Should the UK move to make handsets unlocked — like Chile has done?

The one key benefit of handset subsidies is that it does make the decision a lot easier or cheaper than it would otherwise ordinarily be. I’m certain that — from one point of view — handset subsidy has been highly beneficial to the evolution of the wireless industry in the UK.

However — and it’s a big however — it’s distorted the market completely and made the business of competition a little bit more challenging. When most operators have at least 50% of their customers locked away on multi-year contracts, the incentive to do anything resembling innovation is limited. Yes, when there’s a bit of pain at the end of the contract when you have to give a few hundred extra minutes to a bleeting customer to avoid them churning, but that’s nothing when compared to actually having to get off your arse and run a successful change programme.

So should the UK do ‘a Chile’? They’ve mandated that every handset sold must now be unlocked so it can be used on any carrier.

This removes one of the primary retention strategies for contract customers. That could only be good for the market, surely?

What do you think?

The Republic of Chile has announced that all cellphones sold within the country starting last Monday, January 2nd, must be unlocked for use on any carrier.

via All cellphones in Chile must be sold unlocked from January 2nd | The Verge.

 

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7 Responses to Should the UK move to make handsets unlocked — like Chile has done?

  1. Anonymous January 6, 2012 at 3:37 pm #

    Oh come on Ewan! Claiming that requiring handsets to be sold SIM-unlocked is akin to ‘banning handset subsidies’ is utter, utter bollocks.

  2. Ewan January 6, 2012 at 3:47 pm #

    I accept that’s certainly a viewpoint — however isn’t the handset subsidy *AND* the issue of unlocking inextricably linked?

  3. Ewan January 6, 2012 at 3:51 pm #

    (Jakdaw — I updated the headline to remove the word subsidies as you’re right)

  4. Antoine RJ Wright January 6, 2012 at 3:51 pm #

    Sometimes, just someitmes, I think the US should. Then I smack myself and rethink it better…

    Subsidies should be allowed, but carriers should be mandated by govs/comms to offer device-reduced costs for on-contract services for those that skip the subsidy. And both methods of purchasing should get equal advertising time.

    That would do better to make a smarter consumer, even if it means that market effects will mean that subsidized devices+contracts would eventually phase out.

  5. Anonymous January 6, 2012 at 4:02 pm #

    I’d probably argue not – although with a big exception for prepaid subsidies, which are much lower anyway, and perversely generally for handsets where unlocking is cheaper & easier anyway (eg Orange San Fran).

    Does requiring that the handset is unlocked actually solve the problem? Unless you’re talking about iPhones (where carrier specific information comes from Apple) then you’d also have to require that one carrier selling a handset includes all their competitors’ APN information to be included in order for network-changes to become mass-consumer friendly. And you’re probably still left with a handset with a bunch of branded uninstallable crap installed on it (although I suppose that’s no different to the situation before changing networks).

  6. nacho January 6, 2012 at 4:45 pm #

    Is O2 the only UK carrier that sells unlocked phones on contract? Yes, I think all phones should be sold unlocked. 
    And regarding the crapware pre-loaded by the mobile carrier, that should be illegal too. Can anyone explain how does a carrier benefit from the branded crapware? Do people actually use any of that? Is crapware a consequence of the carrier subsidies? Can the user have the choice to remove it? 

  7. Adrian January 6, 2012 at 5:10 pm #

    Operators should be able to lock them on PAYG, but I never understood what the operators hope to gain by locking contract phones.

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