Friday, July 2, 2010

Final thoughts on SIM lock presentations (part 4)

So now we know the four carrier's official opinions regarding SIM unlocking, and perhaps what they really think as well. Looking through each of the presentations was quite insightful and cleared up a few things in my head about why some things are the way they are. Unfortunately, it also raised more questions. Here I will try and put all this together, but there are a number of uncertainties. Trying to make sense of this industry and the government is like herding cats.

What are the real motivations of each carrier?

Docomo and E-mobile are both in favor of unlocking, though E-mobile would like to see a more fair allocation of frequencies, since they only have the 1700 MHz band, which no one else really uses. Docomo comes off looking like the good guy to customers, but it doesn't take a genius to see what they really want is the iPhone and iPad and could just as easily use their muscle against SIM unlocking if they already had what they want.

As they said in the press conference prior to the meeting, AU is against it because they are left out of the party with their incompatible CDMA-2000 network, which will most likely be used for voice even after the introduction of LTE. If this is the case, AU should focus on selling high-speed data plans for the slew of LTE data-only tablets sure to follow the iPad.

Softbank is naturally against it, offering up a number of arguments based on questionable logic, but then again it is easy to understand their real thinking, especially since Son already admitted that Softbank's network is inferior to Docomo's and an unlocked iPad would have left them at a severe disadvantage.

Will SIM unlocking happen?

No, it didn't.

I haven't had a chance to read the new guidelines released two days ago, but the government will only "urge" carriers to unlock phones sold from 2011. Docomo may do it, Softbank most certainly will not. So no iPhone or iPad on Docomo, at least for the time being.

Given the circumstances this is probably the correct decision, though not because I think the government was convinced by Softbank's arguments, which I would classify as FUD.

The government shares in the blame for softbank's comparatively poor network by denying softbank's request for an allocation of the 800 MHz band, which gives Docomo's network better penetration inside buildings, underground, and in mountainous areas. Softbank is trying to compensate by supplying free femtocells to customers. Government mandated unlocking would almost certainly result in a one-way flux of customers from Softbank to Docomo. That would be very unfair.

What about the incompatible platforms?

The argument that incompatible platforms are grounds for not mandating unlocking is erroneous.

The walled garden internet and carrier mail platforms (i-mode for Docomo, EZweb for AU, and Yahoo Keitai for Softbank) will simply not work if a "feature phone" is taken from one carrier to another. This will effectively prevent people not using smartphones from switching carriers.

But, as far as I know, the reason the MIC began reconsidering SIM locks was due largely to increased usage of smartphones, which are incompatible with the above platforms in the first place (the iPhone being somewhat of an exception). And, as shown by E-mobile, it is projected that smartphones will soon account for around 40% of all handsets globally.

What will be the effect of LTE?

Probably none at all, in the beggining at least.

Docomo is planning to start LTE service at the end of the year (See AU's chart). For the next couple of years, Docomo will be the only option for LTE (3.9G) handsets, so there is no reason for the MIC to reconsider unlocking. Of course LTE handsets will also be compatible with 3G, so it is conceivable that a "4G" phone could be released by AU or Softbank.

So if the "iPhone 5" is a "4G" phone, the only place for it will be Docomo? Yay!

Not necessarily.

According to AU's LTE chart, Softbank plans to begin operation of a DC-HSDPA network in January 2011 and begin offering service in July 2011. Who knows what real world speeds this network will get, but assuming the average iPhone user gets 2 - 3 Mbps, it is likely that users could see a 10x increase in speed. That is a significant increase and would certainly seem like "4G".

And of course, Apple releases the new iterations of the iPhone, pretty much like clockwork, right around July of each year, 6/29/2007, 7/11/2008, 6/19/2009, and 6/24/2010, respectively for the four iPhone generations. If this pattern continues, the "iPhone 5" should be released right about the time softbank can begin boasting of a ten fold bump in network speed. Hmm....

Could this result in IMEI Registration with Docomo?

Perhaps, but not necessarily for overseas phones.

It is well known among the smartphone-toting foreign community that Docomo refuses to sell ala carte SIM cards. While an unlocked phone is fully capable of working on their network, it is prohibitively expensive to do so because the unlimited data APN is filtered by IMEI number, even for people who have properly subscribed to the "biz-houdai" plan. This means that if you didn't buy a phone from Docomo, you cannot get unlimited data. Rather you will pay the full packet rate, which would result in monthly bills easily in excess of ¥100,000. Check out this post for an epic screenshot showing a guy on softbank who used ¥13,805,678 (currently $156,217.01US) worth of data packets in one month prior to the flat rate being applied (Login my be required.) That amount is so huge, I initially misconverted it in my head to only $13,000!

