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Ofcom moves to ban sale of carrier-locked phones in the UK

Written on Wednesday, 28 October 2020 05:45

UK telecoms regulator Ofcom has banned phone carriers from selling locked phones starting December 2021 in an effort to give people greater autonomy when it comes to switching between providers.

While operators such as Sky, Virgin, Three and O2 already sell unlocked phones, some of the UK’s other operators like Vodafone, Tesco and EE, still sell phones that need to be unlocked manually before users can switch to a different carrier.

According to Ofcom, the banning of this practice comes as a set of new measures are about to be launched. The telecoms watchdog found that more than a third of people in the UK who were against switching operators said that one of the contributing factors to their decision was that they were put off by having to go through the process of unlocking their phone. In the UK, unlocking a phone costs £10 and it can often lead to delays, loss of service or other issues.

Ofcom’s connectivity director, Selina Chadha, said, “We know that lots of people can be put off from switching because their handset is locked. So we’re banning mobile companies from selling locked phones, which will save people time, money and effort – and help them unlock better deals.”

In reference to this, Vodafone said that it was “ready to implement these changes when they come into force”. BT also said that it was willing to “work with Ofcom to comply with the guidelines”.

In an official statement by Ofcom, the regulator disclosed that it plans to also simplify the switching process for broadband customers.

“We’re also making it easier to switch between broadband networks. At the moment, customers switching between providers such as BT, Sky and TalkTalk on Openreach’s copper network can simply contact their new provider, who will manage the switch from there,” the statement read.

While the UK has moved to ban the sale of carrier-locked mobile phones, the US is on the other end of the spectrum; it is still quite a common practice in the US.

Published in Reports

Telecommunication operators Three and Vodafone are closing the gap on UK incumbent EE according to analysis conducted by Root-Metrics. The company carried out 646,230 tests across all of the United Kingdom. It assessed the operators in six categories, which ranged from reliability, speed, data, calls, texts and overall performance.

Whilst EE still came out on top as the strongest performer, it was highlighted that both Vodafone and Three had closed the gap considerably. EE was given four awards by Root-Score, while both Three and Vodafone received two awards each.

EE won the best overall category, and also emerged as frontrunners in speed and data. In addition to this, it shared joint-first with Vodafone for text messaging. Three won outright across the UK for its reliability, and shared joint-first with Vodafone for call performance. O2 came last in all categories apart from text quality, where it finished third.

However, this represents a significant and telling change across the telecommunications landscape, last year EE won all the awards on offer by Root-Score. The latest findings declared that whilst EE is the best-performing telco overall in the UK, Vodafone was No.1 in Northern Ireland, whilst Three dominated in Scotland and Wales. Northern Ireland was the only region were 02 performed well.

General Manager of Europe for Root-Metrics, Scott Stonham, suggests that “the report only serves to reiterate just how competitive the UK telecommunications sector is,” he said.

“These latest results have really shaken things up and show the increasing competitiveness in the UK, particularly over the last six months. EE continues to lead the way, but Three and Vodafone are close behind. What is clear is that each operator showed strong performance in at least one particular country, while nobody was able to sweep the board at the four nation’s level. UK consumers have strong mobile options depending on how and where they use their devices most.”

A Senior Research Director on telecoms at HIS Markit said it was imperative that operators needed to invest in radio spectrum in order to succeed. “To succeed, mobile operators must secure sufficient radio spectrum and invest in the necessary equipment, sites and operational teams to ensure consumers enjoy fast reliable mobile broadband. With new UK spectrum allocations soon to be auctioned in the run up to 5G, these performance results provide a snapshot on the competitive balance between the UK mobile operators now, and highlight which operators most need to acquire new spectrum capacity if they are to be a future mobile performance winner.”

Fogg also stressed that the results which come ahead of a spectrum auction in September, could radically alter the balance of spectrum holdings, which would allow operators with smaller holdings such as Three and O2 to compete in a more efficient manner. 02 CEO Mark Evans, has already declared that he wants to see the auction commence soon and that it was compete ‘fiercely’ for spectrum allocation.

Published in Telecom Operators

The UK’s telecom regulator Ofcom announced that later this year it will auction licenses to use 190 MHz of spectrum in two frequency bands, to increase the airwaves available for mobile devices by almost one third. Ofcom said it is helping meet strong demand by releasing extra spectrum, allowing mobile operators to increase their networks’ capacity.

