OFCOM Does it Again!
Just when I thought that I had been complimenting OFCOM – the UK Communications Regulator – far too often recently, they spring another surprise on me!
Their latest release dated 17th December 2021 – reproduced in full below – addresses a problem which has been irritating both customers and resellers for years.
Owing to the financial “muscle” of the UK Mobile Networks (the main four being O2, Vodafone, EE and Three) new and existing customers buying a new Mobile package have often been seduced by an offer to include a new Handset as part of that package.
Often most or all of the cost of the new mobile phone handset would be incorporated into the monthly payments due under the two year + contract entered in to by the customer. In many cases, this was an unbeatable offer for the consumer, since modern handsets are expensive, and payment by instalments a very attractive option.
For the Network, it was a brilliant “win win” strategy: because the customer was tied in to a lengthy contract, they made profits both on the call volume and data usage, AND the sale of the handset.
Last, but not least, the new mobile phone was tied or “locked” to that Network, which means it could not easily be used by the customer seeking a better value contract elsewhere.
Although “Out of Contract” handsets could be “unlocked” this was and still is a tedious and inconvenient process, involving a charge and often a delay.
Now OFCOM have galloped to the rescue, and Mobile Operators can no longer “lock” customer phones. Admiitedly this applies only to new contracts, and also is probably needed to help simplify problems in the offing through the new eSIM product now part of the latest mobile phones, but it is nevertheless a very welcome development.
The Good News Does not Stop There!
Almost as an afterthought, OFCOM also confirms that the Maximum Contract Term for either a new Mobile Phone or Broadband Package cannot exceed 2 years!!
This – coupled with the new directive to simplify switching broadband providers – is exceptionally good news for Consumers, Broadband Brokers and Resellers
OFCOM Release 17th December 2021
“Mobile companies now banned from selling locked handsets
Mobile phone companies are now banned from selling customers locked handsets, under new Ofcom rules that come into force today.
Some companies have still been selling mobile phones that can’t be used on other networks, unless they are unlocked. But this can be complicated for customers and cost around £10 too.
Our research shows that more than a third of people who decided against switching said having to get a handset unlocked put them off changing provider. This means they could be missing out on a better deal.
And almost half of customers who try to unlock their phone have difficulties doing so – including long delays or loss of service.
So we have brought in new rules that come into force today, and mean mobile companies are now banned from selling locked phones. This will make it easier for people to move to a different network with their existing handset, hassle-free.
Any mobile customers who want to change provider can take advantage of the simple text-to-switch process, where you can now get the code you need by simply sending a free text message.
Bundles limited to two-year contracts
Other new measures that come into force today include extending our rules that limit phone and broadband contracts to a maximum of two years, so they cover bundles. Also, if a customer adds a service to their package, providers will not be able to extend the contract periods of the existing services the customer already has without their consent.
This will help give customers more flexibility to switch package or provider, without being locked into long deals.
More support for disabled customers
We’ve also strengthened our existing requirements on phone and broadband companies to provide blind or vision impaired customers with bills and contract information in accessible formats, such as braille or large print.
We’ve extended the scope of these rules, so disabled customers can request that any important information about their service – excluding marketing materials – is provided in a format that is reasonably acceptable to meets their needs, and at no extra cost.
These rules are part of a package of changes we are introducing, to help ensure phone and broadband customers are treated fairly and they can find the best deal for them with ease.
Find out more on how to make sure you’re getting the most out of your phone and broadband services from our consumer advice pages.”