Softbank's presentation included the threat of very heavy network usage from handsets that can do things like tethering and heavy streaming, such as skype over 3G. Now that I think about it, this is probably the reason Docomo doesn't register IMEIs.

Now that the MIC is only recommending that cellphones be unlocked, after being so strongly for unlocking, Docomo would appear very hypocritical by not accepting unlocked phones. On the other hand, if no other compatible carriers (i.e., softbank) unlock phones, then there will be no unlocked phones to accept. Fortunately, according to Docomo's comparison slide, Docomo also uses the 1700 MHz band from Osaka to Tokyo, covering a large chunk of the population. So technically, E-mobile is also somewhat compatible with Docomo.

But overseas phones could still be excluded.

The preliminary unlocking guidelines made no mention of overseas handsets, and I assume neither do the final guidelines (will have to confirm later). In fact, the guidelines require carriers who participate in unlocking to begin sharing IMEI numbers to prevent the use of stolen phones, but this database would contain no information pertaining to overseas phones. The easiest and logical way of setting up a database would be to share blacklisted IMEIs and deny service to those devices. But what if the carriers decided to share all IMEIs and only approve service to those on the list? This would not be an efficient way of doing things but it would have two benefits (from the carrier's point of view):

  1. Remove the risk of/responsibility for providing service to someone in possession property stolen from overseas.
  2. Soften the anticipated decline in handset sales that would accompany unlocking.

Anyone living in Japan long enough has encountered the bazooka/fly swatter scenario.  Though a fly swatter is perfectly capable of fixing the problem of an unwanted, winged insect, a bazooka is brandished, effectively killing the fly while taking out the entire wall and anyone unfortunate enough to be standing behind it. A good example of this is, as a means for combating spam, the default bouncing of any email not sent from a Japanese cellphone, which assumes all mail from PCs to be spam. Similarly, any phone purchased overseas could be stolen.

If the carriers perceive there to be even the slightest risk of one phone stolen from overseas being used on their network, they could just outright prevent all overseas phones from being used. A good "tatemae" for the "honne" of selling handsets, indeed.

Is SIM unlocking really going to increase phone theft?

Of course not, but that doesn't matter. What matters is whether risk is perceived.

For people involved in the fencing of stolen handsets, with the technical means of spoofing the IMEI number to circumvent blacklisting, a simple SIM lock isn't going to be anything more than a mild annoyance at most.

In this respect, locking down of hardware is similar to DRM in digital content, which serves only to annoy and alienate loyal law abiding customers while doing absolutely nothing to prevent the spread of pirated video.

(Side note: For those of you who's first experience with linux was Android, watching a DVD on a linux computer is actually in violation of the terms under which one bought - I mean "licensed" the right to posses - said DVD because the CSS decoder must be licensed for a fee by the maker or the hard/software that decodes and plays the video, which is something that obviously no one involved in linux development has done. Many popular Linux distributions do not contain the required library pre-installed, but it is typically in the corresponding repository and easily downloaded. This is also the case when watching a DVD with the very popular VLC.)

12 comments:

  1. Great insight, thanks!

    Isn't there a cap at around 13.000 Yen if you tether on Docomo? Even though I think the surcharge should be much less this is an acceptable solution whereas the data bills from Softbank (I had one beyond a thousand USD just for using a Nokia phone, not even tethering) are just ridiculous.

    On Docomo VOIP such as Skype is possible with their own HT-03a and data flat rate so I don't see how this could be the reason for not applying the data flat rate to foreign phones.

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  2. I think docomo has a plan for tethering, but I'm not sure as I have no need for it ;)

    Wait a minute, when did skype release a proper android client that doesn't use voice minutes for skype calls? I know there is fring or sipdroid and whatnot.

    Basically, my current thinking is that they don't want any device connecting to the all-you-can-eat data APN unless they have approved the device and what it is capable of doing. Yes, it doesn't make sense because there are indeed voip apps for Android, but who says they actually have to have a logical policy?

