Translation and explanation of revised Japanese SIM lock guidelines

Edit: I forgot to mention the best part. Not only will it be free, it will also be automated, meaning no more painful, time consuming experiences dealing with untrained shop staff. And, that of course means you will be provided with the unlock code.

I've now read the updated SIM unlocking guidelines from the Ministry of Infrastructure and Communications (MIC). I've also translated them below.

In short, I'm very pleased with the new guidelines. They are short, concise, specific, and (most importantly) thorough. I was worried that the MIC would focus narrowly just on SIM locks, leaving carriers free to cripple phones by a myriad of other means, such as locking out the APN settings menu on the phone (like Apple typically does).

The guidelines specifically state that any other restrictions added by carriers should be removed. Hopefully this means the end of the Docomo's automatically changing of APN when tethering, which breaks tethering with MVNOs, other SIM cards, and the mopera.net ISP.

The guidelines also specifically state that carriers can no longer unlock a phone then refuse to provide service using non sequiturs like "because your phone is unlocked we are no longer able to service it." That is as logical as saying the train was a minute late because I put ham in the refrigerator.

Carriers will also be required to specifically disclose which frequency bands a phone supports,  as well as what services will cease to work. Currently, getting this information from docomo is tedious and uncertain.

Phones will still be sold in a locked state, and the guidelines allows for an a short period of time that the phone cannot be unlocked.

It would seem that Juggly was right (as usual). There is no room at all that I can see for carriers to take an opposite approach and cripple unlocked phones.

The guidelines do not go in effect until May 2015. Though there is a clause stating that these guidelines should apply to phones announced before that date, I do not at all expect that to happen. In that sentence, there was a line break that caused me to read over a very important character, 前. The old guidelines will apply to existing phones. Purchase phones that initially go on sale after May 5.

(なお、それ以前に発売された端末については、平成 26 年●月改正 前のガイドラインの趣旨に沿って適切に対応することが適当である。)

For the iPhone, this would mean the next iteration that would presumably become available around October/November 2015.

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(Anything in [brackets] is added by me.)

May 2010 (Revised: 2014)

Overview

Currently in Japan, handsets provided by MNOs are "SIM Locked," preventing usage on other mobile networks.

Users of these devices have expressed the desire to both use their domestic devices while overseas with locally-obtained SIM cards and to continue using the same phone after porting their number to a different MNO.

Due to problems arising from large differences in specifications [i.e., WCDMA v CDMA-2000], frequencies, and platforms [i.e., carrier mail, etc.], individual MNOs were requested to voluntary abide by the "Guidelines Concerning SIM Locks" in 2010.

However, unlocking by MNOs remains limited at present. In addition, SIM locks have not only hindered users, but have also increased the cost to other MNOs of acquiring new customers, partially leading to the [unreasonably] large cash back offers.

Now, the spread of LTE and smartphones has changed the mobile marketplace, increasing interoperability of specifications and frequencies between MNOs. Therefore, both the basic and specific points of these guidelines should be adjusted accordingly.

Note: The guidelines defined 役務 (service) as electronic communication services concerning mobile phones, including mobile phone access service, 3.9G [LTE] access service, and virtual mobile electronic communication services associated with mobile phones.

Ministry Opinion

Article 29, Paragraph 1, Item 12 of the Telecommunications Business Act of 1984 allows for the invoking of measures to reform telecommunication practices that are unreasonable or unjust and may or do result in unsound industry development or are not in the best interest of the populace.

SIM locks constitute an inconvenience that prevents receiving service with existing handsets upon switching MNOs, as well as usage of a locally-obtained SIM card while overseas. SIM Locks further increase the cost incurred by MNOs in recruiting new customers and are the cause of differentiation in service fees and content [between new and existing customers], hindering competition. SIM locks are also the root of the large cash back offers used to acquire new customers that are promoting an unfair situation between longterm users and those who frequently change MNO.

