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New Law Brings Big Changes to Mobile Phone Market

Big changes are in store for the Finnish mobile phone market. Loosening restrictions on mobile service providers means that many different kinds of service packages will be available beginning in April.

For years, Finnish law required that handsets and service subscriptions be sold separately. Recent changes in the law, however, now allow for tie-in sales after the first of April.

Under the new law, if a consumer signs up for a phone contract with a certain operator, a phone can be thrown in for free or at a considerably reduced price. The deal is alluring for many consumers, especially as the going rate for 3G phones is over 500 euros.

The Ministry of Transport and Communications says it hopes that the move will encourage more Finns to upgrade to newer and better phones.

However, Riitta Kokko-Herrala, a legal advisor from the Finnish Consumer Agency and Ombudsman, says the old system worked well for consumers. "Consumers need a lot of information so they can make rational choices. The problem is there is so much information that its difficult for consumers to compare offers. We are worried that transparency of the market is weaker than it was before."

She also says the agency is concerned about the upcoming fixed-term contracts which makes it possible for operators to lock consumers into contracts for as long as two years.

As for getting a free phone with the deal, Kokko-Herrala says, "the consumer of course pays for the phone through phone calls and messages." In addition to the new packages, it seems that fierce competition that has kept prices low may be fading. Sonera, for example, has already announced across-the-board increases in hopes of reversing a long trend of decline.


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