I think he means that most cell phone providers have disabled or crippled interfaces that you can use to install ring tones without having to download them over the cell network.

It may not exactly be fraudulent, but it certainly isn't very ethical business practice.

That being said, I do think it's borderline fraud to bind the phone to the service provider as is common in the North America. Could you imagine if this was done for landlines? I suppose if they continue to subsidise the phone they can get away with it, but again, not ethical practice IMO.