However, UK operator Three publicly disapproved of Ofcom’s announcement in a statement, saying Ofcom’s proposal is “a kick in the teeth for all consumers and in particular for the near-200,000 people who signed up to the ‘Make the Air Fair’ campaign.”

Three launched the campaign in late 2016 calling on consumers to help it fight for a 30 percent spectrum cap before the spectrum auction. The campaign aimed to tackle rival operator BT/EE’s alleged “spectrum dominance”. BT/EE own more than 40 percent of the UK’s available spectrum, and Three has expressed concern that the upcoming auction will enable the two operators to gain more spectrum, thus increasing their dominance.

“By making decisions that increase the dominance of the largest operators, Ofcom is damaging competition, restricting choice and pushing prices up for the very consumers that it is meant to protect,” said Three’s statement. “The mobile market is imbalanced and failing customers. Ofcom has shown little interest in tackling the problem. We will consider our response as a matter of urgency.”

40 MHz of spectrum will be auctioned in the 2.3GHz band by Ofcom. This band is already supported by mobile devices from manufacturers such as Apple and Samsung. These airwaves could be used immediately after release to provide extra capacity, meaning faster downloads and internet browsing for mobile users, according to Ofcom.

In addition, 150 MHz of spectrum will be auctioned in the 3.4GHz band. These airwaves are not compatible with most current mobile devices, but are expected to be usable by future phones and tablets. The 3.4GHz band has been identified as central to the rollout of 5G mobile across Europe.

Ofcom has expressed its intention to reduce BT/EE’s overall share of mobile spectrum by imposing two different restrictions on bidders: “These will limit the amount of spectrum operators can win in the 2.3GHz band; and place overall limits on the spectrum an operator can win across the 2.3GHz and 3.4GHz bands in aggregate,” said the regulator in a statement.

Ofcom said it will place a cap of 255 MHz on the “immediately useable” spectrum that any one operator can hold as a result of the auction. This cap means BT/EE will not be able to bid for spectrum in the 2.3GHz band. In addition, Ofcom will place a new, additional cap of 340 MHz on the overallamount of mobile spectrum a single operator can hold as a result of the auction. This cap amounts to 37 percent of all mobile spectrum expected to be useable in 2020, which includes not only the spectrum available in this auction but also the 700MHz band.

“Taken together, the effect of the caps will be to reduce BT/EE’s overall share of mobile spectrum; the company can win a maximum 85 MHz of new spectrum in the 3.4GHz band,” said Ofcom. “The overall cap also means that Vodafone could gain a maximum 160 MHz of spectrum across both the 2.3GHz and 3.4GHz bands.”

Philip Marnick, Ofcom’s Spectrum Group Director, said: “Spectrum is a vital resource that fuels the UK’s economy. We’ve designed this auction to ensure that people and businesses continue to benefit from strong competition for mobile services.”

Marnick added: “We want to see this spectrum in use as soon as possible. With smartphones and tablets using even more data, people need a choice of fast and reliable mobile networks. These new airwaves will support better services for mobile users, and allow operators to innovate and build for the future.”

Published in Telecom Operators

UK regulator Ofcom on June 16 fined mobile phone provider Three £1,890,000, after uncovering a weakness in the mobile operator’s emergency call network. An Ofcom investigation found that Three broke an important rule designed to ensure everyone can contact the emergency services at all times.

Three fired back at Ofcom saying it acknowledged Ofcom’s decision to fine the company for a single point of vulnerability on Three’s network, but claims the vulnerability “has not had any impact on our customers and only relates to a potential point of failure in Three’s network,” the operator said.

On 6 October 2016, Three notified Ofcom of a temporary loss of service affecting customers in Kent, Hampshire and parts of London. Ofcom’s investigation found that emergency calls from customers in the affected area had to pass through a particular data centre in order to reach the emergency services. This meant that Three’s emergency call service was vulnerable to a single point of failure.

Three’s network “should have been able to automatically divert emergency calls via back-up routes in the event of a local outage,” Ofcom said. But these back-up routes would also have failed because they were all directed through this one point. To resolve the incident and address the underlying network weakness, Three added an additional back-up route to carry emergency call traffic.

Following Ofcom’s investigation, the regulator found Three had “breached the requirement to ensure uninterrupted access to the emergency services.” The breach of the rules was not the incident itself, but rather the weakness identified in Three’s network.

Ofcom’s investigation acknowledged that Three did not act deliberately or recklessly. However, the fine “reflects the seriousness of the breach, given the potential impact on public health and safety,” it said. Ofcom also acknowledged the steps Three took to ensure ongoing compliance with its emergency call service rules.

