chance TELUS will follow suit. But whether TELUS follows or not, Bell and Rogers’ actions will likely impact the overall composition of the Canadian mobile market, shifting it to an even more postpaid-dominant one. Finally, reducing prepaid availability to fewer brands may be followed by a reduction in the plan offers by the operator’s brand that offers prepaid.

Appendix

Further reading

Canada: Service Provider Market Report – 2024 (September 2024)

Author

Kristin Paulin, Principal Analyst, Service Providers & Markets

[email protected]