Some phone makers hope people will pay full un-subsidized price for an “unlocked” phone. These phones will cost $500-$700 but you don’t have to sign up for a 2 year contract. http://news.cnet.com/8301-1035_3-10277723-94.html
If I had one of these phones, do I still need to pay a monthly fee for phone service? Does the cell phone tower somehow know my phone is not an official AT&T phone, or will the cell phone tower send signals to any phone that’s in its network?
If I do have to still pay a monthly fee, is it at least substantially cheaper than the subsidized price I’d pay when I got a free phone? If not, then why in the world would anyone ever buy an unsubsidized phone if you’re going to have to pay the subsidized monthly price anyway?
You do still need a plan. Note this sentence from your link: “But regardless of whether a device is subsidized, users will have to purchase some kind of voice and/or data plan, depending on the type of device they buy.”
Locked phones link the phone to the carrier. The only way you could get an iPhone when they first came out was to get it from AT&T, along with a subscription plan. (This may still be the case, but I don’t keep up with iPhone news.) There is no way to use an iPhone with, say, Sprint, even if you prefer Sprint over AT&T.
However, if I had an unlocked iPhone, I could use it with Sprint. Since the phone number and such is kept in the SIM card, I can stick that in the unlocked phone and go on about my business.
Some people would prefer that freedom over being forced to go with a specific carrier in order to get the phone they like, so they’d be willing to pay the premium on an unsubsidized phone.
Another benefit of buying a phone outright is that if you want an expensive phone it may only be available on an expensive plan, but you might not need such an expensive plan if you don’t make a lot of calls. It might be cheaper over the two years to buy the phone outright and then get a cheaper voice/data plan from the provider.
So the SIM card is locked to a particular carrier then? Is there some sort of generic phone/sim card that will communicate with whichever tower is closest, regardless of the carrier?
It sounds like you still have to pay the exact same monthly carrier charge whether you get a subsidized phone or an unlocked phone, right? The AT&T webpage doesn’t mention any discount for bringing my own phone. If that’s true, then the “freedom” of being able to switch carriers without a contract seems quite false doesn’t it? Sure, you’re not locked in to a 2-year contract, so you can switch carriers anytime you want – but the new carrier will charge you pretty much the exact same cost as the old carrier, so what difference does it make?
Here’s what I did. When I started to travel out of the country several times a year, I needed a phone. So, I purchased an unlocked phone that I liked, which as noted it must have a sim card.
If you want to spend $500 on a phone, that’s your choice, but you can find plenty of unlocked phones for around $100; it depends on what your needs are.
I went to Walmart and purchased an ATT go phone for around $10. I pulled the sim card out of it an put it into my newly purchased unlocked blackberry and I had service.
This worked for me, because I barely use the voice, but I do use around 200 SMS a month, which is $5 per month. I spend maybe and that’s pushing it, $175 a year on actual voice + the $60 a month on SMS.
You can of course choose a different plan that suits you. I like it because I couldn’t find a plan that would allow me the freedom to use the phone on a as needed basis and allow me to choose the phone I wanted and not waste money.
When I travel out of the country, I stop at a local shop, purchase a sim card and have service. Just like that.
It is the best thing I ever did, but i use my phone primarily as a simple communication device and not a multi-media thingy.
OK, then, new question, after reading up on how SIM cards work
Why do companies bother to make locked phones? I get that carrier subsidize the phone and make you sign a 2-year agreement to recoup their costs. That’s fine. But given that they’ve already had you sign a legal contract to continue paying them for 2 years (or pay an early termination fee if you don’t) then why do they care if their phone can be used on a different network? You’re still legally obligated to pay them the price of the full 2-year contract.
So worst case – you buy the subsidized phone with a 2-year contract, then maybe sell the phone to somebody else at a profit. But now you still have have to keep paying the carrier 2 years of monthly fees (or else pay the early termination charge) so the carrier still gets all the money they were supposed to get. Why should they care if the phone is now being used by somebody else? (Especially since that somebody else will now have to pay the carrier monthly charges WITHOUT benefiting from a subsidy?)
If the phone is GSM and uses a SIM card, yes. Sprint and Verizon are CDMA networks and don’t use a SIM card. You won’t be using an iPhone on Sprint even if you wanted to.
The only two reasons to buy an unbranded phone in the States or Canada is to either go overseas and pop in a paygo sim, or to use a domestic paygo service from another carrier. Walmart has these really cheap paygos, but the handsets are barebones.
So now your buyer for the phone takes the sim out of the generic and puts it into your old phone and AT&T or T-mobile has basically lost a chance on a post paid customer or has lost money from an existing post paid customer that signed up for a multi year contract on a bare bones phone that they originally wanted cause it was simple and now they want a more capable device.
Lastly, they do it simply because they can. Like any other corparation, they will adhere to compliance with existing laws, if those laws dont exist , they wont unlock your device.
Locked phones also probably mean that you are more likely to stick with your current provider.
While my last phone started out with a 2 year contract, I ended up using it for close to 5 years. The phone worked. I had all the chargers and cables. And it was locked into my provider. In order to switch networks, I had to get a new phone. And new chargers, and new data cables. If I could have walked into carrier 2’s store, with my existing phone, and gotten a plan with them, I would probably have done it earlier.
Carriers fought very hard against your right to take your number to another carrier. They knew that many people stuck with their company just to keep their number. Now people can move and take their number which makes switching easier.
