Handset locks have been available to mobile operators for several years. However, there are inconsistencies in the way in which they have been deployed between markets, within markets and across international mobile operator groups. The current report describes the wide diversity of handset lock strategies found across 31 operators in eight European markets. It poses and addresses the following questions in order to provide insights into best practices in the deployment of handset locks:

1. Operator Policies - What are operator motivations for the use handset locks and how/when are the different types of handset lock applied?
2. What are customer motivations when requesting a SIM lock removal?
3. What influences the level of charge an operator can apply for the removal of a handset lock?
4. What Risks and Rewards are associated with low/high charges for unlocking handsets?
5. What are the limitations of Handset locks and how should this impact on Operator strategies?

At the end of this report, the arguments cultivated in our analysis are harvested to present Recommendations for Operators when devising Handset Lock Policies.

Keywords: Handset Locking, Churn, Strategy, Policy, SIM Locks, Churn Prevention,

Table of Contents

1	Overview	1
2	Background	2
2.1	What is Handset Locking?	2
2.2	Technical Issues & Standards	2
2.3	Handset Locking Categories	3
2.4	The Handset Locking Process	4
3	Operator Handset Lock Policies	6
3.1	Austria	6
3.1.1	Mobilkom A1	6
3.1.2	T-Mobile	6
3.1.3	Telering	6
3.1.4	ONE	6
3.1.5	Hutchison 3	7
3.2	France	7
3.2.1	SFR	7
3.2.2	Orange	7
3.2.3	Bouygues Telecom	7
3.3	Germany	7
3.3.1	T-Mobile	7
3.3.2	Vodafone	7
3.3.3	O2	8
3.3.4	E-Plus	8
3.4	Ireland	8
3.4.1	Vodafone	8
3.4.2	O2	8
3.4.3	Meteor	9
3.4.4	Hutchison 3	9
3.5	Italy	9
3.5.1	Hutchison 3	9
3.6	Spain	10
3.6.1	TME & Vodafone	10
3.7	Switzerland	10
3.7.1	Swisscom Mobile & Orange	10
3.7.2	Sunrise	11
3.8	UK	11
3.8.1	Orange	11
3.8.2	O2	11
3.8.3	Virgin	11
3.8.4	Vodafone	11
3.8.5	T-Mobile	12
3.8.6	Hutchison 3	12
3.9	Policy Comparisons	13
4	Strategic Considerations when Establishing a Handset Lock Policy	15
4.1	Customer Motivations for Lock Removal	15
4.2	Consideration of a No Lock Policy	16
4.3	Influences on Unlock Charges	17
4.3.1	Competitor Policies	17
4.3.2	Regulator Intervention	18
4.3.3	Operator Strategy	18
4.4	Risks/ Rewards of High & Low Unlock Charges	19
4.4.1	High Unlock Charges	19
4.4.2	Low Unlock Charges	19
4.5	Limitations of Handset Locks and how this should impact on Operator Strategies	20
5	Recommendations for Operators	21