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  3. As far as I know Docomo's 13000 yen limit is applied automatically if you use biz-houdai out of the defined limitations, like tethering or using a non-Docomo phone. So the maximum additional cost for any use case is just 7000 Yen on top of the regular 6000 Yen which you pay for the flat rate. That's a lot better than what Softbank does to its customers who not knowingly use "unauthorized phones" or tether their smartphone.

    Concerning Skype, I think they do have a small app but I am using Fring and Sipdroid. Especially VOIP over Sipdroid works very well. I receive phone calls on my regular European landline phone number on my mobile phone in Japan for free, how great is that.

    Why don't you have a need for tethering? Just don't connect a PC or do you have another good solution for surfing on the go? ;-)

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  4. I'm not sure how they apply the cap. I should look into that.

    If they do indeed automatically apply it if they think you are tethering, that would be very nice of them, considering that softbank does indeed not do that. I've been asking around and have yet to hear a story of someone actually getting caught by docomo for tethering. I got the impression that docomo is not really looking for it, but if you do something crazy like download 1080p movies on bit torrent all day long while tethering, I'd guess you'd probably get caught.

    By the way, if you use a non docomo phone, they will not apply any cap - as I said in the post, you can't access the biz-houdai APN, so you will have no choice but to pay the full packet rate. When I got the HT-03a, it had both the moperau and the biz-houdai APN pre configured and they told me that if I accidentally used the moperaU APN, I would get the full packet charge, and if I was even unlucky enough to be using it when an OTA update came, that I could expect to pay 100,000 yen, just for downloading the update.

    As a user of fring and sipdroid, can you share your thoughts on which one is better? How exactly do you have your landline set up with it? Did your local phone company release the number and you then bound it to an IP phone service provider?

    haha, I purposely wrote that sentence to be vague, as in if I don't have a need for tethering or I don't have a need for paying an extra 13,000 yen a month for it! (I say as I am sitting on the train, typing on my notebook while tethering to my phone.)

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  5. OK, I think I got you about tethering. Actually I didn't want to talk about it too loud but from personal experience I also get the impression that Docomo isn't looking into it. But before I knew that I asked in the shop and read the fee structure and understood that the 13.000 cap is automatically applied (for biz-hodai customers).

    I wasn't aware of the two different APN. Scary. And too bad that even the 13.000 Yen cap is not applied to foreign phones. Have you heard of cases on Docomo with high charges? It's hard to imagine that they would no apply the 13.000 Yen cap on a foreign smartphone when they explicitly state that you can use it for access even with a PC (tethering) which causes much more traffic.

    Fring seems to work fine, I have tried Skype chat and talk with it. But I didn't like the interface and since I am not a big Skype user I recently only use Sipdroid with a SIP phone number for my international calls (and somehow it is possible to connect to Skype with it, too). SIP phone number are given out by various companies, some of them free and completely online within minutes. In my opinion SIP is far superior to any other VOIP standard. Voice quality is great and there are many cool things you can do with it. I even have a regular (like a landline type) phone in my apartment hooked up to it, don't need a PC or anything else running for it, just an Internet connection and it has a landline phone number. When someone calls that number all connected phones ring and I can pick up the call for free where I want. In my case owning that number is completely free and calling rates to landline and mobile phones are comparable to Skype out. In many ways it's even better than Google Voice though GV might have other features which I am not aware of (like visual voicemail).

    Unfortunately like with so many other technologies, Japanese IP phone services are not compatible so you cannot get a free local SIP number in Japan. But of course you can connect it to SIP number from outside of Japan. If you see how VOIP can work with SIP you realize what a ripoff the Japanese IP phone services are.

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  6. Thanks for the thoughts. I figured that you figured what I was talking about re tethering. I don't think it is a problem to talk about if because docomo must know that people can root their android phones and do whatever they want. I do avoid posting softbank's APN password publicly because it once got to easily googlable and they changed it.

    Like I said regarding foreign phones, the policies don't have to make sense, at least from our point of view. From the point of view of maximizing handset sales, it makes perfect sense, especially if you can say that there is no guarantee that the phone isn't stolen.

    Get back to you on voip and android - probably that deserves an entire post.

    I have a number of opinions on how most traditional telcos do IP phones, and none of the are good. The worst culprit that I've experienced in NTT, which is the gatekeeper to all Japanese landlines, but again, probably deserves an entire post.

    Send me an email. Let's talk.

