China Unicom earns government rebuke over contract
What should a 3G carrier do when its customers flea with their smartphones in hand — and you thought AT&T was bad — to a rival? For Apple’s sole iPhone partner in the Middle Kingdom, the answer is change contract terms to allow them to directly levy fines on customer bank accounts.
Bloomberg reports that China Unicom, which is Apple’s exclusive network provider there, has earned a rebuke from the Ministry of Industry and Information Technology over contract changes introduced on Nov. 22. What’s this all about?
In essence, the problem is this: scalpers have been buying up iPhones, which are in very short supply, at subsidized prices (i.e. with contract) from China Unicom and then reselling them. Whether this involves first paying termination fees (color me skeptical) or outright fraud, a lot of iPhones are ending up on rival China Mobile’s network.
“There’s a lot of publicity regarding this phone so the ministry is saying ‘you’ve got to be careful with this,’” said Paul Wuh, analyst, Samsung Securities. “They are subsidizing these phones and they want to make sure they get the most benefit from it.”
Damned if they do…
Thereupon, China Unicom changed its contract terms to allow it to directly withdraw money from iPhone buyers’ bank accounts should the iPhones they purchased show up on another network. To whit, the Chinese government has said that China Unicom should “respect and protect the legitimate rights and interests of telecommunications users, improve the service agreement, and improve service quality.”
My tea leaf reading comprehension might be a bit rusty, but it sounds like China Unicom is between a rock and a hard place with a competitor benefiting from handset subsidies it didn’t pay and their government, which is taking a dim view of their efforts to quell the problem.
“The ministry requires every enterprise to respect and protect consumer rights,” said a China Unicom spokesman. “Our new rules haven’t harmed consumer interests. It was in order to protect consumer rights that we issued these rules. It doesn’t mean the ministry is unhappy with the rules. They are not happy or unhappy.”
That’s an interesting spin on the situation…
What’s your take?
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December 4th, 2010
sim insart
December 4th, 2010
Hi there,
Today, I just bought an iPhone4 with 2 years contract from China Unicom and they didnt inform me of their new policy effective 01 December. I was very very upset so I decided to leave the phone with them and demanded my money back. (no luck but im not giving up)
I was even asked to buy accessories with 300yuan if not they would not release the phone to me… this is right out day light robbery!
FYI, I am a foreigner so I really need the phone to work outside China with a different carrier!!!
thanks, just venting my frustration…