MVNO chief executive says networks are preventing consumer choice by issuing locked handsets
UK mobile consumers are being held hostage by operators according to GiffGaff chief executive Mike Fairman after YouGov research revealed 25 million consumers currently have locked handsets.
Fairman (pictured) says networks are also making money off consumers, charging up to £17 to unlock a handset meaning this service alone could be worth up to £430 million in total.
The survey which was carried out by YouGov amongst 2019 adults on behalf of MVNO GiffGaff shows that consumers are missing out on the “best deals” according to Fairman.
“Consumers risk being held hostage by their mobile network to the tune of £400 million simply to switch networks with their existing phone,” he says.
“The practice of selling mobile phones locked to one network, or SIM-locking as it is known in the industry, is having a big impact on consumers’ ability to get the best deal on the market.”
Fairman believes the large amount of people using unlocked phones is due to “consumer confusion” surrounding the issue.
Almost a third of users (28 per cent) are unsure if locking is legal while 30 per cent believe their network is doing them a favour by locking their phone according to the YouGo survey.
Despite this, the research has also revealed that there is a high demand for unlocked handsets. Sixty two per cent of pollees said if they were given the choice they would always opt for an unlocked phone.
O2 responded to Fairman’s claims saying it locked handsets in order prevent them being quickly resold at a profit, depriving genuine O2 customers of the opportunity to get the handset they wanted.
It also said it unlocked its pay monthly handsets for free.
An O2 spokesperson said: ” “We charge pay and go customers a nominal fee to unlock the device, in order to cover our costs and to cover any subsidy we may have provided.
“Pay monthly handsets are also SIM-locked as we use the same physical stock as we do for pay and go. We will readily unlock pay monthly customers’ handsets on request and free of charge.
“On rare occasions, for particularly popular handsets where stock is limited, we may not unlock during the period of scarcity, again to ensure that popular handsets are available for genuine O2 customers. Once the handset is freely available we would permit customers to sim-unlock them.”
Following the survey GiffGaff has launched a guide on unlocking – the ‘Unlockapaedia” which can be accessed via its website.