Verizon is moving fast
Since 2008, Verizon has upheld a 60-day unlocking commitment as a condition of previous transactions. In May, it asked to be freed of the requirement, arguing it was unfair. The FCC granted the request on January 13, and soon after, on January 20, the company revised the policy for value brands like Tracfone, Straight Talk Wireless, and Visible.Previously, Verizon automatically unlocked phones 60 days after activation.
Under the revised policy, which applies to phones activated on or after January 20, phones will be unlocked upon request after 365 days of service.
What’s notable here is that Verizon pushed the lock-in for prepaid customers to the CTIA Consumer Code for Wireless Service’s absolute limit of one year.
This shift doesn’t bode well for postpaid subscribers, and hints that it may not necessarily stick to the six-month industry standard.
Fighting churn
Light Reading reports that New Street Research says that Verizon‘s postpaid phone churn has climbed 0.14 percent since 2018, while it has gone down for AT&T and T-Mobile. Churn is the rate at which customers leave a company.
There was a time when the postpaid churn was the lowest at Verizon. T-Mobile now holds that title.
New CEO Dan Schulman is looking to stem the tide. A longer lock-in window can help to retain customers to some extent.
Verizon will likely keep the unlocking policy competitive, but since the process won’t be automatic, it will introduce friction, which could slow down churn. Besides, customers will have to fully pay for the device for it to qualify for unlocking, which isn’t the case right now.
Leveling the playing field
In 2024, the FCC was weighing a uniform 60-day unlocking policy for all carriers. This prompted a backlash from AT&T and T-Mobile, who warned that such a move would make it harder for them to offer generous discounts.The FCC now believes that a 60-day period is not enough to snuff out fraud, and it has now adopted a standardized approach of requiring carriers to adhere to CTIA’s guidelines.
It’s a letdown for customers and another sign of the power that the Big 3 now wield over them.