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  7. Ooops, first line should say "I found your blog last week and it's very interesting."

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  8. I found your last week and it's very interesting.

    A couple of points:

    1. > Docomo refuses to sell ala carte SIM cards
    Docomo does sell a data-only sim, as of June this year. B-Mobile also sells a data-only sim. Granted, these don't allow voice, but if you have a smartphone, you could use it for data and have a cheapo voice only phone for calls.
    http://breakingart.com/blog/2010/06/01/the-ipad-comes-to-docomo/

    2. According to Softbank themselves, Apple does not have a contract keeping them tied to Softbank. They could release iDevices on Docomo, so either Docomo isn't offering them favourable terms, or Apple is refusing to release on Docomo because Domoco originally rejected the iPhone and Apple want to punish them:
    http://breakingart.com/blog/2010/06/30/apple-softbank-shocker/

    Keep up the blog. It's a great read.

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  9. Thanks!

    I've got a series of posts on b-mobile, which is limited to only 300 kbps and no youtube due to throttling. I was just looking last week for docomo's pricing on the data SIM they plan to release for their 3G router and NTT's hikari portable (rentable by flets customers for 315 yen/month), but I still can't find details online. I am fairly confident that the Docomo SIM won't be an option to directly stick in the iPad (Even after chopping) due to their IMEI filtering.

    There are two types of Hikari portables, one SIM free (can be used with E-mobile) and one SIM locked that can be used with Docomo. This means you can't use the unlocked on with Docomo. I am guessing it is going to use the biz-houdai APN, and only the locked routers will have IMEIs registered with Docomo.

    Indeed, it is becoming more and more likely that the Japanese iPad is actually not SIM locked but effectively locked due that frustrating little F***ing SIM card. I am waiting for confirmation with someone sticking in a chopped b-mobile SIM. I have already heard of people using chopped B-mobile SIMs in US iPads but not yet on the Japanese model.

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  10. The main problem with docomo's sim plans that I linked to above is the ridiculous cancellation charge - from over 20000 yen to a minimum of 10000 yen. Even after 2 years, you need to pay 10000 yen to cancel.

    Remember that the bmobile chip can be used in their WIFI router.
    Granted, it's 20000 yen, but then it can give wifi to all your devices. No You Tube on the iPad isn't a big deal because the quality sucks over 3G due to Apple limitations. I would be annoyed if Mocha VNC didn't work though.

    BIC currently have Wimax with a 5000 yen WIFI router and no cancellation fee after a month.

    That all said, given that my iPad has WIFI connection issues - suddenly rejects valid WIFI passwords and requires a reboot - I am not sure I would trust a WIFI only iPad.

    BTW It isn't possible to comment on your blog from an iPad.

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  11. My thoughts on b-mobile is that it is great for casual usage but the terms state that it can't be used to stream anything, so VOIP is also a no-go. It also says:

    他社プロバイダやリモートアクセスサーバへの接続はできません

    I am not sure if "remote access server" is including VNC and VPN, but it doesn't sound good for using these services.

    If I was looking into getting a 3G router right now, I'd go with NTTs Hikari portable because I am a NTT East flet's subscriber and it can be rented for 300 yen plus tax per month and then used with either e-mobile or b-mobile, or with Docomo (presumably under the conditions you mentioned) if you get the locked version.

    20,000 yen ain't bad for purchasing a router, but just knowing that LTE will be available from the end of the year makes me hesitant to spend any money at all on gear that isn't LTE capable.

    Can you post a link to the BIC product?

    Disqus is the problem with comments. Sometimes it won't fully load all the necessary bits to comment over 3G when tethering. It is impossible to comment with mobile webkit on android, so I assume the same is true with the iPad. If I move to wordpress, I may dump disqus since wordpress's native comment system is adequate (where blogger's is not).

    By the way, if you are looking for app ideas, if the post office's database is queriable, a great app would be one that adds the location services which are built-in to the mobile version of the page but only for i-mode, ezweb, and yahoo! keitai.

    http://www.jp-network.japanpost.jp/mobilephone/

    Clicking the top link on a regular cell brings up a list of ATMs that are close by and currently open - I really miss that.

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  12. Oops for got to add the link to the mobile site.

    http://map.japanpost.jp/m/a_select.php

    And Damn disqus for not letting me edit a threaded reply when nesting comments are no longer allowed.

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