Vodafone relents on mobile lock

Commerce Commission pressure allows level playing field for new entrants

Last updated 19:53 27/05/2008
PHOTO/GABRIELE CHAROTTE
The Commerce Commission has shown Vodafone the key to the future.

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Vodafone has backed off a controversial decision to lock its mobile handsets under pressure from the Commerce Commission.

Telecommunications commissioner Ross Patterson told The Independent Financial Review he had expressed concern about Vodafone's "intentions". The mobile firm had said it would charge $50 to unlock new handsets from April if people wanted to shift to another mobile provider in New Zealand or use a provider other than Vodafone for overseas roaming.

This would mean users could not put a SIM card from another mobile provider into their Vodafone phone without incurring a charge.

"Vodafone's move was potentially a major competitive barrier to a new entrant, and they [Vodafone] reconsidered and chose not to proceed," Patterson said.

It was speculated Vodafone changed its policy of selling unlocked phones to make it harder for NZ Communications, which is launching at the end of the year, and Telecom, which is launching a GSM network.

The commission raised preliminary concerns in "informal discussions"with Vodafone and came to an agreement last week.

"There is no benefit to consumers, to the parties or commission, to get involved in a long, convoluted process if things can be resolved quickly," Patterson said.

There were some overseas jurisdictions that allowed handset locking depending on the competitiveness of the market, but it was not appropriate in New Zealand.

Analysts believe NZ Communications will target Vodafone customers with cheap calling deals to bring their unlocked phones to the new NZ Communications network.

It is understood Telecom will be more focused on attracting people with subsidised handsets procured through its new deal with global mobile phone distributor Brightstar.

Telecom general manager of mobile Martin Butler said the company would not lock handsets on its new GSM network.

"We want our customers to choose to be with us for the value and services we offer, not because we've locked their handsets to our network. The handsets when purchased belong to our customers and from our perspective they're free to use them as they see fit."

Vodafone sparked outrage among consumers when it announced plans to lock handsets.

Its line was that the phones would be locked to protect its customers' experience of the Vodafone brand and services.

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Phone locking is legal in most countries with more than five mobile operators, and is common in Europe, Asia, the United States and Australia. Most operators charge a fee for having a phone unlocked.

- The Independent

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