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The term box breaker pertains to the mobile phone industry; where there are companies or individuals that exploit the networks' use of discounts on handsets to create their own profitable business.
Mobile phone networks fundamentally have three different ways to connect customers to the network, each of which needs a SIM-card that locks the user to the network, and provides for a mobile phone number to be associated with a handset: contract, prepaid, or SIM-only. Contract customers are committed to a minimum monthly payment for perhaps 18 months, and generally get their choice of any telephone handset. Prepaid customers have a more limited choice of handsets, also tied to the operator, but they can stop being a customer whenever they like. SIM-only customers simply buy a SIM card and put it into a handset that they already own, and again can leave whenever they like.
There has been a huge growth in the prepaid business in the last few years, and the prepaid handset business has become particularly competitive, with the handsets sold through every kind of outlet, including supermarkets and online. The increase in competition has driven prices of handsets down. For example, one could buy a GSM handset over the counter for $20 in the United States.
Mobile phone operators sell their own branded version of prepaid handsets, bundled with a SIM-card. The handsets are priced at a discount to make them more attractive. The assumption is that a customer will buy the handset, and then activate with the SIM-card in the pack, which will eventually lead to the operator making money via top-ups on the phone. Box breakers subvert this by buying the phones, and unlocking the phone (SIM lock) so that it can be used with any SIM-card, i.e. on any network. Unlocked phones command higher resale prices, so can then be sold on at a profit, and can even be used by contract customers. Additionally, online marketplaces (like eBay) enable box breakers to operate internationally and exploit fluctuations in currencies and price differences between countries. [1]
Historically, box breakers have been procuring a large number of handsets directly from handset retailers stores that eventually suffer revenue losses from box-breaker practices. While chains like O2 and Carphone Warehouse have clamped-down on sales to box-breakers, there are many other outlets, including catalogue stores and supermarkets that have not addressed this phenomenon. [2]
Mobile phone handsets that are in high demand - especially models that are region-exclusive - are prime targets of box breakers. Handsets can be bought as prepaid, unlocked, and then shipped to the target market for a profit. This grey-market activity is a problem both for handset vendors and for network operators.
A loyalty program is a marketing strategy designed to encourage customers to continue to shop at or use the services of a business associated with the program. Today, such programs cover most types of commerce, each having varying features and rewards schemes, including in banking, entertainment, hospitality, retailing and travel.
A subscriber identity module or subscriber identification module (SIM), widely known as a SIM card, is an integrated circuit that is intended to securely store the international mobile subscriber identity (IMSI) number and its related key, which are used to identify and authenticate subscribers on mobile telephony devices. It is also possible to store contact information on many SIM cards. SIM cards are always used on GSM phones; for CDMA phones, they are needed only for LTE-capable handsets. SIM cards can also be used in satellite phones, smart watches, computers, or cameras.
A SIM lock, simlock, network lock, carrier lock or (master) subsidy lock is a technical restriction built into GSM and CDMA mobile phones by mobile phone manufacturers for use by service providers to restrict the use of these phones to specific countries and/or networks. This is in contrast to a phone that does not impose any SIM restrictions.
Virgin Mobile is a wireless communications brand used by seven independent brand-licensees worldwide. Virgin Mobile branded wireless communications services are available in Colombia, the United Kingdom, Ireland, Canada, Chile, Russia, Saudi Arabia, United Arab Emirates, Poland, South Africa, and Mexico. Virgin Mobile branded services used to be offered in Australia, France, Singapore, India, Qatar and the United States.
Unstructured Supplementary Service Data (USSD), sometimes referred to as "Quick Codes" or "Feature codes", is a communications protocol used by GSM cellular telephones to communicate with the mobile network operator's computers. USSD can be used for WAP browsing, prepaid callback service, mobile-money services, location-based content services, menu-based information services, and as part of configuring the phone on the network.
A prepaid mobile device is a mobile device such as a phone for which credit is purchased in advance of service use. The purchased credit is used to pay for telecommunications services at the point the service is accessed or consumed. If there is no credit, then access is denied by the cellular network/Intelligent Network. Users can top up their credit at any time using a variety of payment mechanisms.
