So, I purchased a quad-band unlocked cell phone to use on our upcoming trip to New Zealand. At the same time, I purchased a “Pay as you Go” sim card from T-Mobile.
The phone, an LG CU500v, which is quad-band, was supposedly unlocked. What I’ve learned is that in most of the world, people purchase a phone first, and then connect it to the service of their choice, with the majority using pre-paid services. Here in the U.S., most use a post-paid billing system, with a phone in which the purchase price has been subsidized by the carrier — usually for a 2 year contract.
When the phone is subsidized like this, the phone company sells you the phone with what is called a “sim lock”. This means that the phone will only accept a sim card for the one company. Placing a sim card from another company will render the phone inoperative. Unlocking the phone requires a set of codes, one of which is individual for the telephone itself. Once unlocked, sim cards from any carrier will work, even in other countries. CDMA phones, from Verizon and Sprint in the U.S. and a number of other countries, don’t use sim cards.
There is also another kind of lock, called a “feature lock”. This is sometimes done by the phone company when a particular feature, like multimedia texting or internet tethering, is deemed to put too much demand on phone bandwidth resources. If you pay one fee for unlimited SMS and internet, you are more likely to see feature locks put on your phones. There are ways around them, but I have no experience with these.