Potential Advantages
One advantage to buying an unlocked cell phone is the ability to buy almost any GSM (Global System for Mobile Communications) phone, rather than being restricted to a limited selection offered by a specific carrier. This can include phones only distributed in certain countries, or with features that are not available on all carriers. People also don't need to wait for a contract to expire to buy a new phone; they can remove the SIM (Subscriber Identification Module) card from an existing phone and insert it into a new one when they are ready for a replacement. This allows them to keep their number while upgrading the phone, without having to go through the carrier.
Additionally, the ability to use an unlocked cell phone with a variety of SIM cards can be convenient for travelers. Most carriers only supply service to a particular country or area; when traveling outside the coverage zone, the mobile phone user will have to "roam" on another carrier's network, which often comes with a high fee. To avoid roaming fees, a person can buy a SIM card from a local carrier at his destination and insert it, preserving all his existing phone settings but getting a new number and a local calling plan. In addition to less expensive calling rates, this provides the added benefit of having a local number while in the area.
Potential Disadvantages
Not all unlocked phones have all the same features as their locked counterparts even when the provider is the same. Carriers may include such features only on locked phones, which use their proprietary software and settings. Some carriers offer free calling to a number of contacts or one-button access to certain features that can only be used on locked phones. Consumers concerned about specific features may want to check with a carrier to see if they are available on unlocked cell phones.
In addition, such phones tend to be more expensive. Locked phones are often costly because they usually come with phone service contracts that commit the consumer to that service provider for a certain period of time (like two years). Unlocked phones typically sell at or close to retail price because the buyer can use the phone with a number of different carriers.
Another issue with unlocked cell phones is that they may not work on all GSM bands; as of 2012, a quadband phone could operate anywhere in the world with a GSM network, but other phones could not. This may be a concern for international travelers especially, since not all bands are used in all countries. For example, in South America, the 850 MHz band is in common use, but others may not be available. It is advisable to check on which bands the phone uses, and which bands are available in given travel destinations.
Getting an Unlocked Phone
One way to get a phone without proprietary settings is to buy it new from a third party vendor in its original, unlocked state. Third party services are also available to unlock a person's cell phone for a fee, usually by attaching it to a special piece of hardware specially designed for this purpose. This doesn't guarantee the phone will always work correctly, as carrier settings might remain in the software.
There are also instructions online to unlock most models. In many cases, unlocking a phone is just a matter of activating the phone and entering a specific code; some phones, however, require a series of steps before the code can be entered. Not all codes work, and trying to enter codes that are incorrect can cause the phone to "hardlock" and prevent it from being unlocked. Certain models of cell phones can only be unlocked using the hardware method, which may also worked for hardlocked phones.
Some cell carriers sell unlocked phones at full price, usually allowing consumers to pick a flexible plan such as month-to-month or pay-as-you-go billing. This can provide access to carrier-specific features with the flexibility of an unlocked phone. If a customer has been with a carrier for some time — sometimes for as little as 90 days — the carrier may even be willing to supply an unlock code for a locked phone, although they may charge a fee.
Cell Phone Carriers
The majority of the world — 99% — uses the GSM network, and numerous carriers use it for their services. The competing network is CDMA, or code division multiple access. Most carriers on the CDMA network do not, as of 2012, use card-enabled phones; instead, subscriber information is stored in the cell phone's memory, which means it cannot be transferred to another phone. The CDMA equivalent of the SIM card — the R-UIM — is likely to be used by these carriers in the future, and is already in use in some parts of Asia. This card contains software that allows it to be used in GSM phones as well.
Jailbroken Phones
A jailbroken phone is not exactly the same as an unlocked phone. Most often used in reference to Apple's iPhone®, when a phone is jailbroken, it has been modified to allow it to download applications (apps) not approved or sold by the carrier, such as the Apple App Store. A phone that has been jailbroken is not unlocked, although it may be necessary to jailbreak a phone before unlocking it is possible. Jailbreaking a phone is considered legal in the US, although it may violate the warranty.
