Thursday, July 1, 2010

Summary of Softbank SIM lock presentation (part 3)

Softbank's 13-slide presentation (archive) defended SIM locking, employed lots of cartoon images of crying and confused customers, and generally included more negative language than the other carrier's presentations. (The other carriers used the term SIMロック解除 - unlock; Softbank often used the term SIMロック禁止 - prohibition of lock.)

Softbanks lists four advantages to locking phones, 1) a "one stop" place to shop for cell phones and service, 2) a high degree of service though the linking of handsets to a particular network, 3) lower costs for consumers, and 4) a strong deterrent to cell phone theft. Softbank argues that mandated unlocking will remove the option for inexpensive, feature-rich phones, leaving the consumer with fewer choices.

Softbank also argues that the removal of SIM locks will not be of any advantage for Japanese handset makers attempting to enter global markets, and of course mentions that, at home, someone who switches carriers will lose access to the walled garden internet and carrier mail (i-mode, EZweb, yahoo keitai).  Even if a multi-band, multi-radio, multi-platform handset were created, it would take time to get it to market, be expensive, be very large, and have horrible battery life.

If phones are indeed unlocked, churn will increase, causing carriers to remove subsidies and handset prices will soar, which will severely limit the adoption of LTE because new handsets will be so expensive that customers will be forced to continue using their old 3G handsets. Network performance will seriously degrade due to the use of unauthorized handsets that haven't been stripped of bandwidth-hungry functionality (i.e., neutered). Customers will be confused and know not where to turn in the even of problems with their handsets, to the carrier? to the content provider? or to the handset maker?

Ultimately, this will result in a crime wave due to the utter loss of theft deterrent, with thieves running amuck in Japan, stealing handsets and selling them overseas as the entire Japanese infrastructure crumbles and society collapses all because of one... little... unlocked phone. (OK, maybe not.)

Finally, the last slide - the money shot, if you will -  showing that yearly shipments of new handsets decreasing sharply the last time the government dared to tell the industry how to behave.

Up until around 2008, the "1 yen keitai" was quite common in Japan. Problem was that the marketing was misleading because the real price of the phone was paid in jacked-up monthly service fees.  So someone who uses the same phone for an extended period of time ends up subsidizing the purchases of those who consider a cell phone to be a fashion accessory and buy a new one with the changing of the seasons.

(NOTE: Handsets that were purchased prior to the rules going into effect are STILL subject to the higher service fees today, and will be forever, so if you have a phone bought prior to 2008, you will save money on your monthly bill by buying a new one.)

The government eventually told the industry to stop that silliness.

Softbank complains in the last slide about the huge decrease in shipped handsets that resulted and fears a further decrease in handset sales if handsets are unlocked, since people won't be forced to purchase a new handset when moving to a new carrier.


  1. Yea that would be so terrible if I could buy a superior Android phone and use it on Docomo. I don't care if they unlock all phones just just remove IMEI filtering on the packet hodai plan!

  2. This was very enlightening! Thanks for posting this. I have a co-worker who has a phone from the Showa period! (exaggeration, but I always joke to him about it.) So I should tell him that it'll B cheaper if he gets a new phone! This is on ALL carriers right? He's on AU.

  3. My experience with this was with AU. I am only assuming it is the same for the others. Best to go into the store and see what plan he is on and ask if he can get a cheaper plan with a new phone.

    This is how it went for me:

    I was a customer of AU until just about a year ago. I went into the store to see about changing my plan because I hardly used voice - only really data - and figured there must be something cheaper. Well there was, but it wasn't available to me because I was using a zero-yen handset from 2007. They had this overly complicated chart showing all the plans. The same plan had two different prices. I was paying the higher price and said I wanted to pay the lower price.

    They said that I'd have to get a new phone to get the lower price because of the change to separating the cost of the phone from the cost of service, and that since I had a phone from the old way of doing, I would have to pay the higher prices... as long as I kept that phone.

    I pointed out that they had long since recouped the cost of the phone, so there is no longer any reason for me to pay higher prices. Of course that didn't get me anywhere.

    In short, the last slide of softbank's presentation makes the reason why clear: up until 2008, significant revenue was generated by the moving of handsets, and the carriers lost a chunk of that, so AU was never going to let me get the cheaper plan without first selling me a new phone.

    (I looked at them, but were absolutely no new compelling features, except perhaps for a random solar panel or pedometer. My old phone had the same battery life, same screen size, same one-seg tuner, same hobbled blue tooth capabilities, same keitai-osaifu, same OS, same everything as the new ones. Lame.)