Cellular phone operators were attacked on all sides last week following the launch of a European Commission investigation into competitive practices in the mobile market, while nine UK air-time resellers were threatened with legal action unless they remove unfair terms from their consumer contracts. The Commission is looking into the use of so-called SIM locks used in some mobile phones to tie customers into a particular operator. The problem, according to the Commission, is more prevalent in the UK, where companies such as British Telecommunications Plc offer the phones for as little as a $1 or free, but then use the SIM lock boards to prevent the phone from working with other operator’s networks. In contrast, phones from the Belgian nat-ional operator Belgacom BV, cost anything up to $695 but will work with the rival network from Mobistar BV later this year. British Telecom and others claim the SIM locks are used to com-bat fraud by enabling a user to be identified each time the phone is used, but SIM locks are also a way of recouping the loss made by operators that offer phones for almost nothing to new subscribers. The Commission has sent a warning letter to mobile phone manufacturers and operators seeking details about SIM locks and their uses. As if that wasn’t enough, the UK’s Office of Fair Trading has threatened to take nine mobile operators to court unless they clean up their subscriber contracts. The nine operators warned included British Telecommunications Plc, Vodafone Group Plc, Cellnet Mobile Communications Ltd (owned jointly by British Telecom and Securicor Group Plc), Hutchison Telecommunications Ltd, Mercury One-2-One Ltd, Motorola Inc, Astec Communications Inc, Unique Air Ltd and the People’s Phone Co Plc. John Bridgeman, Director General of Fair Trading singled out terms and conditions that weigh the contract against customers in favour of the operator. Such practices included long periods of notice for terminating a contract, high penalty payments for ending contracts early, unreadable small print, price variations and unintelligible details.
