CRTC bans sales of locked phones

Wireless providers will no longer be allowed to sell locked mobile devices or charge Canadians to unlock their phones for use on rival’s networks, according to new rules that will erase millions in annual revenue for carriers.

The federal government and consumer groups applauded the Canadian Radio-television and Telecommunications Commission’s decision, announced Thursday, to ban unlocking fees and require providers to sell only unlocked devices as of Dec. 1.

Carriers typically lock mobile devices to stop consumers from ditching them before they pay off the cost of their smartphones, which are often heavily subsidized over two-year contract periods. But consumers, especially those who travel, value unlocked devices because they can use their phone on any network by simply switching SIM cards.

The decision to end unlocking fees — the Big Three providers BCE Inc., Rogers Communications Inc. and Telus Corp. all charge $50 for the one-time service — lands as part of a larger review of the wireless code, which eliminated threeyear contracts and minimized data overage fees when it was first introduced in 2013.

The Big Three, MTS and SaskTel fought the original code’s implementation date in federal court, arguing the CRTC couldn’t retroactively change three-year contracts. They lost. The Big Three did not answer when asked if they have any plans to challenge the updated code in court.

Instead, Telus said it is analyzing the impact the decision will have on its systems and operations and how best to implement it in the timelines provided, according to a statement attributed to senior vice-president of regulatory affairs Johanne Senécal. It noted the decision is consistent with the regulator’s stated objectives. Bell and Rogers are reviewing the decision, their spokespeople said in emails.

Last year, carriers pulled in more than $37.7 million in revenue from unlocking fees, up 32.5 per cent from $28.5 million in 2015 — Telus raised its fee to $50 from $35 that year — and up 75 per cent from $21.6 million in 2014. That’s a fraction of retail wireless revenues, which hit $22.5 billion in 2015, according to CRTC data.

The updated code is the last policy that will be released under the leadership of CRTC chairman Jean-Pierre Blais, whose five-year term ends Saturday.