Vodacom is currently testing selling smartphones which are locked to its network, according to Vodacom consumer business unit chief officer Jorge Mendes.<\/p>\n
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.<\/p>\n
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.<\/p>\n
Mendes also stated that previously there was a \u201cgentleman\u2019s agreement\u201d in place between the mobile operators that they would not offer network-locked devices.<\/p>\n
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.<\/p>\n
\u201cIt gives consumers a choice to pay R799 for an open device or R599 for a network-locked device,\u201d said Mendes.<\/p>\n
Subsidising devices<\/strong><\/p>\n 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.<\/p>\n Mendes added that the price of smartphones is typically the inhibiting factor for consumers at the low-end.<\/p>\n Vodacom aims to solve this by subsiding devices through various processes, including network-locking and the deployment of its own devices.<\/p>\n \u201cWe have managed to design handsets and create price points that are really attractive for the entry-level.\u201d<\/p>\n \u201cIt creates pressure in the market because of that price point,\u201d he added. \u201cWe bring the price down by subsiding and then use that price to negotiate with tier-one handset manufacturers.\u201d<\/p>\n
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