Canada’s telecom regulator is putting an end to fees charged to “unlock” smartphones, a costly irritant to customers who want to switch wireless providers.
The Canadian Radio-television and Telecommunications Commission said Thursday that as of Dec. 1, customers will have the right to have their mobile device unlocked free upon request, making it possible to use that device on other carriers’ networks.
That means, for example, that once a customer has paid off a device subsidy, typically spread over a two-year period, and now owns the handset outright, they would be free to take that device to any carrier without paying an additional fee to their original provider.
The move comes as a result of the commission’s review of the wireless code, a national code of conduct that governs the industry and aims to give Canadian customers clear information about their cellphone contracts. It also aims to protect them from unexpected overage fees with rules around caps and warnings carriers must provide. The CRTC introduced the code in 2013 and held a public hearing in February to assess its effectiveness.
Unlocking fees generated $37.7-million in revenue for Canadian carriers in 2016 as carriers responded to 943,000 requests to unlock devices. It’s a relatively small amount of revenue for the $22.5-billion industry, but the fees – typically about $50 for the code used to unlock the SIM card – are a deterrent to switching providers and help keep customers from leaving.
Carriers argue that unlocking fees are necessary to protect their investment in the device and prevent customers from leaving before they have paid off subsidies the companies offer on smartphones. The 2013 wireless code required carriers to offer unlocking services after 90 days but the CRTC also said Thursday that as of December, wireless providers must make newly purchased handsets unlocked to begin with.
At the hearing in February, Ed Antecol, vice-president of regulatory for Shaw Communications Inc.’s Freedom Mobile, called unlocking fees “toxic revenue,” adding, “It’s revenue that we earn that basically angers and displeases customers.”
But Freedom executives said it wasn’t practical for the small carrier to eliminate the fee entirely – even though it would make customers happy – because the company’s larger competitors, “would realize that all of our customers have unlocked phones” and target them with promotions to lure them away.
In a statement Thursday, CRTC chairman Jean-Pierre Blais said consumers “told us loudly and clearly” the wireless code could be more effective.
“We have listened to them. The changes and clarifications we are announcing today will give Canadians additional tools to make informed choices about their wireless services and take advantage of competitive offers in the marketplace,” he said.
Thursday’s ruling will be Mr. Blais’s last major act as chairman as his term ends on Saturday and he said he has not asked to return. The government has not yet named a successor.
The CRTC also clarified other issues, in its Thursday ruling, including the way carriers handle data or roaming overage fees for family or shared data plans used by multiple people. Some carriers had been applying the caps the wireless code set for overage charges – $50 for data and $100 for roaming charges – to each individual user of the plan.
The CRTC now says it must be the account holder who consents to any overage charges unless that person authorizes other users of the plan to consent to additional charges as well.
The commission also updated the terms around trial periods, ruling that customers will be able to cancel a cellphone contract within 15 days and return their device for no charge, as long as they have used less than half of their monthly usage limits.