Current Issue: April 5, 2013 Next Issue: September 2013
Rogers, Bell and Telus customers can now unchain themselves from their cellphones, as the mobile carriers are finally starting to offer services to unlock their handheld devices.
Many third-party communication stores offer unlocking services and will sometimes buy your locked phone for reselling.
The option to unlock cellphones came in response to growing public opposition to companies selling ‘locked’ phones.
Cellphone service providers sell phones that are locked onto their network, meaning customers can’t switch to a competitor’s network. Up until now cellphone users had to turn to third-party businesses to unlock their phones, so they could switch between networks.
Companies sell discounted phones, locking customers into a long-term contract that allows companies to make up the losses on the phone.
“In Canada wireless carriers have subsidies for cellphones; in a longer-term commitment [customers] would pay less for that device. Typically that phone will be locked.” says Marc Choma, director of communications for the Canadian Wireless Telecommunications Association, an advocacy group that represents all wireless carriers in Canada.
Choma says locking phones is a way to protect a company that sells phones at a discount only to find the customers moving to another service provider with the cheap phone.
He says most people don’t really know the true value of phones since customers generally purchase subsidized phones.
Choma adds that unlocking cellphones was never illegal, even though there is a misconception that it is.
Third-party unlocking is "clearly available, whether or not it works or how effective that phone will work is always a question,” says Howard Maker of the Commissioner of Complaints for Telecommunications Services, a nonprofit organization that resolves disagreements between wireless consumers and providers.
To Pick or not to Pick
"If you bought a car and they told you could only buy gas at one location, you probably wouldn’t buy that car."
Generally a way to avoid locked phones is to buy the phone outright and avoid signing a contract with a cellphone service provider. Maker says consumers need to be careful when considering unlocking their phones.
“If I go on my own and decide to unlock my phone and go somewhere where it’s not designed to work I take my chances,” says Maker. “[Unlocking] possibly violates the warranty.”
Maker says CCTS does hear complaints about locked phones, but the frustration usually lies with the quality of service customers get from their wireless providers.
“They’re so frustrated and want to go to another provider but they can’t because they’re locked into their contracts,” says Maker.
Choma adds that unlocking phones will enable travellers to use their phones abroad with international SIM cards, eliminating roaming charges.
The Bill to Kill
NDP MP Bruce Hyer introduced the Cell Phone Freedoms Act in hte House of Commons last June. The bill targets cellphone carriers and their practice of locking phones. Hyer says Bill C-560 is there to allow consumer choice, as it requires that customers be informed of the locked phones before purchase. The bill also requires that the companies unlock phones for free when the contract ends, as well as if the phone was bought unsubsidized without a contract.
SIM cards are small chips about the size of your thumb used by travellers to avoid expensive roaming charges.
“I believe in healthy competition, and network locks are fundamentally anti-competitive because they prevent consumers from shopping around [and] going to a different carrier. The phones would essentially be a paperweight,” says Hyer. “If you bought a car and they told you could only buy gas at one location, you probably wouldn’t buy that car.”
Although Hyer says he doesn’t know when the bill will come up for a second reading or if it will pass, he says it has already had an impact. Hyers says the bill contributed to Rogers changing its unlocking policies in December, creating a ripple effect in the industry.
Choma says wireless telecommunications is a very competitive industry and providing unlocking services is another incentive to attract customers.
Hyer who owns several small businesses himself, says consumers like it when they have choice and it will lead to greater customer loyalty.
“If they feel coerced they will feel grumpy. It’s better to entice customers with fair prices instead of trapped in a system that they feel [is] unfair.”
Cellphone unlocking practices in other countries
Unlocking cellphones is generally legal in Europe and around the world, but there are varying rules regarding the practice.
Singapore and Israel
Bill C-560 - Cell Phone Freedom Act
SIM card – stands for subscriber identity module (SIM) cards. A SIM card is a small card that's inserted into the phone. It contains all your contacts and settings. You can take the SIM card out, put it into another phone. You can also put a different SIM card in your unlocked phone, and your phone will then work with the phone number and account linked to that card. CDMA phones have no SIM, making unlocking impossible.
GSM - stands for Global System for Mobile communications. It was developed in Europe, and the original name is French: Groupe Spécial Mobile. This is the most popular type of cellphone.
CDMA - stands for Code Division Multiple Access. It is actually a radio technology that has been adapted for cellphone use.
TDMA - Time Division Multiple Access. This is a different way of dividing cell phone signals over a given amount of bandwidth.
Source How Stuff Works