What is an Unlocked Phone?

This is an article from wisegeek.com.

An unlocked phone is essentially a phone that can be used with any SIM card from any network. Most cell phone companies install special “locking” software on their phones that prevents the phones from being used with any other network’s SIM card. However, there are ways to unlock a cell phone so that it can be used with any network.

One of the ways that cell phone companies attract new customers is to offer free or inexpensive phones when the customer signs a contract. In addition to charging a high termination fee if the customer cancels their phone line before the contract is up, cell phone companies protect themselves by locking all of the phones they sell to their network. This keeps them from losing money on customers who would buy a phone for a good deal from their company, then activate it with another network for a better rate.

Cell phone companies are able to do this because every modern cell phone has a tiny card in it called a SIM card. The SIM card is what identifies a cell phone as a certain phone number. In other words, a cell phone user can move their SIM card from one phone to another and still keep the same number. In addition, the SIM card is coded with the network’s identification information.

A locked phone essentially has software that prevents it from working with a SIM card that has any other carrier’s information coded into it. Unlocking a cell phone therefore enables the phone’s owner to leave one cell phone company for another. With an unlocked phone, a person can use whichever cell phone company is offering the best rate or the highest quality services.

Another advantage is that an unlocked phone is worth more money. Many sellers on eBay and elsewhere sell cellular phones. Since an unlocked phone appeals to a wider audience, instead of only those with a certain carrier, it is often worth the minimal expense to unlock the phone.

Unlocking a phone can be done online for very little money, usually under twenty U.S. dollars. Some phones require a special code to unlock them, which can be purchased online. Other phones can be unlocked by downloading software online and hooking the phone up to the computer. Unlocking a phone is generally not difficult, and since an unlocked phone gives users more options, the time and money it takes is usually considered worthwhile.

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