However, MNOs have expressed the following concerns regarding not implementing SIM locking. 1) Lack of full support by other MNOs for unlocked handsets may cause confusion for users. 2) Compared to a market with locked handsets, promotional costs will increase, likely resulting in retail prices above current. 3) Loss of incentive to develop original brands and services.

Regarding 1), it is appropriate to leave the decision to users after sufficient explanation. Regarding 2), it is not likely to cause a large problem considering the typical user situation in which an amount equivalent to the handset cost is discounted monthly from the service cost. Furthermore, the cash back amounts at the time of purchase have become excessive, creating an unfair situation between longterm customers and frequent switchers and becoming a problem for fair competition. The removal of SIM locks is expected to result in restraint regarding these promotions. Regarding strategies for original branding (3), rather than using SIM locks to forcibly retain customers, it is preferable to develop and provide services that take maximum advantage of a handset's appeal.

Thus, the above concerns do not constitute proper and reasonable grounds to continue SIM locking. Finally, the traditional problem for unlocking (incompatible frequencies, standards, and specifications) continues to be lesser and lesser of a problem.

Considering the above, MNO's users (including those who have already cancelled service) have called for unlocking handsets, and in the lack of valid justification to the contrary from MNOs, it is necessary to invoke measures to reform current practices under Article 29, Paragraph 1, Item 12 of the Telecommunications Business Act to protect the interest of users and foster sound industry development.

Specifics for SIM unlocking

1. Eligible handsets
   
   1. Carriers should in principle remove SIM locks from all handsets.
   2. Refusal to remove SIM locks is limited to cases that would result in unfair competition or excessive hinderance to usage with other carriers. (This applies to specialized devices that pose technical issues, i.e., nonstandard mobile specifications or frequencies and does not include general usage devices such as those commonly known as feature phones, smartphones, tablets, mobile routers, and USB modems)
2. Unlocking process
   
   1. Carriers should whenever possible quickly and simply conduct unlocking through the internet or over the phone at no additional cost. (Alternate means for unlocking at no cost does not preclude the levying of a service charge if in-store unlocking is performed at the customer's request. A service charge may also be levied against customers with no active service contract for in-store unlocking.)
   2. Carriers may make exceptions and add a limited no-unlock period to prevent improper use of unlocked phone and mitigate the risk of loss of subsidized phones
3. Unlocking process should be set in advance and publicly disclosed

Points to note during SIM unlocking

1. Explanation to Users
   At the time of handset sale, SIM unlocking, or conclusion of a service contract, MNOs should make reasonable effort through means such as in-store explanation, pamphlets, or websites to ensure that the user understand the following points in particular.
   
   1. At time of purchase
      
      1. Whether the handset is eligible for unlocking
      2. The conditions and process of unlocking
      3. Which mobile services, applications, etc. will be partially or fully inoperable with another MNO SIM card
      4. The frequency bands supported by the handset
   2. At time of unlocking
      
      1. The conditions and process of unlocking
      2. Which mobile services, applications, etc. will be partially or fully inoperable with another MNO SIM card
      3. How to obtain service or repair for the unlocked handset
   3. At time of contract conclusion
      Which mobile services, applications, etc. will be partially or fully inoperable with another MNO SIM card
2. Clarification of means for inquiry by users of unlocked handsets
   MNOs should consult with handset makers to prepare and clarify a means to perform service on unlocked handsets.
   
3. Confirmation of proper technical certification
   MNOs should make efforts to confirm that uncertified phones are not used on their network.

Others

Because it is desirable that unlocked handsets are as fully functional as possible, appropriate effort should be made to remove together with the SIM lock any additional restrictions on functionality that were set by the MNO.

Implementation of these guidelines

1. These guidelines will be applied to new devices brought to market after May 5, 2015. It is further appropriate to suitably apply the pre-2014 guidelines to previously announced handsets.
2. The Ministry of Internal Affairs and Communications will reevaluate these guidelines as necessary following based on the situation following implementation.

An alternate view on the effects of compulsory SIM unlocking

Well, It’s official. Sōmusho, The Ministry of Internal Affairs and Communications (MIC), will oblige domestic carriers to remove the restrictions preventing the devices they sell from operating with another carrier’s SIM card. The requirement will go into effect sometime during the next fiscal year, which starts from April 2015.

