Government Looking At Unlocking Mobile Phones

[Mulboyne]

Yomiuri: Govt wants cell phones 'unlocked'
The Internal Affairs and Communications Ministry has decided to ask mobile phone companies to "unlock" their handsets' subscriber identity modules (SIM), a move that would allow users greater freedom in choosing handsets and service providers, a ministry source said. The ministry will apply its new policy to next-generation cell phones to be put on the market from late 2010. It also will study the possibility of enacting a law to make the practice mandatory. When mobile phones are locked to a specific carrier, they will only accept SIM cards from the same carrier. Under the new policy, however, users are expected to be able to choose their own combination of mobile phone and carrier. In standard cell phones, customers insert SIM cards containing such information as phone numbers and the terms of their contracts. Most overseas users can change phones by simply removing a SIM card from one mobile phone and inserting it into another. In Japan, however, mobile phones are manufactured for specific carriers. When customers buy cell phones designed for different carriers, therefore, they also must change their telecommunication contracts, because their phones are SIM-locked to the networks of specific carriers. Their SIM cards cannot be used in phones made for different carriers' networks. The ministry believes that if the SIM locks are removed, users will have a greater range of choices and competition among carriers will intensify, which could lead to lower charges and better service...more...

[Neo-Rio]

...even if our phones were unlocked, how would that change anything? We're still tied to these 2 year contracts so for all intents and purposes... yes, we could change providers but we'd still be raped on the cancellation charges.

[Number11]

Eh?

[Level3]

Wonder if the big carriers will somehow "mistakedly" make their SIM cards incompatible with other carriers. Oops!

But yeah, don't see how this helps much, though it is a cool step.

In theory, doesn't this mean you could at least physically bring a phone in from abroad (bought cheap) and pop in a Japanese SIM.
But such a thing is worthless if there are bullshit "fees" for doing so. Or they just won't allow it at all. Does this law allow us to use any phone? Or just transfer SIM cards?
Is there any legitimate reason to transfer SIMs if you can't change contracts anyway, unless you're a terrorist or something?

Much rather see anti-trust/price fixing investigation, plus just a general fraud investigation into questionable fees and practices like charging customers a huge fee to print out a record of how packets were used, should there be some mysterious jump in your packets that doubles your keitai bill one month.
Shouldn't these companies be obligated to provide proof of why they're charging us?

Forigve my SIMignorance. We are stuck in the Galapogos of cell phones after all.

[omae mona]

I am not an expert on the various pricing plans, but I believe over the last few years, carriers have been unbundling phone purchases from the service contracts. This allows you, for example, to buy a used DoCoMo phone from somebody, and activate it for your own DoCoMo account with no contract and at relatively low cost.

So yes, if you break a contract in the middle, it can be expensive, because your monthly rates were artificially inflated to subsidize your phone purchase. The phone company has to recover that money if you end the plan early; hence the termination fees. But if you paid for your phone directly, I think the fees should be zero or minimal.

[Ketou]

It should bring phone prices down. A good move in my opinion.
If this goes through the second hand market will become much more active.

[FG Lurker]

Currently a reasonable number of Softbank and Docomo phones could be used on the other company's network if the phones weren't SIM-locked. The iPhone for example is perfectly capable of working without trouble on Docomo, and I personally know someone who is doing this now. Japanese brand phones that are multiband and can be used outside Japan (not all of them can be) will very likely work on both Docomo and Softbank. AU uses a completely different technology and most of their phones would not work on Softbank or Docmo (and vice versa.)

I suspect that the J-govt was hoping that the combination of number portability and forcing carriers to stop directly subsidizing their phones would create more competition in the market and stop people from getting locked into multi-year contracts. This worked to a degree -- monthly fees have come down somewhat, and more flat-rate data plans are available. Number portability has certainly made it less painful to change carriers. Phones are locked to carriers though, and with higher end phones costing from 50,000 to 80,000yen it is a barrier that stops consumers from changing their carrier.

I think it is a very good move. With the carriers not directly subsidizing their phones any more there is absolutely no reason for the phones to be SIM-locked. I hope this gets pushed through and that we see unlocked phones in Japan very soon.

[FG Lurker]

It should bring phone prices down. A good move in my opinion.

I don't expect this will have any impact on phone prices. It may however bring down the cost of voice and data service for anyone willing to commit to a 2 year contract. Trading away your ability to change carriers for a period and getting much lower monthly costs is not at all unreasonable.

If this goes through the second hand market will become much more active.

I don't think this will happen either really. Most Japanese don't like used products, especially an item as personal as a cell phone. Also, most cell phones end up being pretty beat up after 1 to 2 years of use and many of the plastic-fantastic ones don't last much longer than a couple of years anyway. Finally, with features changing and new models coming out I don't think there will be too much interest in 1 to 2 year old models from the average consumer here.

