Vodacom wants to lock phones to its network

Vodacom is currently testing selling smartphones which are locked to its network, according to Vodacom consumer business unit chief officer Jorge Mendes.

Speaking at a media event in Vodacom World, Midrand, Mendes said that there are currently no regulations which stop mobile operators from engaging in this practice.

He added that locking handsets to its network allowed Vodacom to offer customers cheaper devices with the option to unlock the device at a later point for a fixed fee.

Mendes also stated that previously there was a “gentleman’s agreement” in place between the mobile operators that they would not offer network-locked devices.

However, Vodacom views this practice as a way to further subsidise the cost of a handset and offer more aggressive pricing, which it said would benefit consumers.

“It gives consumers a choice to pay R799 for an open device or R599 for a network-locked device,” said Mendes.

Subsidising devices

This offering is currently being trialled with consumers, with Vodacom beginning to lock selected devices for a one year upon sale to gauge the response.

Mendes added that the price of smartphones is typically the inhibiting factor for consumers at the low-end.

Vodacom aims to solve this by subsiding devices through various processes, including network-locking and the deployment of its own devices.

“We have managed to design handsets and create price points that are really attractive for the entry-level.”

“It creates pressure in the market because of that price point,” he added. “We bring the price down by subsiding and then use that price to negotiate with tier-one handset manufacturers.”

Read: Vodacom wants to turn off its 2G service in South Africa

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Vodacom wants to lock phones to its network