I’ve already made clear what I think will happen, and I can sum it up with one word: NOTHING. I don't fully understand what the MIC realistically can and (more importantly) will do to carriers that fail to comply, and everything that I have seen so far indicates that the MIC is narrowly focusing on the just the SIM card.

The MIC is trying to change the status quo of an entire industry, and I'm not convinced that industry will just happily comply. There are a ton of alternate ways to cripple devices to prevent reasonable exchange between carriers, while still abiding by obligatory SIM unlocking guidelines. This should not be news to the MIC – Docomo does it right now (device-side locked tethering APNs, network-side IMEI filters on data connections, carrier mail that only works with docomo phones).

And let's also not forget that, when forced through arbitration with the MIC to create transparent MVNO guidelines, NTT docomo began employing allegedly fuzzy math, putting MVNOs that use the open route at a financial disadvantage to MVNOs who strike closed-door, old fashioned deals with docomo. (Is it really a coincidence that MVNOs with closed-door contracts appear to have have lower latency and faster speeds?)

An Alternate View

This morning I read this post by Juggly (that's the name of his site but also what I call him), in which he describes what he thinks will be the result. In summary, his opinion is the exact opposite of mine. Juggly has consistently been a good source of information, which has (apparently) caused him some trouble.

I value Juggly's opinion, so below I'll layout the gist of Juggly's post. I am interested to hear your thoughts on where this is going. Basically, this sounds good if you're the type of person likely to buy a phone at a reasonable retail price with no subsidy. If you rely on carrier subsidies, this is probably bad news for you.

• Rather than focus on locking their stuff down in an attempt to keep customers tied to their networks, carriers will open things up in an attempt to lure customers away from rival carriers.
• This would be done revamping current services like carrier mail to work on any phone, not just on carrier-branded devices, which is basically the case now.
• A lot of handset sales will eventually come to be through separate retailers. These will be unlocked and ready to go on any domestic carrier (i.e., the original Nexus sales model).
• International makers will eventually come to sell phones officially in Japan, reducing costs of handsets traditionally only available in the gray market.

Can the MIC really "oblige" Japanese carriers to unlock phones?

The Jiji Press is reporting that the Ministry of Internal Affairs and Communications (MIC) is going to “oblige” carriers to remove SIM locks on handsets. How, exactly, the MIC plans to do this is a mystery to me. The MIC issues “guidelines” that the carriers are supposed to follow but don’t really have to.

Here is an excerpt from the shorther Japanese version of the article because the English version is only hosted in a place to which I no longer link.

総務省は２７日、携帯電話会社が販売した端末を他社回線で使えないように制限する「ＳＩＭロック」を原則、解除させる方針を固めた。ＳＩＭロック解除は、２０１０年６月に指針が示されたが、義務化が見送られたため、大きくは進んでいない。このため、総務省は指針の抜本的な見直しが必要と判断した。

On the 27th, the MIC decided to strengthen guidelines requiring the removal of SIM locks that prevent handsets sold by mobile carriers to be used on different networks. Unlocking guidelines were set in June 2010, but there has been little change because the MIC put off making them compulsory. As a result, the MIC has determined that it must radically review current guidelines

The article goes on to say that the MIC plans to convene a panel of experts from the 30th to devise a detailed strategy by the end of the current fiscal year (next March).

The English version goes on to talk about separation of subsidy and service cost:

In Japan, by contrast, the major carriers put SIM locks on their most popular handsets and offer sizable discounts on them to lure new subscribers. Smartphone users whose Internet use is limited and long-time subscribers are both upset about the expensive monthly rates being used to finance such discounts.

Thing is, the MIC has already obliged carriers to separate hardware discounts from monthly fees. Those of you who have been in Japan for a number of years should clearly remember the hoopla surrounding the death of the zero-yen keitai that this was supposed to cause, and when SIM unlocking was first debated, Softbank used the impact on handset sales as justification for keeping SIM locks.

