FutureFive NZ - ‘Skinny’ to lock users in

Warning: This story was published more than a year ago.

‘Skinny’ to lock users in

Telecom mobile’s youth-oriented sub-brand, Skinny, hasn’t even been launched yet, but is already in hot water over plans to ‘SIM-lock’ handsets to make it harder for users to switch networks.

SIM-locking means a handset purchased for use with Skinny cannot be switched to another provider, unless the user pays a $30 fee.

That may seem a small charge, but with Skinny targeting low-end youth users it could be a lot of money for many of the brand’s potential customers.

Rival 2degrees has demanded action from the Commerce Commission preventing Skinny from using SIM-locking, saying the practice is anti-competitive.

"This flies in the face of the competition New Zealanders have come to expect and deserve,” 2degrees chief executive, Eric Hertz, says in a statement.

"This is a cynical move to lock in the most cost-sensitive consumers so they can’t make a choice.”

Skinny manager Paul O’Shannessey says the policy will allow Skinny to subsidise their handsets, making them more affordable. Customers will only be locked in for nine months.

A spokesperson for Telecom says there are definitely no plans for the parent brand to start SIM-locking phones.

However, Hertz has dismissed these responses as ‘insincere’.

"This is not about better handsets – improved competition is already driving down the cost of feature-rich smartphones.

"Telecom says it will not SIM-lock customers on its XT network. That’s because business customers wouldn’t stand for it, and neither should young New Zealanders."

What do you think? Is SIM-locking a clever way to make handsets more affordable, or a cunning ploy to tie users in? Post your comments below. 

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