Upstart mobile operator 2degrees has made a complaint to the Commerce Commission following news that Telecom would be "sim-locking" the handsets of customers using its new Skinny brand.
2degrees asked the commission to confirm that New Zealand mobile operators would not be sim-locking phones, calling the practice a "cynical" move that restricted choice.
Its chief executive Eric Hertz said customers should have the right to move between providers.
“This is not about better handsets – improved competition is already driving down the cost of feature-rich smart phones,” said Hertz.
“This is a cynical move to lock in the most cost-sensitive consumers so they can’t make a choice.”
Skinny Mobile, Telecom's new sub-brand targeting the youth market, is due to launch soon.
Telecom Skinny users would need to pay a $30 fee in order to unlock their phones and leave for a rival carrier during an initial nine-month period. Customers on its XT network are exempt, however.
Sim-locking stops users from changing networks by changing the sim card in their phone.
“We thought that this kind of monopolist behavior was a thing of the past, but there’s clearly still a need for consumer protection from dominant players,” Hertz said.