3 is to glue its Sim cards into entry-level prepay handsets in a bid to hamper the box breakers that have diverted hundreds of thousands of 3 handsets from the UK market.
The move, starting this month, will see Sims glued into new ZTE handsets as well as new and refurbished Motorola C975s.
3 sales director Marc Allera (pictured) told Mobile that the move would guarantee that ‘the person buying [the phone] will be a genuine customer and won’t be selling it abroad’.
He said the move followed a test launch in selected 3 stores, which he described as successful. ‘We’ve done a trial pre-Christmas in our own stores, taken feedback from staff and customers, and we think it’s a practical solution.’
The Sims are being permanently bonded into handsets using epoxy resin. The process is being handled by handset logistics firm TRS.
‘We will be doing this on our entry-level handsets and those that aren’t secure,’ said Allera, adding that other handsets would be assessed on a ‘case-by-case’ basis.
Retailers Mobile has spoken to raised the issue of potential legal and competition concerns, however Allera dismissed these: ‘There is no legal issue.’
Ofcom’s director of communications, Matt Peacock, told Mobile that from a regulatory perspective the move was a physical extension of the handset or Sim-locking issue: ‘In November 2002 Oftel decided that improved consumer awareness of Sim locking is the best way to address the issue.’ The regulator defines Sim-locking as: ‘the practice where handsets are locked so they can only be used with the original provider of the service.’ This view effectively opened the way for operators to glue Sims into handsets, as long as customers are made aware of what they are being sold.
Allera told Mobile that he had a positive response from retailers to his Sim-sticking plans, although some raised concerns about customer service. One senior retailer described the move as potentially embarrassing: ‘How do you present this in a self-select environment? It’s not a great customer experience – we wouldn’t want to support that kind of proposition. I don’t want to have to explain what happens when a phone breaks at the point of sale.’
A top retail MD told Mobile: ‘I applaud opportunities to prevent box breaking, I’m just not sure this is the route. There are customer services issues.’