[greedyboy]

You have it the wrong way round.

Unsubsidised phones causes the problem. Simply walking into a a shop, taking a phone home unconnected is the root of the problem not the unlocking.

Now with a subsidised phone the dealer would never let the phone leave a store without the phone being activated an linked to a contract. Believe me I know this market very well!

I will give you a very basic example how it works, in reality it is a very complex system.

1) Dealer buys a phone for £300

2) Dealer sells the phone for £100 and connects it in store

3) The network pay the dealer commission (for example £250)

4) The store/dealer makes £50.

5) Apple is paid a % of the revenue generated by the iPhone know in the trade as 'ongoing' (ongoing revenue).

Now if you remove option 2 from the equation, the dealer is risking £300 worth of kit leaving the store unconnected. If it is not connected then he will not get his commission. Hence you can not walk into any mobile store and walk out with a UNCONNECTED contract mobile phone!

This is how the mobile industry has worked for 20 years. Apple's caused the problem and committed COMMERCIAL SUCIDE by not following this simple method of selling a phone. Around 1/3 of all iphones sold ended up on the grey market. Doesn't take a rocket scientist to put your house in order.

UNLOCKING is not the problem.

On separate issue, if o2 make the new iphone subsidies available on PAYG that's where the problems will come from. 'Box breakers' will try and muscle in buying up 100's and 'breaking them' separating the sim, unlocking the phone and selling it as 'sim free'.

No doubt O2 will try and curb this by limiting one PAYG phone per customer.