“Ofcom identified this vulnerability when investigating a separate, unprecedented and unforeseeable October 2016 fibre break outage on Three’s network,” said Three in a statement. “This resulted in a temporary loss of emergency call services affecting some customers. Three took immediate action and the issue was quickly resolved.”

Three highlighted that Ofcom recognized that the circumstances surrounding the October 2016 fibre break outage were exceptional and outside of Three’s control.  Therefore, Three claims the incident itself was “not a breach of Ofcom’s rules.”

As a result of the investigation, Ofcom said it expects all providers to “satisfy themselves that their networks do not have any single points of failure in the routing of their emergency call traffic, which could reasonably be avoided.”

Gaucho Rasmussen, Ofcom’s Enforcement and Investigations Director, said: “Telephone access to the emergency services is extremely important, because failures can have serious consequences for people’s safety and wellbeing.” Rasmussen added that the fine “serves as a clear warning to the wider telecoms industry. Providers must take all necessary steps to ensure uninterrupted access to emergency services.”

Published in Telecom Operators

UK telecom operator Three recently announced that its customers will be able to use their phones abroad at no extra cost in a further two worldwide destinations – Singapore and Brazil - from June 15, bringing its total destinations to 60.

As the network continues its assault on “unfair roaming charges”, specifically in destinations outside the EU, these new destinations keep Three positioned as the global leader in mobile roaming.

Other networks are playing catch-up as EU regulations force them into freeing travelers from unfair roaming charges in Europe from June 15. Roaming charges are a “rip off” and Three continues to tackle the issue head on by opening up further global destinations to phone users at no extra cost and now covers 82% of total trips abroad worldwide.

Dave Dyson, Chief Executive at Three, said: “We are committed to unlocking unfair roaming charges for British travelers, not just in the EU but across the world. Our announcement today is testament to this, as we extend our popular “Feel At Home” service with two additional worldwide destinations, taking our total to 60 with 17 of those being outside of Europe.”

Three was the first network to scrap roaming charges back in 2013, allowing customers to use their allowances at no extra cost. Over time it’s continued to add more destinations to the list, not just across Europe, but also popular rest-of-world places, including the USA, Australia, New Zealand and Indonesia.

Dave Dyson continues: “We are doing this proactively for the benefit of our customers and not because regulators are forcing us to do it.  That’s what sets us apart and this approach means we will always be ahead of our competitors when it comes to fair overseas roaming.  I am proud that our customers can now use their phones as if they were in the UK in more than 80% of the destinations they travel to.  Our ambition is greater and we are moving quickly towards a goal of 100% of overseas travel, so our customers can stay connected and enjoy the freedom of using their phones whilst they’re abroad.”

The addition of Brazil and Singapore are in response to emerging and growing travel trends. Currently 450,000 Brits visit Singapore each year and, since the Olympics, more travelers are making the trip to Brazil, with nearly 200,000 visits in the last year alone. 

Three has also significantly overhauled its latest international calling offering for Pay As You Go customers by making it just 3p a minute to call directly to both landline and mobile numbers in India, Pakistan, Bangladesh and China. By June, a further 16 countries will be added to this list.

In a further move to simplify things for customers, this new PAYG international calling service is available without the complexity of having to remember the country pre-fix dialing codes. So you can now simply phone the number abroad without any prefix whatsoever.

Published in Telecom Operators

Mobile consumers are missing out on faster mobile speeds by networks’ hoarding large amounts of the airwaves used to provide a mobile phone service, claims UK mobile operator Three. Together, EE (owned by BT) and Vodafone are sitting on a pool of unused airwaves, commonly known as spectrum, which if redistributed could as much as triple mobile data speeds for customers of other operators, says Three.

“The amount of unused spectrum they hold is greater than all the spectrum currently owned by Three or O2 standalone,” said Three in a release. “Putting the unused airwaves to use would mean more seamless video streaming, quicker uploads to Instagram and faster browsing on the internet,” the operator claims.

Spectrum is essential to the mobile industry and the single biggest factor in determining a network’s ability to deliver speeds, capacity and coverage that consumers want and businesses need.  Three is part of the ‘MakeTheAirFair campaign’, calling on telecoms regulator Ofcom to cap the amount of spectrum that a single company can own at 30%. This cap would ensure a fairer balance in spectrum allocation, improving services across the board.

Research was conducted by Three’s Network team which created a model based on EE and Vodafone’s unused spectrum to show what speed improvements could be gained by customers on the Three and O2 networks. Dave Dyson, Chief Executive at Three UK, said: “This research shines a light on how much quicker speeds could be for mobile consumers, if only the UK’s airwaves were shared more fairly.” 

