Joys of Unlocked Cell Phones ?

Edwards Finance > Phones

Q. Buying new, unlocked phones or unlocking your existing phone is perfectly legal in the U.S., although it's not as common as it is in other parts of the world, most notably Western Europe. There, countries such as Belgium don't even allow the sale of locked phones.

A. However, although buying an unlocked phone or unlocking an already purchased phone can lower costs and provide other benefits, it is not always a no-brainer and does not provide advantages for everybody. Overcoming Hurdles The most obvious impediment to using unlocked phones is that the option is only available to those who subscribe to cellular networks based on GSM (Global System for Mobile Communications) technology. In the U.S., that means AT&T Inc. and T-Mobile USA Inc. Phones that connect to such networks carry subscriber and network information on Subscriber Identity Modules, which can be easily inserted into the phone. If you own an unlocked phone and switch carriers, you simply take out the old SIM and put in a new one. In contrast, networks based on CDMA (Code Division Multiple Access) technology -- Verizon Wireless and Sprint Nextel are the largest in the U.S. -- keep that information in memory, which, practically speaking, locks the phones into a specific network. If you switch carriers, you must buy a new phone. There are many advantages to unlocked phones, only one of which is simplicity. "I buy phones and don't wait for my contract to be up," said Abramson, who writes the blog VoIPWatch. That means he can get a new phone whenever he wants to, without being locked into a new one- or two-year contract. For instance, Sony Ericsson Mobile Communications AB's Walkman music phones are big sellers in Europe because of their strong media abilities, but few are sold by U.S. carriers. Similarly, HTC Corp.'s new Touch and LG Electronics' Prada are often compared to Apple Inc.'s iPhone, but neither is sold -- yet -- in the U.S. Another reason to use unlocked phones is to save money when traveling internationally. U.S. cellular operators typically charge high roaming fees when their subscribers travel overseas. But with an unlocked phone, you can buy a SIM card at your destination and pay local rates, which typically are far less expensive.

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