CRTC bans smartphone unlocking fees
Blais regrets not taking decision sooner
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.
The Canadian Radio-television and Telecommunications Commission announced Thursday that it will ban unlocking fees and require providers to sell only unlocked devices as of Dec. 1, a move that will erase millions in annual revenue for carriers and please customers who have long hated the extra charge.
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. 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.
It’s the last policy that will be released under the leadership of CRTC chairman Jean-Pierre Blais, whose five-year term ends Saturday.
In an interview this week, the chairman known for his consumerfriendly policies and his contentious relationship with industry named unlocking fees when asked if he would have made any decisions differently.
“I regret that I didn’t force unlocking sooner, in the first time around,” he said, referring to the creation of the wireless code in 2013.
At the time, Blais said he supported the consensus of the group of commissioners because, “I just don’t think it’s appropriate the leader dissents.”
“Frankly, that’s one case where I think my gut was telling me we probably should’ve forced unlocking. It would’ve helped three years sooner, a more dynamic market place.”
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 market revenues, which hit $22.5-billion in 2015, according to CRTC data.
But not all carriers are fans of the fees. Executives from Shaw Communications Inc., owner of Freedom Mobile, called the fees “toxic revenue” at a public hearing in February. “Unlocking fees essentially trap customers in their existing plans, stifle competition, and have a dampening effect on the dynamism of the wireless market,” Shaw submitted to the CRTC in support of their elimination.
The updated code also gives new customers 15 days to get out of their wireless contracts for free, provided they return their devices in near-new condition and have used less than half their monthly limits.