The Gloom and Doom cometh!

So carriers are supposed to separate subisdy costs from service costs but consumers complain that they don’t do this. There’s always wiggle room for the carriers. This time, imagine that somehow the MIC manages to make carriers unlock all phones. In response, they’ll just lock down the APNs like Apple does with the majority of their iPhones, making it nearly impossible (without hacking and warranty voiding) to get a data connection on another carrier. Docomo already cripples tethering in this exact way when their unlocked phones are used with any other provider, even with MVNOs using Docomo’s network.

Tokyo Police push ID verification for data-only SIMs

This sucks and is about as well thought out as a knee-jerk reaction from a politician who knows the internet is in fact not a truck but instead thinks it is a series of tubes.

It will mean the end of cheap data SIMs for visitors, and it's going to take away a large source of revenue during the Tokyo Olympics for scrappy MVNOs like JCI. Maybe the Police haven't considered the olympics and the number of visitors that would need mobile data access, or the have and that scares them.

As I have mentioned numerous times (and why I think an unlocked iPhone could have been a game changer), MVNOs usage is exploding in Japan. The idea that "Japanese people don't even know what a SIM card is" outdated and no longer really applicable. True, there are some that of course do not, but if the Metropolitan Police is making an issue of MVNO SIMs, that means a LOT of people are using them.

Anyway, here is the issue. From the Yomiuri:

通話は従来型の携帯電話、メールやネットはスマホ――携帯電話を使い分ける利用者の増加に伴い、データ通信専用のＳＩＭカードの需要は急増している。

ＳＩＭカードは２００８年、携帯電話不正利用防止法で販売時の本人確認が義務付けられたが、データ通信用カードは当時、「通話機能がないので、犯罪に悪用されるとは想定していなかった」（総務省）として規制対象から外れた。

しかし、スマホ向けの無料通話アプリの登場で、データ通信用カードでも、このアプリをダウンロードすれば通話ができるようになった。

警視庁幹部は「技術の進歩で、データ通信用カードも通常のＳＩＭカードとほぼ同じ機能を持つことになった。早急に本人確認の義務付けが必要だ」と指摘している。

As the number of people who use a traditional feature phone for voice calls and a smartphone for mail and internet increases, so does demand for data-only SIM cards.

In 2008, a law was enacted requiring identification verification for the sale of voice SIMs, but data-only SIMs are exempt because the Ministry of Infrastructure and Communications didn't imagine they could be used for nefarious purposes since they lacked voice capabilities.

However, downloading free smartphone apps allow voice communications with data-only SIM cards.

Therefore, Tokyo Metropolitan Police Chiefs have pointed out that "as technology has evolved, data-only SIM cards now effectively posses the same functions as voice SIMs. It is necessary to immediately begin identification verification for [data-only SIMs]."

On slashdot.jp is the following:

事件では、データ通信用SIMを使ってLINEやカカオトークといったコミュニケーションアプリを利用し、女子高校生を集め売春させたとのこと。

One incident involved the usage of LINE and KakaoTalk to recruit high school girls into prostitution.

As I understand it, when Line detects a "44010" SIM*, it requires you to login to your mydocomo page, which users of MVNOs don't have. This means line can't even be used with an MVNO (of course other services can, though).

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*440 is Japan's Mobile Country Code and 10 is Docomo's Mobile Network Code. So a docomo SIM is often simply referred to by phone geeks as a 44010 SIM. MVNOs using Docomo's network provide 44010 SIMs (which is why they will be locked out of the Docomo iPhone 5S and 5C).

A Docomo iPhone could FINALLY disrupt SIM locking in Japan

As far as I see it, the most interesting potential outcome of a Docomo iPhone is enhanced unlocking of phones between Japan's two large W-CDMA carriers, Softbank and Docomo. This will eventually encompass KDDI as Voice over LTE replaces 3G. (KDDI is currently immune to unlocking because they use an incompatible CDMA-2000 network for voice communications.)

