How Do Unlocked Cell Phones Work?
Cell phones are some of the most popular mobile devices used around the world. When signing up for one, however, you must go through a company that provides the service for you, such as T-Mobile, Verizon or AT&T. These companies compete with each other to offer the best phones at the best prices and usually "lock" their phones to prevent you from using them with a different carrier. Most customers never realize their phone is locked to their provider and are not aware of the benefits of unlocking.
Why Are Cell Phones Locked?
Cellular carriers have a very good reason for locking their phones. If you bought an unlocked phone and a service contract with AT&T, for example, you could use the phone until the contract expired, then switch to T-Mobile and buy a new contract without purchasing another phone. In this case, T-Mobile wouldn't be making profit by selling you a new phone and AT&T couldn't keep you as a customer by offering discounts on new phones. Just like any company, profit is the biggest incentive to lock phones.
Reasons to Unlock
There are multiple benefits for unlocking a cell phone. Carriers are constantly competing with each other and may offer competitive prices or services that are more desirable to the customer. Once a phone is unlocked, the software that detects which carrier you are using is bypassed or disabled, and it can now be used on any network that is compatible with the phone's network frequencies (providing you have service with that particular network).
How to Unlock
Unlocking a cell phone is a relatively easy process, but it takes some know-how and research. Sometimes cellular providers will provide you with a code to enter (for example, if you are traveling abroad and will be roaming on a different network), but usually phones are unlocked through specialized computer software that generate these codes for you. In some cases, a cable must be attached to the phone's data port.
The SIM factor
Phones that are used with GSM carriers (such as AT&T and T-Mobile) have removable SIM cards that are used to identify a particular user's information on the network. Unlocked GSM-compatible cell phones have greater flexibility because they allow users to swap their SIM card into different phones. As a result, they can use multiple phones with one SIM card. For example, an unlocked iPhone allows the user to remove the AT&T SIM card and insert a T-Mobile SIM card, even though T-Mobile does not sell the iPhone.