UK Telecoms Regulator Plans to Ban Sale of Locked Mobile Phones to Make Switching Networks Easier

[MacRumors]

U.K. telecoms regulator Ofcom has drawn up plans to ban the sale of locked smartphone handsets that can't be used on other mobile networks until the owner pays for them to be unlocked.

The proposal is part of a consultation document published today that aims to achieve fairer treatment and easier switching for broadband and mobile customers in the U.K. The document reads:

Some providers sell locked devices so they cannot be used on another network. If customers want to keep using the same device after they switch, this practice creates additional hassle and can put someone off from switching altogether. We are proposing to ban the sale of locked mobile devices to remove this hurdle for customers.

Ofcom notes that, currently, BT Mobile/EE, Tesco Mobile and Vodafone sell devices that are locked and cannot be used on other networks until they are unlocked. Meanwhile, O2, Sky, Three and Virgin Mobile choose to sell unlocked devices to their customers.

The regulator's research found that just under half of mobile customers experience some sort of problem, such as a long delay before getting the code they need to unlock their device, being given a code that doesn't work, a loss of service if they didn't realize their device was locked before they tried to switch.

Meanwhile, to make broadband switching easier, Ofcom plans to require a customer's new broadband provider to lead the switch, and offer a seamless switching experience, regardless of whether they are moving across different fixed networks (for example, between Virgin Media and a provider using the Openreach network) or between providers of ultrafast broadband services on the same fixed network. The plan comes as there are currently no regulated processes in place for these types of switches.

If the consultation period goes smoothly, the proposals could become law in the first quarter of 2020 or 2021. The plans are a response to changes to the European regulatory framework. The Government consulted earlier this year on how to reflect these changes in UK law.

Article Link: UK Telecoms Regulator Plans to Ban Sale of Locked Mobile Phones to Make Switching Networks Easier

 

[Manatlt]

Do it. So I can freely buy iPhones from any network

 

[markhort]

I 100% approve this change, it's about time Ofcom looked into this.

 

[KrisLord]

Phone unlocking hasn’t been a huge issue for a while now, lots are sold unlocked and those locked can be unlocked promptly.

I think the unintended consequence of this could be a lack of competition on cheap handsets.

today networks can undercut each other on cheap handsets by locking the device to their network. Without this someone would buy a cheap phone from one network and use immediately on another.

 

[genovelle]

Phone unlocking hasn’t been a huge issue for a while now, lots are sold unlocked and those locked can be unlocked promptly.

I think the unintended consequence of this could be a lack of competition on cheap handsets.

today networks can undercut each other on cheap handsets by locking the device to their network. Without this someone would buy a cheap phone from one network and use immediately on another.

You are right. That kills the incentive to discount the device or brings back 2 year contract lock ins. Everybody wants something for nothing, but wants to keep all the benefits.

 

[dave61]

If the consultation period goes smoothly, the proposals could become law in the first quarter of 2020 or 2021.

As the UK is leaving the EU it won't have to implement the European regulations. Will be interesting to see if this measure survives.

 

[jlwarlow]

We wouldn't need this change if companies unlocked quickly and free (lots unlock for free out of contract but not everyone). Unfortunately the fact companies make unlocking difficult and charge is precisely the reason we need it. I'll still use 2 year contracts for my phones so unlocking won't really benefit during the contract but will increase the resale value of my phones.

 

[dubnde]

If the consultation period goes smoothly, the proposals could become law in the first quarter of 2020 or 2021.

As the UK is leaving the EU it won't have to implement the European regulations. Will be interesting to see if this measure survives.

I am made to understand most regulations are gonna get adopted in to UK regulations unless they have to be specifically change.

 

[Ridge Racer]

I've never understood why networks feel the need to lock contract phones anyway. If you've entered into a contract with the network, you're still obligated by law to pay off the contract even if you immediately choose to use the phone on another network. The network gets their money regardless.

 

[SnowLucas]

I've never understood why networks feel the need to lock contract phones anyway. If you've entered into a contract with the network, you're still obligated by law to pay off the contract even if you immediately choose to use the phone on another network. The network gets their money regardless.

If they had a mid contract price rise (which is not uncommon) you’d be able to leave the contract without penalty. I presume their argument would be they lock phones to allow them to discount them or move some of the upfront cost into the monthly payments without later losing out if you find a way to end your contract early.

Not all providers do it so it would be interesting to see if there is a difference between ones that do and ones that don’t in terms of overall cost of contract including phone. This law change would obviously stop this variation if it actually exists.

 

[Shanghaichica]

O2 and 3 already sell unlocked phones.

 

[JRobinsonJr]

We wouldn't need this change if companies unlocked quickly and free (lots unlock for free out of contract but not everyone). Unfortunately the fact companies make unlocking difficult and charge is precisely the reason we need it. I'll still use 2 year contracts for my phones so unlocking won't really benefit during the contract but will increase the resale value of my phones.

I concur, but there is at least one scenario where locked phones are a problem: international travel. When in my home country (or home service area) it's not an issue, but if I travel somewhere else a locked phone eliminates my option to purchase an inexpensive local SIM. For me that is unacceptable. Yes, that scenario doesn't impact the majority of consumers, but it's still an issue.

 

[CarlJ]

If you've entered into a contract with the network, you're still obligated by law to pay off the contract even if you immediately choose to use the phone on another network. The network gets their money regardless.

If you're "merely" obligated to pay off the contract, there's still the pesky matter of collecting that money, and not everyone steps up to do what they're supposed to do. With the phone locked, they can give you a powerful incentive to get you to pay, quite effortlessly (flip one bit in your account and your phone stops working, and you can't just take it elsewhere). If you don't voluntarily pay immediately (most, of course, pay their bills on time), it costs them money to collect - anywhere from pennies of lost interest if you pay late, to much more if they have to take you to court. I can understand why they want to lock phones. Chalk it up to a few bad apples ruining it for everyone.

