The Perils Of Phone Subsidies, talked about several issues that consumers in parts of the world face when buying a new phone. But those were only one set of the problems. With the Competition Bureau of Canada announcing yesterday that they’re investigating Apple Canada’s supply deals with carriers to see if Apple used anti-competitive clauses, I figured I should cover the problem of device availability, in particular, the problem of carrier-exclusive deals. Carrier-exclusive deals, where a certain carrier becomes the only carrier to sell a certain model of phone for a period of time, have been going on for years. The first one I remember is Apple’s carrier-exclusive deals when the iPhone first came out. The idea is that it’s better for the phone makers to have the carriers promote the maker’s phones to the carrier’s customers, since they can tie the sale of the phones to the carrier’s services. It also saves the phone maker marketing expenses. So it’s good for the phone maker and it’s obviously good for the carrier. But as everybody knows, it really sucks for the customers. I’ve been burned by it before. In 2013 I was with a small carrier and I needed a new phone. I couldn’t buy it from my carrier because the big carriers were being given those phones a month before the smaller carriers. And of course, the big carriers would only sell me the phone if I signed up for a service plan with them, which I was certainly not going to do because their service plans didn’t suit my needs. Making matters worse, my carrier said that when they do get the phones, they’ll be selling them only to new customers for the first month. So, I basically had to wait 2 months for the phone. Within a few weeks, I was able to find an independent retailer who would sell me a phone — I discovered later that they got the phones from the big carriers. But the phone died after 2 months. I was extremely frustrated at the whole experience. Buying a phone should never be so difficult nor frustrating. I should be able to buy a phone
as easily as I buy a computer or a TV. Phones should be available to anybody who is on a compatible network and can afford them. People shouldn’t have to choose between the phone they want and the carrier they want. So how do we fix it ? Banning phone subsidies won’t fix it. Banning carrier-exclusive deals won’t solve the problem of lack of competition in the sale of phones. The real solution is to truly separate the sale of devices from the sale of services by banning carriers from selling devices, and banning device retailers from selling wireless service. Such a measure would force the carriers to find other incentives to get you to sign service contracts, such a giving you money back or service discounts, like most services do — the longer your service contract is, the lower your monthly rate. So what do you think: should carriers be banned from selling phones and device retailers banned from selling phone services ?