Skinny Mobile to partake in SIM locking - 2degrees seeks Commerce Commission Action

Forums › Spark New Zealand (including Skinny and BigPipe) › Skinny Mobile to partake in SIM locking - 2degrees seeks Commerce Commission Action

P1n3apqlExpr3ss

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#94381 9-Dec-2011 13:03

"Back in November plans for Telecoms new budget and youth-aimed Mobile service, Skinny Mobile leaked out in the series of webpages since taken down. Cached pages revealed that there were also plans to SIM lock phones. This basically means that the phone can only be used with that carrier, in this case Skinny Mobile. It also means that were the Skinny Mobile customer to roam overseas that would be forced to pay excessive roaming charges instead of being able to use an overseas network for the duration of the trip.

Today The Dominion Post (courtesy of Stuff) has printed an article that new Skinny Mobile phones will be SIM locked for nine months. After this time they will no longer be SIM locked. If consumers will want to unlock their phones earlier they will have to pay a $30 unlocking fee."

Read more: http://www.androidmobile.co.nz/recent-news-list/item/1005-skinny-mobile-to-partake-in-sim-locking-2degrees-seeks-commerce-commission-action

Thoughts? Could be damaging for Telecom if the CC regard it as anti-competitive behaviour

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#555891 9-Dec-2011 13:22

Meh, I don't know what all the fuss is about. If you don't want a locked phone then go somewhere else, it's not like we are short of choices.

As I see it TC are trying to offer a budget service, and it appears the only way that can do that and make it profitable (companies don't do something to make a loss) is to ensure the customers stay with that service for a certain period of time. I reckon they ought to be given a medal for a bit of lateral thinking to provide a cheaper alternative to their main TC network.

If you want cheap, then there are sacrifices to be made, and I don't think 9 months is that long. It's no different to joining an ISP or Sky for a fixed period of months with cancellation fees if you leave early...but don't see too many headlines about any of those deals.

If the CC become involved, IMO it would be nothing more than bureaucratic meddling in a now private business. Nanny state gone mad yet again.

I look forward to the alternative arguments :-)

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codyc1515

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#555900 9-Dec-2011 13:41

scuwp: Meh, I don't know what all the fuss is about. If you don't want a locked phone then go somewhere else, it's not like we are short of choices.

As I see it TC are trying to offer a budget service, and it appears the only way that can do that and make it profitable (companies don't do something to make a loss) is to ensure the customers stay with that service for a certain period of time. I reckon they ought to be given a medal for a bit of lateral thinking to provide a cheaper alternative to their main TC network.

If you want cheap, then there are sacrifices to be made, and I don't think 9 months is that long. It's no different to joining an ISP or Sky for a fixed period of months with cancellation fees if you leave early...but don't see too many headlines about any of those deals.

If the CC become involved, IMO it would be nothing more than bureaucratic meddling in a now private business. Nanny state gone mad yet again.

I look forward to the alternative arguments :-)

Thats like saying: Meh, I don't know what all the fuss is about. If you don't want to get killed in South Auckland then go somewhere else, it's not like we are short of choices. It doesn't make it O.K.

With that said the only reason to have SIM locking is exactly as the name describes to lock the user into user their network, meaning that they can use no competitor: I see this as anti-competitive.

As for the 9 months with Sky, etc., thats because you have a contract. There is absolutely no reason to lock phones, it prevents any competition.

Telecom says it will not SIM-lock customers on its XT network. That’s because business customers wouldn’t stand for it and neither should young New Zealanders.

nickb800

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#555902 9-Dec-2011 13:46

My objection is because it may make sim locking acceptable, and eventually used by other providers, which would hamper competition across the market in the long term

CruciasNZ

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#555904 9-Dec-2011 13:51

If they offer low cost fixed-term contract plans which include a phone for free or pitance then it would be acceptable. BUT only if they offer plans where you can use your existing phone, basically an option for those too poor to buy a phone of their own.

On the whole though I disagree with the idea of SIM locked phones, just playing devils advocate here.

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sbiddle

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#555907 9-Dec-2011 13:53

I can't see how any person can possible regard this as anti competitive. You receive a subsidised phone, and in return have to pay $30 to get it unlocked. Having heard the other day from a pretty good source some target pricepoints for low end handsets I don't see any issues at all with this.

$10 per month customers can't expect a free lunch. They have no loyalty except to a pricepoint, and there is nothing preventing them from from moving networks and taking their handset with them.

codyc1515

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#555909 9-Dec-2011 13:56

sbiddle: I can't see how any person can possible regard this as anti competitive. You receive a subsidised phone, and in return have to pay $30 to get it unlocked. Having heard the other day from a pretty good source some target pricepoints for low end handsets I don't see any issues at all with this.