Recap: The origins of SIM unlocking in Japan

SIM unlocking (as it's referred to in Japan) started several years ago, following Softbank Mobile's successful introduction of the iPhone 3G. NTT Docomo found itself on the defensive, for the first time ever, and you do have to sympathize just a little with the the arrogant bastards. Survey upon survey told them exactly what people wanted in a phone: mobile payments, water resistance, infrared, solar panels, one seg, pedometers, labyrinthine mazes of menu options, and an eyebrow plucker. The iPhone had none and this, Apple had no experience making phones, and Macs held a dismal share of the PC market in Japan.

And yet the iPhone quickly achieved unprecedented popularity in Japan, prompting Docomo to attempt to sidestep Apple by successfully pushing for the introduction of SIM unlocking guidelines.

(See our coverage of the debate, including an overview plus the opinions of Docomo and E-access, KDDI, and Softbank.)

"Guidelines" as set forth by the the Ministry of Infrastructure and Communications are just that - they are voluntary and not "requirements." However, in practice, telecommunications entities followed them. Up until now. Softbank simply refused to comply with the unlocking guidelines, even following contract completion (and even as they were buying back phones, unlocking them, and reselling them in emerging markets).

And so we fell into a stalemate.

KDDI and E-access (Emobile) are, for various reasons, not relevant to the SIM lock debate; it currently revolves around Docomo and Softbank. Softbank holds the coveted iPhone and no offering from Docomo has proved popular enough to make unlocking an issue to enough consumers. Here's why I think this will change if Docomo sells the iPhone.

Implications of an unlocked Docomo iPhone

Softbank phones are not compatible with the budget data and voice plans offered by MVNOs because Docomo provides the infrastructure. This means that only unlocked phones (or Docomo phones) are compatible. Several years ago, this would not have been an issue, but the MVNO space, led by Japan Communications Inc, has seen substantial growth.

(Comparison of all Japanese MVNOs.)

Many household names such as OCN, Panasonic, and Rakuten have entered the fray, lending legitimacy, in the eyes of the average (non-techy) consumer, to the notion of mobile phone service provided by an entity that is not an actual mobile phone carrier. This results in a higher intrinsic value for a device that works with Docomo versus one that does not (all other things being equal).

If NTT Docomo does indeed carry the iPhone, and if they continue with their tradition of unlocking all their devices, then this would create a large feature disparity between Japanese iPhone carriers. Any discrepancy in value is amplified by the fact that, once you wade through all the fuzzy math to arrive at the out-of-pocket cost of hardware and service, the total cost is almost always the same for similar devices across competing networks.

Recall that previous iPhone feature disparity, with respect to tethering and data caps, left Softbank on the brink of a customer revolt. This was narrowly averted by a yarimasho (aka executive order) from CEO Son. Softbank had no choice but to offer free tethering and ease data caps to match the value offered by KDDI. (Microsoft should have seen a similar reaction coming with the Xbox One versus the PS4.)

Unlocking phones is a slippery slope for carriers. I believe that NTT Docomo will, after making such a stink about unlocking and vowing to unlock all their phones, have no choice but to unlock any iPhone they may sell, just as they currently do for all Android device. If this creates a strong enough feature disparity, Softbank will be forced to follow, and they would lose any justification for keeping their Android devices locked.

win win.

Japanese Mobiles to get 070 prefix from November 2013

Japan uses preallocated prefixes for particular types of phone numbers. Currently, 090 and 080 numbers are reserved for mobile phones, 070 is for PHS, and 050 is for a particular type of IP Phone.

At first, mobiles used only 090 with additional prefixes allocated as needed, starting with 080 in around 2005 and now 070. Only a portion of 070 will be used for mobile; a chunk of numbers will remain PHS.

• Mobile: 070-1 to 4 and 070-7 to 9
• PHS: 070-5 and 6

However, the MIC is considering to allow portability of numbers between PHS and mobiles. It will then not be possible to tell the difference based on the number alone. Plans call for a specific initial ringtone to denote if the destination is PHS. This will be provided by Wilcom, the only PHS provider by November 2013.

MIC information page (J).