Think in terms of, if you get a loan to buy a car or a house, the contract allows the lender to repossess said car or house, if you fail to make payments. Cars and houses are relatively easy to locate, and relatively easy to take back - it costs them money to do so, but only a small fraction of the total value (cars and houses tend to be worth tens or hundreds of thousands, respectively, rather than mere hundreds). Without technical means, repossessing a phone wouldn't go nearly so well - it would be much harder to find and get back (it's not like you leave your phone sitting out on the street overnight). Most people have their phone in a pocket or purse most of the time - imagine the altercations that would take place if a repossessor tried to physically take your phone away. Imagine the legal ramifications and court costs. They'd lose more than the value of the phone, just getting it back. It literally wouldn't pay to get the phones back. So they'd stop trying, and soon people would realize this and take advantage of it.

So, yeah, I can totally see them having reasons why they want to lock phones. Now, there have also been numerous situations in the past (don't know how prevalent it is now) where they try to keep the phone locked once it's paid off. I'd guess the notion here is if you don't know how to get it unlocked (even if it's just asking them) or if it's a pain to do, you'll be more likely to sign a new contract with them rather than getting it unlocked and going elsewhere. That, appears to be a pretty slimy practice.

 

[jent]

I've never understood why networks feel the need to lock contract phones anyway. If you've entered into a contract with the network, you're still obligated by law to pay off the contract even if you immediately choose to use the phone on another network. The network gets their money regardless.

It also limits the used phone market. Since a limited portion of all cell phone consumers would actually want the phone locked to your carrier, you have a smaller audience to sell to and buyers have a smaller pool to buy from. Hence why, in my opinion, so many people do carrier trade-ins or just throw their old phone in a drawer and forget about it.

 

[victorm1]

Won’t this just make the cost of phones skyrocket for consumers?

 

[Mr_Brightside_@]

Won’t this just make the cost of phones skyrocket for consumers?

No. We have this in Canada. Our phone plans have never been particularly well priced, but when this was instituted, nothing changed.

 

[akidd]

Won’t this just make the cost of phones skyrocket for consumers?

No, it’s only designed to make it easier to move and not have to pay a fee (Tesco is £10 under some circumstances), it’s like the Text to move that came in the other month.

 

[victorm1]

No. We have this in Canada. Our phone plans have never been particularly well priced, but when this was instituted, nothing changed.

I’m in Canada myself, I’m pretty sure my phone is locked to Bell. Even if it’s not software-level locked, I can’t leave my provider regardless.

 

[gstevie]

If the consultation period goes smoothly, the proposals could become law in the first quarter of 2020 or 2021.

As the UK is leaving the EU it won't have to implement the European regulations. Will be interesting to see if this measure survives.

It’s right there in the next part of the paragraph you quoted:
“The plans are a response to changes to the European regulatory framework. The Government consulted earlier this year on how to reflect these changes in UK law.”

 

[TheIntruder]

Nice to see at least one nation has a communications regulatory agency that works to serve the interests of the people, and not the industry.

 

[dave61]

It’s right there in the next part of the paragraph you quoted:
“The plans are a response to changes to the European regulatory framework. The Government consulted earlier this year on how to reflect these changes in UK law.”

Perhaps you do not understand that the European Regulatory Framework is a product of the EU. As Britain is now leaving the EU that framework will not* apply.

*probably, it's complicated by the future relationship agreement which is yet to be negotiated.
[automerge]1576664223[/automerge]

I am made to understand most regulations are gonna get adopted in to UK regulations unless they have to be specifically change.

That is simply the mechanics. The question is how much of EU regulations the UK will be agree to maintain compliance with.

The new Gov't maintains that a wide-ranging deal will be complete by the end of 2020. The EU position is that is only possible if the UK agrees to a high level of compliance. However, a high-level of compliance is at odds with other UK Gov't promises. Something has to give.

 

[Mr_Brightside_@]

I’m in Canada myself, I’m pretty sure my phone is locked to Bell. Even if it’s not software-level locked, I can’t leave my provider regardless.

If you were to change carriers, the CRTC mandates that it be unlocked for free (yes, it is likely locked currently):

Protected by the Wireless Code | CRTC

crtc.gc.ca

 

[victorm1]

If you were to change carriers, the CRTC mandates that it be unlocked for free (yes, it is likely locked currently):

Protected by the Wireless Code | CRTC

crtc.gc.ca

I mean that the contract cancellation fee would be greater than the cost of a new iPhone anyway.

 

[gstevie]

Perhaps you do not understand that the European Regulatory Framework is a product of the EU. As Britain is now leaving the EU that framework will not* apply.

*probably, it's complicated by the future relationship agreement which is yet to be negotiated.
[automerge]1576664223[/automerge]

That is simply the mechanics. The question is how much of EU regulations the UK will be agree to maintain compliance with.

The new Gov't maintains that a wide-ranging deal will be complete by the end of 2020. The EU position is that is only possible if the UK agrees to a high level of compliance. However, a high-level of compliance is at odds with other UK Gov't promises. Something has to give.

I understand. I understand that the regulator is a UK regulatory body, not the EU. They specifically mention the UK government is looking at how to implement this - not only if the UK stays in the EU. It may not happen but it’s not dependent on Brexit.

 

[dave61]

I understand. I understand that the regulator is a UK regulatory body, not the EU. They specifically mention the UK government is looking at how to implement this - not only if the UK stays in the EU. It may not happen but it’s not dependent on Brexit.

If the UK was staying in the EU, the UK regulator would have to implement the principle decided by the EU regulator. Obviously that constraint no longer applies.