Wireless carriers in the United States subsidize the cost of a new phones to consumers by binding them to a contract. With an usual 2-year contract, consumers are able to purchase a smartphone for about $200 instead of retail price of about $600.
What is “locked” or “unlocked” phone?
The phones you buy with a contract from major carriers such as Verizon, AT&T, Sprint, T-Mobile and US Cellular are locked. The locked phones are programmed to be used only by the offering carrier. You cannot use locked AT&T phone in T-Mobile network, and vice versa. The reason for major cellular carriers to offer locked phones is to offset lower cost of phones offered with a 2-year contract, and to be able to surcharge for services they offer (like wireless hotspot). The term, “locked” means that a phone is locked to only work with a specific wireless carrier. This is not to be confused with “jailbreak“, which is gaining administrator role of the smartphone. A locked phones are usually ship with bloatware (stock applications) that you cannot remove, and certain functionality (such as wireless hotspot or tethering) blocked. Jailbreaking a phone will allow a user to remove bloatware, and also lift software restrictions imposed by a carrier.
An unlocked phone is a phone that is not tied to a particular carrier, and they can be used with any cellular carrier as long as the technology (GSM) and cellular frequencies are supported. In a GSM network, an unlocked phone can be used with any provider (including international carriers) by just replacing a SIM (Subscriber Identity Module) card. If you travel outside of the country, having an unlocked phone will allow you to temporarily swap a SIM card to utilize local carrier services.
CDMA vs. GSM
There are two wireless standards widely used, CDMA (Code Division Multiple Access) and GSM (Global Systems for Mobile Communications). Verizon, Sprint and US Cellular use CDMA technology whereas AT&T and T-Mobile use GSM technology in the United States. Outside of the USA, GSM is the predominant technology used to provide cellular operators.
In the GSM network, phones use a SIM card to store your phone number and identity information. To swap a phone, you’ll just need to swap out a SIM card from one “unlocked” phone to another, and you have a service without having to contact your cellular provider. If you travel outside of the country, buying an inexpensive SIM card with a prepaid credit will get you an instantaneous local cellular service to your phone. This is very convenient and portable; and great advantage of using an unlocked phone.
In contrast, CDMA phones do not use a SIM card and the phones have been pre-programmed to only work with a specific carrier; they cannot be unlocked unless phone supports dual technology (GSM and CDMA). Some phones such as Google Nexus 5 support both CDMA and GSM standards, so you may switch between the CDMA and GSM providers.
How do you know if your phone is unlocked?
We already discussed CDMA phones cannot be unlocked. If you’re using AT&T or T-Mobile, you are using GSM network and you may unlock your phone if it isn’t unlocked already. If you purchased your phone with a service contract, your phone is most likely locked. In the USA, very few phones are sold unlocked. To determine if your phone is locked, you may borrow a SIM card from your friend who has an unlocked phone and pop it into your phone. If you can call your friend, you have an unlocked phone. If your friend’s SIM card is not recognized by your phone or displays an error message, you have a locked phone.
Unlocked Phone Advantages
Despite of having two wireless standards (CDMA and GSM), here are a few of the benefits of using unlocked phone.
1. Carrier Independent – You are not locked into a single carrier or a contract. You may choose any network provider, domestic or international as long as technology supports it. If you don’t like the service received from a current provider, you may switch at any time.
2. Money Saver – Although you may have to pay full price for an unlocked phone, cost saving will be significant over time if one of many prepaid phone plans is utilized. Prepaid and No-Contract plans are prevailing after T-Mobile and AT&T introduced low-cost no-contract family plans without offering a “phone upgrade” feature. When you are ready to sell your old “unlocked” phone, it will be easier to sell and also likely to get more money for it.
3. Wider Phone Selections – If you’re looking to sign-up with a prepaid plan, an MVNO (Mobile Virtual Network Operator) will only offer you a limited set of phone selections. With an unlocked phone, you will be able to use the network which is not “officially” supported by an MVNO.
4. No Restrictions – A locked phone is tied to a carrier, and have many stock application that you cannot delete but constantly asking you to subscribe to a “paid” service. Also, a locked phone has certain functionality blocked from being “freely” utilized. Unlocked phone has no restrictions or blocked functionality.
Unlocked Phone Disadvantages
1. Non functional feature – Since carriers program smartphones to work specific way, it is possible that some features (although very rare) may not work properly. The core phone features such as calling, texting and using Internet will work; but full phone functionality may not be realized.
2. Voiding Warranty – If you buy an unlocked phone, you have no issues with the manufacturer’s warranty. However, if you or someone unlocked a locked phone, you are potentially voiding warranty provided by the manufacturer or a carrier.
Unlocked phones offer greater flexibility in choosing domestic and international network providers. They also offer no limitations in functionality, saves you money and snap to switch a provider if you travel or are unhappy with your current provider. With so many low-cost and quality prepaid (and no-contract) plans to available today, using an unlocked phone is the way to save you money without sacrificing quality. If your locked phone is out of contract (fulfilled 2-year contract), you may contact your carrier and asked to unlock your phone with a good reason and they’ll unlock it for you. Or, you may choose to unlock your smartphone yourself.