updated 07:00 pm EDT, Fri October 26, 2007
Sprint to unlock phones
In order to settle a class-action lawsuit, Sprint has agreed to provide customers who cancel their contracts, or whose contracts have expired, the code necessary to unlock their phones for use on other carriers. Since Sprint operates on CDMA, this would allow the phones to work on any competing firms' network that uses similar technology; that includes Verizon and Alltell. (AT&T and T-Mobile use GSM, meaning even unlocked Sprint phones won't work with those carriers). Plaintiffs in the suit claimed that Sprint's lock was a barrier to competition because it forced switchers to other carriers to buy new phones.
The settlement has potentially deep-reaching ramifications for the rest of the wireless industry, including AT&T, to whose network Apple's stunningly popular iPhone is currently locked in the United States. Apple and AT&T have together faced a number of similar suits over the iPhone's terms of service, including $600 million class-action litigation, which claims the two firms illegally agreed to prevent owners of the cellular device from using programs or services that do not generate revenues for the two firms
Apple estimates that 250,000 iPhones were sold to people who had the intention of unlocking the mobile handsets so that they could be used with wireless providers other than AT&T. Those unlocks were made through the efforts of an astute group of hackers that consistently cracked Apple's stopgap measures to enable use outside AT&T under subsequent iPhone firmware revisions.
While the AT&T lock may fly under current US law, Apple is having some problems striking similar deals in other countries. French iPhone carrier Orange will sell the iPhone in both locked and unlocked versions for the country, according to a company spokeswoman. The move is most likely a necessary response to French law, which stipulates that phones cannot be sold solely under contract. This and heavy revenue demands from Apple are said to have once threatened the arrival of the iPhone in France, although this view is disputed by Mandrine. "This [delayed announcement] did not have to do with locking or unlocking the phone," she says. "It was about finalizing the commercial agreement."
Any precedent forcing Apple to sell unlocked iPhones could have a pernicious effect on the company's bottom line; the company is reportedly reaping revenue shares of anywhere between 15 and 30 precent from exclusive carriers.