The same model is currently being employed by Philippine mobile telcos. For example, Smart has a retention program, where you can get a free handset (or discounted handset) with a 24-month lock-in period (that means you are tied up to Smart's service for 24 months; ending your contract prematurely is subject to pretermination charges); Globe has a similar program. I got my Sony Ericsson P1i that way (and before that, a Sony Ericsson K300i) from Smart. So the phone is locked, and I am locked to Smart.
Why lock phones in the first place? I think the main reason is to prevent a consumer from using a subsidized phone with another network. Makes sense, right? Wrong. This doesn't deter the consumer from SELLING the phone, even if it is locked; and they will earn much more from it, specially if the phone is free. Just browse the forums and see what I mean (like BNC or PinoyExchange). While the phone remains locked, there are unlocking options available anyway (except for latest s60 phones, which are unlockable at the moment).
His most potent argument against locked phones is this:
The carriers defend these restrictions partly by pointing out that they subsidize the cost of the phones in order to get you to use their networks. That's also, they say, why they require contracts and charge early-termination fees. Without the subsidies, they say, that $99 phone might be $299, so it's only fair to keep you from fleeing their networks, at least too quickly.
But this whole cellphone subsidy game is an archaic remnant of the days when mobile phones were costly novelties. Today, subsidies are a trap for consumers. If subsidies were removed, along with the restrictions that flow from them, the market would quickly produce cheap phones, just as it has produced cheap, unsubsidized versions of every other digital product, from $399 computers to $79 iPods.
Do you agree with Mossberg? I sure do.
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