What is an unlocked cell phone?

Some cell phones are designed to use a Subscriber Identification Module (SIM) card, or microchip that stores subscriber data. The SIM card is issued by a carrier and provides cell service by activating any phone into which it is inserted. A locked phone, however, will only recognize a SIM card from a particular carrier. If the cell phone is unlocked, it will recognize a SIM card from any carrier. The "lock" is a software setting that keeps the cell phone "loyal" to one carrier.

In areas like the United States where carriers offer free or deeply discounted phones with cell plans, the phones are commonly locked so that they will not work with other carriers. Carriers claim this is necessary to subsidize the cost of the phones. After a period of time, a carrier might agree to unlock the phone upon request, perhaps charging a fee. However, due to proprietary settings sometimes installed in locked handsets, the phones don't always function correctly with other carriers, even once unlocked.

Unlocked cell phones are in such demand that third party services will unlock your cell phone for a fee. This doesn't guarantee the phone will always work correctly, as proprietary settings might remain. There are also hacking instructions online to unlock many models of phones, but a phone that is unlocked improperly can be rendered inoperable.

Carriers operating on the GSM network use SIM cards. In the United Sates, this includes AT&T Wireless and T-Mobile. Carriers that use the competing CDMA network do not yet use card-enabled phones. These carriers include Sprint, Verizon Wireless and Virgin Mobile. The CDMA equivalent of the SIM card the R-UIM will be used by these carriers in the future. R-UIM cards are already in use in some parts of Asia.

Benefits of Unlocked Cell Phones

There are many benefits to purchasing an unlocked cell phone. If you are within contract with your current GSM carrier, it is difficult to upgrade your phone once the latest and greatest cell phones are released. So if you are interested in the newest offerings from Nokia or Motorola, you can get your new phone without breaking your contract.