What is an unlocked phone?
An unlocked phone is a mobile phone which can be used on any GSM (Global System for Mobile Communications) network with an interchangeable SIM (Subscriber Identity Module) card. Regardless of the SIM card’s origin, the phone will recognize it and send voice and data over the network. In contrast, a locked phone is bound to a specific carrier’s network and is usually offered in conjunction with a contract. An unlocked phone does not require a contract.
What is a SIM card?
A SIM Card is a small removable plastic card which contains a Subscriber Identity Module chip. The SIM Card includes your personal information such as your phone number, address book, text messages and other information. The SIM card also includes a security key with authentication information which identifies the phone on the GSM network.
What is a GSM network?
There are two major mobile phone networks that function within the US: the GSM network and the CDMA network. The GSM (Global System for Mobile Communications) network is a mobile phone network used by major mobile phone carriers throughout the world. The CDMA (Code Division Multiple Access) network is used within the US and a few additional countries. A phone which functions on the GSM network requires a SIM card.
What are the advantages of an unlocked phone?
Buying an unlocked phone exempts you from signing a contract and locking in service from a single carrier. You can take any SIM card from any carrier and put it in your phone. So if you sign up for service with AT&T and decide to switch to T-Mobile, you can still use the phone that you bought from AT&T. With an unlocked phone, you don’t need to wait for your contract to expire to upgrade or change your phone. You won’t be charged a termination fee for ending your contract with the carrier because there is no contract. You can purchase prepaid plans so there are no monthly fees.
Certain carriers offer a limited selection of mobile phones. One advantage of an unlocked phone is that you can choose from any of the mobile phones that run on the GSM network and contain an SIM card slot.
If you travel overseas, an unlocked phone is advantageous because you can simply purchase a new SIM card from a carrier where you are traveling to avoid the astronomical carrier roaming charges associated with using a mobile phone outside the US.
What are the disadvantages of an unlocked phone?
When purchasing a new “locked” phone, the carrier often subsidizes the cost of the mobile phone. An unlocked phone does not benefit from the subsidy offered when bundling the phone with a carrier contracted plan. An unlocked phone is limited to GSM network coverage. An unlocked cell phone will not work on a CDMA network.