Lost in the noise this week was an announcement of a settlement in a legal dispute in which Sprint agreed to help current and former customers unlock their phones for use on other CDMA networks like Verizon.
At the same time, they agreed to help customers wishing to bring an unlocked phone onto their network. This settlement is limited to the state of California and to Sprint only, but it begs the question: Is the tying of a phone to one network anti-competitive and should companies be required to unlock phones for customers or to sell unlocked phones, should they request one?
This could have huge implications for the industry if this type of settlement and sentiment spread. Currently, it is not exactly easy or obvious on how to bring a compatible, unlocked phone to the network of your choice. Equally difficult is to take your phone to another carrier after you’ve satisfied your contract, or paid an early exit penalty. To spur innovation in the industry (and competition), people should be able to buy a phone with no contract, and they should be able to easily move their phones between compatible networks once they have satisfied any existing contract.
If people finally revolt against locked phones and terms of this Sprint settlement spread, then in a year and a half, there could be a market opportunity for T-Mobile to entice Apple iPhone owners to leave AT&T for their GSM network. Would this be good for competition? Would all iPhone owners benefit?
If Apple and AT&T were suddenly required to sell unlocked iPhones next to phones with contracts, there would be a natural expansion in the demand for iPhones and an increase in the competition for subscribers. The same would be true for all other new phones and mobile service in general. This effect would be amplified if making switching easier was required as the legions of people with phones no longer under contract finally felt like they had a choice other than giving up the phone that they’re comfortable with.
Will consumers rise up to demand easier switching and the sale of unlocked phones? Will state attorney generals or legislatures support them?
Braden Kelley is a Social Business Architect and the author of Stoking Your Innovation Bonfire from John Wiley & Sons. Braden is also a popular innovation speaker and trainer, and advises companies on embedding innovation across the organization and how to attract and engage customers, partners, and employees.