Dyson added: “BT/EE and Vodafone are sitting on a vital and finite public resource that should be used to deliver a faster and more stable service for customers of all mobile networks. A 30% cap on useable spectrum will deliver the best outcome for mobile users in the UK.”

UK’s current spectrum shares: 

  •  BT/EE: 42%
  •  Vodafone: 29%
  •  Three: 15%
  •  O2: 14%
Published in Telecom Operators

Global revenue made from telecom services is expected to reach over 1.2 trillion Euros in 2018, says research group Statista. The telecom sector continues to be at the epicenter for growth, innovation, and disruption for virtually any industry, and leading telcos aren’t holding back from the opportunity to capitalize on this growth. The latest example of this is AT&T, the U.S. telecoms heavyweight, and its recently announced $85 billion deal to purchase Time Warner that would create a powerhouse with control over a vast array of media and entertainment assets and the means to deliver them. The deal represents a big step forward for AT&T, but some analysts have voiced concern about the merger, saying it could lead to “self-dealing and discrimination” by a combined powerful media and telecoms provider.

More and more content is being consumed on-the-go nowadays, and this trend hasn’t gone unnoticed by telecom providers like AT&T. Mobile devices and related broadband connectivity continue to be more embedded in the fabric of society today, which means people want to be able to access their favorite content via their mobile device. Based on the results of Deloitte’s Global Mobile Consumer Survey (GMCS), U.S. consumers look at their devices over 8 billion times a day in total. That makes mobile content a big deal for all sectors within the telecom industry including wireless and wireline/broadband carriers, network equipment/infrastructure companies, and device manufacturers who are all critical components of this key ecosystem, says Deloitte.

Just look at Snapchat’s recent activities: it already hosted outsourced content from Mashable, CNN, and National Geographic to name a few, and in August, Snapchat announced an expansion of its partnership with NBC Universal, to host short-form versions of several of its popular TV shows on the Snapchat platform. This trend in consuming content on-the-go is likely what led AT&T to pursue a merger with Time Warner, which hosts a vast media lineup, including networks such as CNN, TNT, the prized HBO channel and Warner Bros. film and TV studio. It could also further AT&T’s bet that television and video can drive growth into a stalled wireless market.

“Premium content always wins. It has been true on the big screen, the TV screen and now it’s proving true on the mobile screen,” said Randall Stephenson, AT&T’s chief executive, who would head the new company. AT&T and Time Warner said they aim to be the first U.S. wireless company to compete nationwide with cable companies by providing an online-video package similar to traditional pay-TV. The merger will “disrupt the traditional entertainment model and push the boundaries on mobile content availability for the benefit of customers,” the companies said.

The merger will make AT&T a strong rival to Comcast, which owns NBC Universal, and aims to counter the growing threat from online rivals such as Netflix and Amazon which currently dominate the online consumption of content. It also positions AT&T – which recently acquired satellite TV group DirecTV – against its U.S. telecom rival Verizon, which has acquired internet group AOL and is in the process of buying Yahoo, and against new delivery platforms expected from Google and other players.

Will regulators be willing?

Massive merger deals are carefully exposed to the world with optimism by the players involved who expect to reap the benefits. For instance, AT&T’s merger with Time Warner could see it thrive in the content market, combining its strong network with premium content for its customers. But often mass mergers like this aren’t necessarily good for all parties in the industry – an issue that has been raised by various regulators around the world, such as the European Commission. Even Donald Trump, the Republican U.S. presidential candidate has expressed his distaste for the current proposed merger deal.

“As an example of the power structure I'm fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it's too much concentration of power in the hands of too few," Trump said at a recent campaign rally. Trump argued that the merger is an example of a rigged “power structure”. He also said he would look into “breaking” up Comcast’s acquisition of NBC Universal. "Deals like this destroy democracy," he said, expressing the need to minimize the taxation and regulation of American companies.

The question of whether regulators will accept AT&T’s merger with Time Warner is hanging heavily on AT&T, even though Mr. Stephenson played down any regulatory concerns in a conference call, arguing that AT&T isn’t eliminating a competitor, but rather buying a supplier, which isn’t blocked by regulators, The Wall Street Journal reported. “Any concerns by the regulators we believe would be adequately addressed by conditions,” he said. According to the WSJ report, on the contrary, former regulatory officials believe there could be significant conditions placed on the merger.

