Following industry consultation, Ofcom said mobile phone companies will be banned from selling ‘locked’ handsets under a range of new rules designed to “make switching even simpler”. According to the regulator’s research, current rules deter around 35% of users from switching network.
Ofcom said some companies – including BT/EE, Tesco Mobile and Vodafone – still sell mobile phones that cannot be used on other networks unless they are unlocked, and that it is “a potentially complicated process which can also cost around £10”. Meanwhile, O2, Sky, Three and Virgin all sell unlocked devices.
The new rules, which Ofcom said better reflect “new European rules” – i.e. the European Electronic Communications Code – will come into effect from December 2021, a year after the UK’s Brexit transition period ends.
A consultation for similar measures to be applied for broadband customers will open soon.
Selina Chadha, Ofcom’s connectivity director, said: “We know that lots of people can be put off from switching because their handset is locked. So we’re banning mobile companies from selling locked phones, which will save people time, money and effort – and help them unlock better deals.”
To ensure price comparison tools reflect the change, Ofcom has also updated its accreditation scheme for price comparisons, effective from 30 April 2021.
Dion Price, CEO of Trustonic, said: “Clearly this news will cause some concern for several mobile operators. While companies like O2 have not locked their phones for some time, the likes of EE will be rightly concerned about the potential jump in multiple types of fraud and theft. Each year, the larger UK mobile operators spend around €1 billion euro buying phones. This is clearly a significant investment and even modest increases in overall theft and fraud will drive millions in additional losses.”
However, Price continued to say that the development was a “true double-edged sword” giving customers more freedom but potentially exposing them to fraud and theft, impacting operating profits.
Proposing a solution, Price continued: “Mobile operators can quickly and easily invest in more up to date handset locking technology that is currently available – because handset locking technology has not evolved for the last 15 years or so – and implement that technology in their devices to deter fraud by locking the device at the first sign of a problem. This is the win-win, as it gives the customers the flexibility and peace of mind that their data is safe, while satisfying the needs of the carrier to ensure their investment is protected.”
