Unlocking Your iPhone Could Save You Big, At Home And Overseas

Once you unlock your iPhone, you can swap in SIM cards from cheaper or better carriers or for far better deals when traveling internationally. Photo: Wikipedia

Yesterday I wrote at length here about my personal issues and long-term frustrations with AT&T, and how that led me to decide to unlock my iPhone and switch carriers.

This is where the rubber meets the road. Here is how I did it and how it has helped and why you might want to consider something similar.

Unlocking your AT&T iPhone means breaking the technological tie between the hardware and the carrier. Once done, you can use your iPhone on any carrier’s network (Sprint, Verizon, T-Mobile) – or none at all (I’ll come back to that). First, to give credit where credit is due, I learned the actual unlocking process from Jared Newman’s excellent piece for Time’s Techland Blog (How to Unlock An AT&T iPhone in 5 Easy Steps – If You’re Lucky), which lays it out for you. At this point I want to make clear that my specialty is travel, not technology, and my path was shaped by needs, by my frequent travel and journalistic need to be connected, not by any deep knowledge of phones or carrier options. In that respect I think I am like most frequent business and leisure travelers.

The process of contacting AT&T and requesting unlocking was even easier and faster for me than Newman described, although being AT&T, they first gave me a case number and said the unlocking instructions would follow by email, which of course they never did. Thankfully I kept the case number and was able to call back days later and finally get them to send the key email.

The biggest obstacle to unlocking your AT&T iPhone this way is that it has to be out of contract, which for many owners, means you have to have had it for two years. One of the problems with seductive technology and the craving for newer versions is that every time you upgrade to a newer model, you typically roll over the contract and begin the waiting game again. For this reason, if you buy the eagerly expected iPhone5 in the next few weeks when it is expected to come on the market, you’ll likely have two years before you can unlock it. That’s why you might want to hold onto your iPhone 4 or 3 – even if you plan on getting a new one.

One of my tech-obsessed friends in San Francisco plans just this strategy. He can’t help but buy the new model, but he plans to unlock his iPhone4 and keep it, rather than trading it in, to use strictly while traveling overseas. I’m merely going to stick to my old unlocked iPhone, which I now have subscribed to T-Mobile (I’ll come back to that), and not bother upgrading.

France is just one of hundreds of countries where you will probably save big by unlocking your iPhone. Photo: Wikipedia

But even if you don’t have an iPhone at all, this strategy can work for you. Older models are routinely offered for sale, often unlocked, on eBay, Craig’s List, and lots of other sites. Every time a new model comes out, the value of the older ones typically plunges. So shortly, when the iPhone5 hits the street, I expect you could get an unlocked 4 for a hundred bucks or so. In theory you can buy a locked one and unlock it yourself, but it’s simpler to get one that has already been liberated – note to used iPhone sellers: you might as well unlock before selling because it makes your phone more attractive and there is no downside, as it can still work with AT&T for the prospective buyer. NOTE: You can also buy brand new iPhones (I don’t know about the 5 because it is not out yet) unlocked, but you won’t get the subsidized low-prices carriers offer to sign you up to plans and you will pay full retail. One popular global phone site is offering the unlocked iPhone4s 16MB for $769. By comparison, AT&T sells it with a new contract for $199.

Okay, so you can buy an unlocked iPhone or unlock your own out-of-contract model by calling AT&T, but why do you want to? Why bother?

Two good reasons: it can be cheaper at home, and much cheaper overseas.

Coincidentally, at the same time I decided to unlock my iPhone, my wife’s employer dropped a longstanding benefit of providing her with a phone, so she was suddenly in the market for a smart phone for the very first time. In the process of due diligence, I looked into the cost of adding her to my AT&T account even though I loathed the idea. Fortunately it wasn’t very tempting, due to the high cost. Then I looked at competing plans, family shared plans, individual plans, every permutation, from all the major carriers. T-Mobile had by far the best deal, and where I live, in a rural area, their coverage is actually better than AT&T was for me, making it a win-win. How big a win? My AT&T plan included unlimited domestic data and voice, but charged me for texts. My T-Mobile plan has unlimited data, talk and text – for two smart phones – and costs me less (on average about $20 less) than I was paying just for me. Talk about your free lunch. I was able to add a fully featured phone for my wife (she went with a Samsung Galaxy) and lower my monthly bill at the same time, with a better plan. Adding her smart phone to my existing account would have cost me about $1000 a year more. Without unlocking, this would never have been an option as T-Mobile does not carry the iPhone.