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Sick of your cell phone carrier? Unlock your way to cheap talk

Posted By Alissa Fleck On 12/02/2013 @ 8:30 am In Personal Finance | 7 Comments

When it comes to cellphone use, one size (or, you know, several) does not fit all.

There are a number of reasons you may want to unlock your smartphone. Unlocking your smartphone allows you to continue using the same phone without having to purchase a new one once your contract runs out, and without having to bind yourself to a new contract. For those who spend time traveling abroad, unlocking can also protect you against exorbitant international roaming fees by allowing you to switch to an in-country carrier.

Finally, if you’re the type that’s very particular about what kind of phone they use, unlocking phones allows you to choose from a wider variety of phones to find which one suits you best, rather than being locked into using the phones offered by your carrier.

By far the biggest reason to unlock your phone is to save money. If you’re a “light” cellphone user or just want the freedom to chase the best deal, you can hook your phone up to contract-free plans, which may offer substantial savings over a so-called “full service” carrier. Discount carriers such as Walmart and Tracfone’s Straight Talk or Metro PCS may not offer the level of service of a full service carrier, but their “bring your own phone” plans can provide unlimited talk, text and data for a much lower price.

Now onto issues of legality. Whether or not cell phone users should be tethered to a carrier has been a contentious and ongoing issue [3]. As of 2012, you cannot unlock a newly purchased phone [4] without the permission of the carrier, including phones purchased any time after January 2013. The FCC is currently negotiating a voluntary agreement with cell-phone providers that would give consumers a streamlined process for getting that permission.

“We are working towards a voluntary industry agreement that will provide a timely and consumer friendly solution to this important issue,” says an official with the FCC. “Pro-consumer unlocking policies will provide Americans with more choices in the mobile wireless marketplace. Americans will have the opportunity to unlock their mobile wireless devices, which often are substantial investments, and may be able to move their devices from one wireless provider to another if it makes sense for them.”

How to unlock your phone

If you want to unlock a phone today, where do you start? First off, there’s no point in unlocking your phone if you can’t take it to another carrier. In order to be easily portable between wireless carriers, a phone has to run on a GSM network and accept GSM cards — those small plastic cards that slip into the side of a phone and hold your subscriber and network data. As long as your phone is GSM, switching carriers on an unlocked phone is as easy as taking out your old carrier’s GSM card and replacing it with your new carrier’s card.

Unfortunately, most phones sold by Verizon and Sprint work on what’s called a CDMA network, which basically makes them impossible to transfer to a new carrier. Here are where the different carriers stand on selling unlockable phones, and what hoops you have to jump through to get a phone unlocked.

  • Verizon sells a variety of phones that are “Global Ready,” meaning they come automatically unlocked so that international travelers can swap carriers quickly to avoid pricey international roaming charges. Models include the iPhone 5s and the Samsung Galaxy line.
  • Sprint sells phones it calls “International” or “Worldmode” which are GSM capable, but they don’t come unlocked out of the box, and the carrier says they won’t unlock them for domestic use, preventing owners from moving to another domestic carrier.
  • T-Mobile will also sell you an unlocked phone, but only if you pay the full price of the phone upfront. Otherwise, you’ll have to call customer service and request an unlock, since they don’t have a streamlined way to do it on the Web.
  • AT&T says it will unlock your phone once your contract with them is up, and has a streamlined process to get the ball rolling online.

If you do decide to go through with unlocking, be sure to allot some time to getting it done. It can take days or even weeks for some carriers to process a request and send you an unlock code.

It also helps to work on getting your phone unlocked before you leave a carrier. Anecdotally, carriers seem to work harder to process the requests of current customers than former customers.

Going unlocked from the get-go

Some phone manufacturers also sell unlocked carrier-less versions of their devices. For instance, Apple sells unlocked iPhones and Google Android Nexus devices also come initially unlocked.

If you buy a new, unlocked phone from a carrier, the upfront cost will be much greater than a contracted phone, but you are likely to save more money in the long run thanks to lower monthly payments.

Pay-as-you-go carrier vs. standard carrier

| Infographics [5]

As you can see, a quick comparison of total monthly payment for an unlimited plan over two years between an AT&T Apple iPhone 5s (with contract) and the pay-as-you-go carrier MetroPCS Apple iPhone 5s, reveals the discount carrier is initially more expensive, but over time saves you money compared to AT&T’s contract prices. The initial costs of the Apple iPhones are $299 and $749 respectively, but after two years of use (AT&T’s plan approximating $120/month and MetroPCS’s $50/month), the contract’s total cost hits $3,215, while the pay-as-you-go cost rings in far lower at $1,959.

What do you think? Have you ever gone the unlocked route with your smartphone? How did it go?

Additional reporting by Claes Bell.

(Photo: Sam Churchill)


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[1] Tweet: http://twitter.com/share

[2] Email: mailto:?subject=http://www.bargaineering.com/articles/unlocking-phones-cut-monthly-bills.html

[3] a contentious and ongoing issue: http://www.nbcnews.com/id/50567386/ns/technology_and_science-innovation/t/unlocking-cellphones-becomes-illegal-saturday/#.UmYlaBaE7zI

[4] you cannot unlock a newly purchased phone: http://www.cnn.com/2013/01/25/tech/mobile/smartphone-unlocking-illegal/

[5] Infographics: http://www.bargaineering.com/articles//infogr.am

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