$10 per month customers can't expect a free lunch. They have no loyalty except to a pricepoint, and there is nothing preventing them from from moving networks and taking their handset with them.

That is as it should be with a free, competitive market.

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#555910 9-Dec-2011 13:56

I don't have a problem with it. In effect Telecom is saying "if you stay with us for nine months then we'll reward you with a cheaper phone". If you want to move the phone to another provider then it's still an option, and $30 isn't all that much money. It actually wouldn't surprise me to see other providers dropping the typical $30 new SIM fee so that users can switch for the same net cost.

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sbiddle

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#555912 9-Dec-2011 13:58

codyc1515:Telecom says it will not SIM-lock customers on its XT network. That’s because business customers wouldn’t stand for it and neither should young New Zealanders.

It has nothing to do with business customers. SIM locking of On Account handsets isn't needed because end users are already tied into contracts wih ETC's. As for prepay handsets there is very little subsidisation occuring, and this poses a problem for Telecom who have a huge number of ~$10 per very low ARPU CDMA customers that for all intent purposes are unprofitable. You can't afford to give a customer like this a free phone, but at least by subsiding the cost you can afford to give them a lower cost handset.

codyc1515

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#555915 9-Dec-2011 14:00

sbiddle:
codyc1515:Telecom says it will not SIM-lock customers on its XT network. That’s because business customers wouldn’t stand for it and neither should young New Zealanders.

It has nothing to do with business customers. SIM locking of On Account handsets isn't needed because end users are already tied into contracts wih ETC's. As for prepay handsets there is very little subsidisation occuring, and this poses a problem for Telecom who have a huge number of ~$10 per very low ARPU CDMA customers that for all intent purposes are unprofitable. You can't afford to give a customer like this a free phone, but at least by subsiding the cost you can afford to give them a lower cost handset.

OK, thats like saying "Here is a free Ford, but you must fuel up at Shell or pay up $$$.", this would not fly by the Commerce Commission so I can't see any reason that the SIM locking would either.

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#555916 9-Dec-2011 14:01

codyc1515:
sbiddle: I can't see how any person can possible regard this as anti competitive. You receive a subsidised phone, and in return have to pay $30 to get it unlocked. Having heard the other day from a pretty good source some target pricepoints for low end handsets I don't see any issues at all with this.

$10 per month customers can't expect a free lunch. They have no loyalty except to a pricepoint, and there is nothing preventing them from from moving networks and taking their handset with them.

That is as it should be with a free, competitive market.

Prefect competition is a great economic theory, but isn't really compatible with the real world.

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#555920 9-Dec-2011 14:05

codyc1515:
sbiddle:
codyc1515:Telecom says it will not SIM-lock customers on its XT network. That’s because business customers wouldn’t stand for it and neither should young New Zealanders.

It has nothing to do with business customers. SIM locking of On Account handsets isn't needed because end users are already tied into contracts wih ETC's. As for prepay handsets there is very little subsidisation occuring, and this poses a problem for Telecom who have a huge number of ~$10 per very low ARPU CDMA customers that for all intent purposes are unprofitable. You can't afford to give a customer like this a free phone, but at least by subsiding the cost you can afford to give them a lower cost handset.

OK, thats like saying "Here is a free Ford, but you must fuel up at Shell or pay up $$$.", this would not fly by the Commerce Commission so I can't see any reason that the SIM locking would either.

But that's not what is occuring.

If Ford offered you $1000 off a car in return for having to shop only at Shell, however giving you the option to pay that $1000 back and buy your fuel anywhere how is that anti competitive?

SIM locking is purely an issue over subsidies.

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#555926 9-Dec-2011 14:12

I suppose it is possible that Telecom will only SIM lock for a limited time, in order for it to be viable to offer discounted phones to wean $10 per month users off CDMA this year.

Perhaps a few months after the CDMA shutdown they will cease heavily subsidising and hence sim locking phones

freitasm

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#555928 9-Dec-2011 14:19

It took the large papers only three weeks to find out what we posted here before... Skinny has been already discussed for here.

codyc1515

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#555930 9-Dec-2011 14:23

I would be fine with it if they made it very, VERY clear that the phones are going to be locked to the XT network. Otherwise, I can see the old "fit for the purpose" Consumer Guarantees Act. getting pulled out. I find it a bit funny that none of the Geekzone Telecom Staff have commented on either of these threads.

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#555932 9-Dec-2011 14:27

codyc1515: Otherwise, I can see the old "fit for the purpose" Consumer Guarantees Act. getting pulled out.

But when you buy something from a phone company, usually the purpose is to use that company... or should I complain that my phone purchased from Apple isn't compatible with Google's services?

(Not a perfect analogy but hopefully you get what I'm saying)

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