Ofcom Bans Mobile Providers from Selling Locked Phones

Mobile phone providers will be banned from selling handsets locked to specific network, under new regulations from Ofcom.

EE/BT, Tesco Mobile and Vodafone all sell some mobile phones which are locked to their associated networks. Customers who wish to switch provider and keep the same handset need to unlock the devices, a procedure which can take up to 10 days and cost up to £10. Some mobile providers also place restrictions on when a device can be unlocked—for instance, only after three or six months of a contract have elapsed.

While there are ways to unlock your phone yourself, they require some technological know-how, which may be beyond some customers. 

In fact, Ofcom found that, even going though their providers, half of customers who tried to unlock their phones found it difficult. Customers reported that their mobile provider delayed in sending them the code needed to unlock the device and that often those codes didn’t work.

While some mobile operators, including Three, O2, Sky Mobile and Virgin Mobile, have already stopped selling locked devices, Ofcom found that across the market locked phones were a major obstacle to switching for consumers.

More than a third of mobile users who decided against switching said they’d been put off by the unlocking process.

Ofcom's consumer group director Lindsey Fussell said: "Switching mobile provider can be really frustrating.

"By freeing mobile users from locked handsets, our plans would save people time, effort and money – and help them unlock a better deal,” she added.

The new rules are the second intervention the telecoms regulator has made into the mobile phone market recently to ease switching, after finding that two in five mobile switchers encounter problems the process. 

Changes introduced in July mean customers can now switch their provider by sending a single, free text to their current provider. The provider will immediately respond with a PAC code they can give to their new operator, to complete the switch.

By streamlining switching, Ofcom hopes to galvanise a stagnant mobile customer base, with many customers who fail to look elsewhere for deals and stick with their provider long after their contracts—and their attractive prices—have lapsed. 

According to Ofcom research, 15% of mobile customers are out of contract with their provider, overpaying a collective £325 million a year.