Insights

Ofcom proposes bill on the practise of selling 'locked' phones

BILLMONITOR | JANUARY 31, 2020

To date, common practice by the mobile phone networks has been to ‘lock’ handsets sold to consumers and businesses on monthly contracts.

The primary reason given for this is to ensure that users make the required payments, including payments relating to the purchase of the handset. 

Locked mobile phoneWhile theoretically this makes sense, the locking of handsets has in fact created yet another hassle factor in the complicated maze of network switching. If a customer would like to switch networks at the end of their contract term they will, at a minimum, need to establish if the handset has been locked by the current network provider. The process has become less cumbersome in recent years, and several networks don’t block phones anymore, but it is a bit of a hit and miss situation and still creates a barrier to switching. 

Ofcom’s latest initiative is designed to end this procedural step, which, along with July 2019’s Text-to-Switch initiative and the upcoming “Contract End-Date Notification with Best Deal Recommendation” on 14 February 2020, will streamline the switching process. 

Billmonitor believes Ofcom needs to take it further and address the issue for businesses too. Porting multiple numbers and devices to a new network is a massive organisational undertaking for any firm, an issue that is compounded by large numbers of lines. To resolve this significant barrier to switching for SMEs and larger organisations, Billmonitor believes that the absolute minimum solution should be the phone automatically ‘unlocking’ at the end of the contract term, the best solution would be to have no locking at all. 

Klaus Henke, Managing Director of Billmonitor, said:

“We are hugely pleased to see Ofcom taking action on this issue and welcome the consultation. Consumers who purchase their handset through one network often worry that it will stop working if they switch providers as they are simply not aware of the unblocking possibility. This directly leads to consumers losing money, as they stay on their initial contract long after they have paid off the costs of their handset.

However, this proposed rule change must also apply to business and public sector organisations. We have recently helped an NHS service provider to switch over 1,000 connections and finding out if the phones are locked is incredibly time consuming, creating a real barrier to switching. . This needs to stop and we need to see a switching environment that empowers consumers and organisations.”

Full Ofcom announcement here.


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The Billmonitor team