08 November 2019
Vodacom said it has started network-locking some smartphone devices for the first time in years in a bid to make smartphones more affordable to the end user.
Speaking to journalists at a media briefing, chief officer of the company’s consumer business unit, Jorge Mendes, said that contrary to popular belief, there are no regulations that prevent South African operators from network-locking phones, preventing them from being used outside the network on which they were sold.
Mendes was adamant that the move by Vodacom should not be seen as anti-consumer, but rather a way for the operator to subsidise handsets more aggressively, particularly at the entry level where affordability is a major issue.
First National Bank’s mobile virtual network operator, FNB Connect, became the first market player in at least a decade to sell network-locked phones when it introduced new models a couple of years ago.
However, the major operators have avoided doing it following a “gentleman’s agreement” between them that they would no longer do it.
Nevertheless, Mendes said the market has changed and there was now a need to make smartphones more affordable to end users.
One way of achieving this is to network-lock phones for a certain length of time.
Mendes said Vodacom’s main rivals are also experimenting with network locking in “small quantities” and so his company has started locking thousands of devices for a one-year period to test consumer reaction.
Users can unlock the devices provided they pay a “small fee”.
“It gives consumers a choice – pay R799/month for an open device or R599 for a network-locked device,” he said.
“If you already made the choice to be with a network, the R599 proposition jumps out at you. We are prepared to invest more aggressively to bring prices down, but we need some protection so we can get a recovery from that investment.”