TracFone Wireless, Inc. (TFWI) is an American prepaid, no-contract mobile phone provider. TFWI is a subsidiary of Mexico's largest telecommunications company, América Móvil, and offers products and services under several brands. It operates as a mobile virtual network operator (MVNO), holding agreements with the United States' largest wireless network operators to provide service, including Verizon Wireless, AT&T Mobility, T-Mobile US, Sprint Corporation, and U.S. Cellular. TracFone Wireless had 25.668 million subscribers in 2015.
Prepaid refers to services paid for in advance. Examples include postage stamps, attorneys, tolls, public transit cards like the Greater London Oyster card, pay as you go cell phones, and stored-value cards such as gift cards and preloaded credit cards.
A voucher is a bond of the redeemable transaction type which is worth a certain monetary value and which may be spent only for specific reasons or on specific goods. Examples include housing, travel, and food vouchers. The term voucher is also a synonym for receipt and is often used to refer to receipts used as evidence of, for example, the declaration that a service has been performed or that an expenditure has been made. Voucher is a tourist guide for using services with a guarantee of payment by the agency.
Virgin Mobile Canada Ltd. is a provider of postpaid and prepaid wireless voice, text and data communications services throughout Canada. They also offer Home Internet services in select areas of Ontario and Quebec. Launched on March 1, 2005 as a joint venture between Virgin Group and BCE Inc., BCE took sole ownership on July 1, 2009 when it closed a deal to purchase the stake it did not already own. Virgin Mobile calls its customers 'Members' and offers a Member Benefits program, which provides its customers with special offers, discounts, and VIP experiences.
The term, Subsidy Password, is used by Motorola and other handset manufacturers to refer to the 8-digit code unlock code necessary to remove the operator lock from cell phones. This code is randomly assigned to individual cell phones by the OEM on request of the mobile service operator and prevents the use of a particular phone on a cellular network other than that to which the phone was originally sold.
Solo Mobile is a discontinued mobile virtual network operator in Canada started by Bell Mobility in 2000. Historically, Solo was considered a discount wireless brand, offering low price monthly plans with some unlimited options in certain cities. Its products and services were only sold in British Columbia, Alberta, Ontario and Quebec. The brand ceased advertising towards new customers since November 2011, and new activations were officially discontinued on May 17, 2012.
Asda Mobile is a mobile virtual network operator (MVNO) in the United Kingdom, operated by Asda, using the network EE. Asda Mobile previously used the network of Vodafone until December 2013. Asda Mobile is available in over 360 stores across the United Kingdom, and online through purchasing either a SIM Card or through an Asda Mobile handset.
2degrees is a telecommunications provider that operates in New Zealand. Its mobile network launched on 4 August 2009 after nine years of planning. 2degrees offers prepaid and pay-monthly mobile services as well as fixed-line phone and broadband services.
Data and Audio-Visual Enterprises Wireless, d/b/a Mobilicity, was a Canadian mobile virtual network operator owned by Rogers Communications. Its name was a portmanteau of the words "mobility" and "simplicity". Mobilicity was one of several new mobile network operators, along with Public Mobile and Wind Mobile, which launched in Canada after a government initiative to encourage competition in the wireless sector. The carrier had over 250,000 Mobilicity subscriptions on May 16, 2013, the day in which Telus announced its failed attempt to acquire Mobilicity. The subscription count decreased to 157,000 by April 2015 according to court documents filed by Mobilicity's Chief Restructuring Officer in that month.
The history of the prepaid mobile phone began in the 1990s when mobile phone operators sought to expand their market reach. Up until this point, mobile phone services were exclusively offered on a postpaid basis (contract-based), which excluded individuals with poor credit ratings and minors under the age of 18.
Chatr Mobile is a Canadian mobile virtual network operator owned by Rogers Communications Canada targeting entry-level customers. It is one of three wireless brands owned by Rogers Communications, including Rogers Wireless, and Fido Solutions. The provider launched its service in Toronto, Ottawa, Calgary, Edmonton, Vancouver, Quebec City, and Montreal under the name Chatr Wireless on July 28, 2010. The company re-branded to its current name in 2015.
Mobile by Sainsbury's was a mobile virtual network operator (MVNO) in the UK, operated by Sainsbury's between July 2013 and January 2016, using the Vodafone UK network.
Ultra Mobile is an American Mobile Virtual Network Operator (MVNO), founded in 2011, which sells low-cost prepaid mobile phone services with unlimited international calling and text plans, operating on T-Mobile's cellular network in the United States.
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