[Mulboyne]

ZakZak points out (Japanese) that one effect of this move will be that Docomo customers will, in time, be able to use an iphone even if Apple doesn't officially select the carrier.

Reuters: Japan to remove limits on mobile SIM card use

[Ketou]

I don't think this will happen either really. Most Japanese don't like used products, especially an item as personal as a cell phone. Also, most cell phones end up being pretty beat up after 1 to 2 years of use and many of the plastic-fantastic ones don't last much longer than a couple of years anyway. Finally, with features changing and new models coming out I don't think there will be too much interest in 1 to 2 year old models from the average consumer here.

The idea of not buying used products is pretty much defunct these days. I buy and sell items on Yahoo Auction on a daily basis and used items are always selling. You should have seen the bidding wars on used nappies and nappy covers at the end of March...and you can't get much more personal than that.
I think the phones will sell, but as with all used items condition will dictate price.

[Screwed-down Hairdo]

You should have seen the bidding wars on used nappies and nappy covers at the end of March

There is, after all, a special affinity for items such as these among grown Japanese men, so the incredible demand is not so surprising.

[Mulboyne]

Yomiuri: End of SIM locks a fundamental shift

The basic agreement reached among leading mobile phone service providers to "unlock" their handsets, thereby allowing users access to services offered by any of the companies, represents a major turning point for this country's cell phone market. The agreement reached by major stakeholders in the market--service providers including NTT Docomo Inc. and the industrial association of handset manufacturers--will grant users the freedom to shift providers without changing their handsets. For years, the subscriber identity modules (SIMs) in mobile phones have been locked to different providers, meaning a certain handset can only be used with the services offered by a particular provider. A SIM card is a small electronic card that records a subscriber's phone number and the details of his or her subscription. SIM locks make the cards unusable in handsets sold by different providers.

Initially, cell phone service providers were divided on the issue of removing SIM locks. When the Internal Affairs and Communications Ministry spoke with the four major providers about the issue Friday, NTT Docomo agreed with the removal of SIM locks, saying users should have the right to choose handsets and providers freely. Emobile Ltd. went along with Docomo, saying removal would provide users with more choices. In contrast, KDDI Corp. and SoftBank Mobile Corp. expressed concern. KDDI said the issue needed to be discussed carefully due to technical problems expected to result from unlocking SIM cards, while SoftBank said removing the locks might result in a sharp rise in the prices of handsets. However, KDDI and SoftBank's resistance was not enough to stop the movement toward removing SIM locks. Internal Affairs and Communications Minister Kazuhiro Haraguchi himself has displayed a strong desire to do so. "We shouldn't let Japan be isolated from global trends [in the cell phone market]," Haraguchi said before meeting with the service providers. In addition to Haraguchi's stance, the fact that NTT Docomo, the nation's largest service provider, has inclined toward removing SIM locks encouraged KDDI and SoftBank to end their resistance.

The removal of SIM locks may completely change the Japanese cell phone market, which has developed under a different business model from other countries. Currently, cell phone service providers buy handsets directly from manufacturers and wholesale them to cell phone shops. Providers pay tens of thousands of yen per handset to the shops to lower retail prices, in what they deem a subsidy to promote cell phone sales. The low prices are a tactic to win customers from rival operators--a business model unique to Japan. By preventing people from switching providers as long as they used the same handset, SIM locks were a way for service providers to stop users from terminating their contracts before they paid enough telecommunication fees for providers to recoup the subsidies they paid to shops.

In foreign countries, most operators remove SIM locks after a certain period, or do not lock the cards in the first place. In Europe, for example, where people repeatedly cross national borders, many use the same handsets while moving from country to country, switching to local cell phone operators that offer cheap telecommunications fees. Users can shift providers just by inserting a different SIM card, a more convenient arrangement than Japan's system. Observers have said this country's unique business model would isolate its cell phone market from the world standard. They expect the removal of SIM locks to make it more convenient to use cell phones.

Observers also say the balance of power between cell phone service providers may change drastically once the removal of SIM locks encourages users to shift providers more often. "Handset makers and service providers would face fiercer competition [after the removal of SIM locks], which would cause them to lower telecommunication fees, develop more attractive handsets and strengthen their competitive power," a senior official of the communications ministry said. Handset makers and service providers are expected to provide various services and handsets eyeing the removal of SIM locks, which would increase the choices for consumers. For service providers, the removal of SIM locks would mean the end of their method of preventing users from changing providers by offering attractive handsets. Companies would have to work harder to attract customers and succeed over their rivals.