With Bell and Telus having launched their new 3G network, there’s a new interest in getting unlocked cell phones in Canada.
If you’re not familiar with the term ‘unlocked,’ here’s the short version: when you purchase a cell phone in Canada, it is usually programmed to only work with the provider you bought it from. Why? Wireless providers in Canada and the USA typically use what’s called the “razors and blades” business model (named after the strategy employed by Gillette) where they will discount or subsidize the cost of a mobile handset (the razor) in order to attract customers who pay for recurring subscriptions (the blades). “Locking” a handset to a particular service ensures that customers will use the carrier’s services for the near future, or at least as long as a contract or “service agreement” is in place.
Unlocked handsets enable consumers and business subscribers to take their phone from provider to provider while avoiding lengthy contracts and potentially devestating early termination fees.