Earlier this year, a similar major European merger was blocked by the European Commission. CK Hutchison Holdings, the Hong Kong-based owner of Three UK, planned to merge with O2, Telefonica’s British arm – a merger deal that would have created the largest mobile operator in the country. But the European Commission blocked the merger saying it would have led to less choice and higher prices for consumers, by reducing the number of network-owning operators from three to four.

“Allowing Hutchison to takeover O2 at the terms they proposed would have been bad for UK consumers and bad for the UK mobile sector,” said the Commission’s competition commissioner Margrethe Vestager at the time. “We had strong concerns that consumers would have had less choice finding a mobile package that suits their needs and paid more than without the deal. It would have hampered innovation and the development of network infrastructure in the UK, which is a serious concern especially for fast moving markets.”

In a statement, CK Hutchison said it was “deeply disappointed” by the Commission’s decision and was considering the possibility of a legal challenge. “We strongly believe that the merger would have brought major benefits to the UK,” it said.

Even in New Zealand, concerns were raised in August this year over Sky TV’s merger with Vodafone New Zealand, due to similar competition reasons. Spark, one of New Zealand’s leading telecom operators, formally spoke out to New Zealand’s Commerce Commission about Sky TV’s planned merger with Vodafone New Zealand, the country’s other major telecom operator. Spark raised the issue over concerns that the merger was not in the best interest of sports fans and the content market. Spark argued that a merged Sky/Vodafone company would be able to leverage its “monopoly power” in the sports market to the detriment of consumers. However, Sky TV denied that it would be in its interests to tie its pay-TV service to Vodafone’s broadband service.

Similar concerns have been raised by John Bergmayer from the consumer group Public Knowledge, regarding AT&T’s merger with Time Warner. He says the merger could open the door to “self-dealing and discrimination” by a combined powerful media and telecoms provider. "DirecTV, for instance, might favor Time Warner content, crowding out or refusing to carry alternative and independent programming that viewers might prefer," he explained. "AT&T might also make it more expensive or difficult for competitors to DirecTV or to its streaming service to access Time Warner programmer, hoping to drive customers to its own platforms," he added. "AT&T could also give preferential treatment to its own programming and services on its broadband networks."

But not everyone is skeptical about large-scale mergers in the industry. In fact, some analysts think it makes sense given the changing media landscape – the same change that the likes of Snapchat have capitalized on. For example, Richard Greenfield of BTIG Research says the sector can no longer count on consumers watching "linear" TV and subscribing to expensive cable "bundles," with many opting for online services and on-demand viewing.

"Time Warner Chairman and CEO Jeff Bewkes and his senior management team can see where the entire legacy media world is headed: secular decline," Greenfield said in a recent blog post. "If Time Warner and its management team were confident in the future of the media sector, particularly the cable network industry, they would not be selling now," he added. "The harsh reality is that the legacy cable network business has been over earning for decades with an unvirtuous circle of pain about to begin."

 

Published in Reports

UK-based mobile operator Three, was recently chosen as the latest network partner for Google’s Project Fi network, a U.S.-based wireless service allowing customers to switch between 3G/4G and Wi-Fi networks to get the best possible connectivity available. Three is the first European mobile operator to be chosen as a roaming partner for the project, after T-Mobile U.S., Sprint, and U.S. Wireless.

But even though Three has been chosen by Google for the project, it does not mean that Google is taking the mobile virtual network operator (MVNO) service to Europe beyond roaming for U.S. subscribers just yet. Wired reported that Project Fi has allowed its subscribers to use their phones in over 120 destinations worldwide without worrying about hefty bills mounting up for data usage. However, Project Fi previously caped data usage at 2G speeds.

With the addition of Three, not only will data speeds not be capped, but it adds a further 15 countries to the total number of destinations to 135, meaning that subscribers will benefit from 3G or 4G speeds abroad depending on the country. That’s because Three currently operates in a number of European countries including the UK, Ireland, Italy, Sweden, Austria and Denmark, as well as Hong Kong.

In a blog post, Google said: “We're now able to deliver speeds 10 to 20 times faster than before. And, just as before, there are no extra fees for using data internationally -- you pay the same $10 (€9) per GB that you do at home…Fi customers now have access to high-speed data in over 97 percent of the places Americans travel internationally."

Project Fi is able to determine whether to connect to 4G or Wi-Fi for the best speeds by analyzing speeds from each network and predicting which network is the fastest at a user's location. Google first unveiled the project in April 2015.

Published in Telecom Operators