7 Comments

Summary:

Japanese wireless provider, NTT DoCoMo, will reportedly unlock handsets tied to its network and will include SIM-unlock software in all handsets next April. SoftBank’s iPhone is highly unlikely to follow suit, but here in the U.S. we have hope thanks to LTE on 700 MHz spectrum.

Japanese wireless provider NTT DoCoMo will allow customers to easily switch handsets and even take their phones to other carriers by inserting a different SIM card beginning next April, according to TeleGeography. The research service reported that the carrier will unlock handsets tied to its network and will include SIM-unlock software on its phones. Such a move essentially removes the carrier lock that ties a phone to a network, but for full customer freedom in Japan, DoCoMo’s competitors would have to follow suit.

DoCoMo currently enjoys the largest subscriber base in Japan, serving 49.8 percent of all Japanese subscribers at the end of May. DoCoMo says EMOBILE holds 28.3 percent, SoftBank has 19.7 percent and KDDI/au rounds out the group with 2.2 percent of the market. Even though SoftBank has fewer than half of DoCoMo’s subscribers, the carrier has one advantage: Apple’s iPhone. The phone is SIM-locked to work exclusively on SoftBank’s network, a scenario that’s unlikely to change in the near future.

Here in the U.S., the unlocked phone market stays small because of the huge amount of subsidized (that is, locked to a network) hardware. And even if the model were to change, consumers wouldn’t have total freedom, due to differing network implementations. With AT&T and T-Mobile, we only have two GSM providers to use with an unlocked handset. And then there’s the frequency variances — while I can swap my T-Mobile SIM with one for AT&T in my Nexus One, the phone would lose speedy 3G service because the phone uses the 1700 MHz band for HSPA, which is specific to T-Mobile’s service. For this reason, even an unlocked AT&T iPhone in the U.S. will only have slow EDGE data speeds on T-Mobile’s network.

A more open future here in the U.S. may be arriving with LTE, however. Both AT&T and Verizon — the two largest U.S. carriers — will implement LTE with 700 MHz spectrum. Although LTE will initially be used solely for data, eventually voice will be piped over the network, which opens up the possibility of handset swapping between the two if they follow DoCoMo’s lead.

Related content from GigaOM Pro (sub req’d): 4G: State of the Union

  1. Stark Ravin Tuesday, July 6, 2010

    In most countries in Western Europe, unlocked handsets are already the norm. You buy your phone, pick a SIM card from your favorite carrier (pre-paid or post-paid), and go to town. This even applies to the iPhone in most those countries; and now even in Canada you can buy an unlocked, SIM-free iPhone directly from Apple and put it on any of the participating carriers up there that you want. Sure, the iPhone costs more, but you are not selling your soul to the carrier and agreeing to be locked into a contract for years. But freedom has a price! ;)

    This is the way it should be everywhere. And the iPhone 4 now supports more of the T-Mobile US frequencies, so moving an unlocked iPhone in the US between at least two carriers (and soon three, with Verizon getting on the GSM train with LTE) could happen right now. This is a consumer choice issue that could be taken care of right now. Very frustrating!

    Share
    1. Agreed, here in the U.S., we’re way behind because consumers are accustomed to paying less for the hardware. Unlocked and unsubsidized handsets have little chance of success here with such a mentality, although I did my part for the cause — I bought my Nexus One at full price to be contract-free. ;)

      To your point about iPhone 4 supporting more T-Mobile U.S. frequencies — if I recall correctly, the device still doesn’t support 1700 MHz, which when paired with 2100 MHz (AWS / Band IV), is what T-Mobile uses for 3G these days. Same with the iPhone 3GS – it supported 2100 MHz, but not 1700 Mhz, so I don’t believe that iPhone 4 can be swapped between U.S. carriers with full functionality. And while Verizon is going go a GSM-based network with LTE, it will be on the 700 MHz frequency, so there’s no compatibility there either right now.

      Share
      1. Stark Ravin Tuesday, July 6, 2010

        Thanks for straightening me out on the T-Mobile frequencies and the iPhone 4. I really got that wrong.

        While I generally agree with your statement that part of the problem is that US “consumers are accustomed to paying less for the hardware”, the reality is, this is all marketing brainwashing on the part of the device makers and carriers. They choose to promote the subsidized price to befuddle consumers about the freedom that could be theirs (for a price). The device makers do this to push units, and the carriers do it lock in revenue over the long term.

        It would be better if the device makers and carriers in their marketing first said: “The device is $500. If you are willing to commit to contract with us, the price could be lower.” As you probably know, carrier device subsidies vary anyway based on the consumer and their standing with their carrier. In reality, this does indeed happen, but they don’t make this obvious.

        On top of this, at the end of the day, locking the device to the carrier has utterly nothing to do with committing to a long term contract. The reality is, on AT&T, if your account is in good standing, even on a phone you purchase on a two-year contract, after 3 months they will unlock the device. You only have to call customer service and they will give you an unlock code and walk you through the unlocking process. (They have only one device on which they don’t honor this: the iPhone.)

        The contract only has to do with you and the carrier, and a commitment to a long term relationship. This is why they have ETF’s. They get their money back on the device subsidization if you bail on the contract, but again, this is in no way related to the device being locked to the network. It is absolutely unnecessary to the financial aspects of the contract.

        And frankly, I put part of the blame on you journalists for playing into the hands of the carriers and unwittingly promoting this marketing plague. If you were looking out for the consumer (which I think is part of your job) you would put the subsidized prices in context. Tell your readers the unsubsidized, real price of all the phones you discuss and review. Then just tell them they could potentially get it cheaper if subsidized on a contract, and to go talk to the carrier of their choice. Don’t even bring up the quoted, subsidized price fed to you by the carrier or device maker. Otherwise, you become an instrument of these companies who want to mislead consumers, rather than doing the right thing and communicating clearly to consumers their options.

        Maybe you could pitch this to Om and make it your blog network’s policy. It is more transparent and would certainly be a great service to your readers and the industry.

        Share
    2. Have any Walmarts in Western Europe except Britain? I thought not. If your landscape was littered with these hideous bargain barns, you would understand American fixation with buying crap by paying the least amount up front. It’s essentially an endless fascination with making up for todays shortcomings with the promise of tomorrows money.

      Share
  2. Yes, they will follow. Actually, they’ll have to. Since docomo’s move is not entirely their good will but part of conformance with Japan gov requirements. Just, FYI

    Share
  3. Hi Kevin:

    A couple of points on this from the inside looking in..

    First, and most important, it’s actually the ministry (MIC) who is driving that evolution. The precise details are still rather sketchy.. but, as with their previous effort to remove subsidies, most def. change is coming.

    Second, would suggest that DoCoMo sim-free exchange with SoftBank (KDDI runs on Qualcomm, therefore not W-CDMA) would have to include the iPhone.

    Third, you have eMobile and KDDI market share numbers reversed in the above article text. We post the official numbers from TCA in small graph on our lower left nav. 8-)

    Cheers,

    Lars

    Share
  4. It’s all great and good that they will no longer be locking their phones in the future, but what i (and i assume many others) find myself wondering is if they will provide a software unlock code for current owners of their handsets. My hypersim is working out alright, but i’d much rather not be counting on hardware/software made/written by who-knows-who to use my phone, my super-ultra cool phone.

    Share

Comments have been disabled for this post