What is an unlocked cell phone, and how does it work?
If you are in the market for a new cell phone, you will almost certainly see listings for "unlocked phones" alongside standard carrier offerings. While unlocked phones have been around for many years, the model has gained popularity recently. Here's
everything you need to know about unlocked phones, and why you might want to consider buying one.
is an unlocked cell phone?
An unlocked cell phone is a device that can be used on any carrier that supports that phone. A locked cell phone, in contrast, is fixed to a single carrier.
How does it work?
The "lock" is simply software on the cell phone that prevents the device from recognizing a SIM (Subscriber Identity Module) card from a new carrier. Micro-SIM and nano-SIM cards are the most commonly used cards today, but some devices still use the original, standard SIM cards. (For more on SIM cards,
SIM card 101 article.)
Benefits of an unlocked cell phone
Cost. One of the primary benefits of an unlocked cell phone is that it can save you money in the long term. This can be hard to see at first, as the up-front costs are often significantly higher for an unlocked phone than for a comparable locked device.
For example, carriers often subsidize locked cell phones. In other words, that phone you got for "free" actually retails for several hundreds of dollars. Why does the carrier do it? Because you are also locked into a carrier contract — typically for two years. With an unlocked cell phone, in contrast,
you pay for the phone up front, but you are able to choose your plan and your carrier, and you can make changes to either at any point without penalties.
So, where do the savings come in when it comes to unlocked phones? Pre-paid plans through services like
StraightTalk can save you hundreds of dollars in a matter of months over carrier plans, offsetting the upfront price of even a high-end unlocked smartphone in less than a year. If you decide to resell your phone when you are ready to upgrade, you will also find that your unlocked phone is worth a bit more than an equivalent locked
International travel. If you travel internationally, you will be glad to have an unlocked phone. Just buy a SIM card at your location when you arrive and you will be able to use your phone as normal. It's important to note, however, that CDMA phones won't work overseas;
this includes phones on the Sprint network and some phones on the Verizon network. GSM phones, found on AT&T and T-Mobile, will work in most countries.
Tremendous selection. There was a time when there were very few choices if you decided to go with an unlocked device. However, as people have become more aware of the advantages and more eager to buy them, more and more manufacturers are offering their phones in an unlocked
version. Today you can easily find unlocked phones from high-end manufacturers such as
HTC. With that said, the most significant growth in the unlocked-device market has been among less expensive options from companies like
Huawei. Motorola has had two hit Android smartphones in this market during the last year: the Moto E and Moto G.
Replacement phones. Should your mobile device get lost, stolen or broken, an unlocked model can be an inexpensive way to replace your device without having to sign a new contract. Again, take a look at the offerings from the companies mentioned earlier, and you will find a
number of compelling phones at reasonable prices.
Unlock your existing cell phone?
If you already have a smartphone you might be able to get your carrier to unlock it. (Remember: all that stands between you and an unlocked phone is a software setting.) And, as of February, all carriers are required to offer the unlocked option to customers under certain conditions.
If you are under contract with a carrier, you will need to wait until the contract is up to get an unlocked version. You can read each of the four major carriers' policies on their respective websites (
T-Mobile). Verizon does not lock any of its 4G LTE devices, so any modern smartphone on Verizon is unlocked already. With prepaid (month-to-month) plans, the carrier must offer the option to unlock the device within one year of activation.
While the initial cost of entry may be tough to get over, particularly if you are looking at high-end smartphones that can cost $600 to $700, an unlocked phone will absolutely save you money over time. The model also offers the kind of freedom and flexibility that you can't get with a locked phone, which may be
worth more than just dollars and cents now and in the future.
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