Apple Iphones come locked to the carrier that sells them, usually ATT, but also Verizon. If you try to use it on any other network, they're blocked.
How does this work? They use a system called "sim locking" which checks the little removable SIM chip in your phone to make sure that it is from ATT.
Why would you want to unlock your phone?
If you travel in Europe, and want to get a local sim chip so you can use cheaper service while traveling. Roaming on ATT is about $2 a minute. If you get a local sim card, this drops to about 10-30 cents a minute; plus all incoming calls are free.
Many people unlock their phone becuase they want to drop ATT and switch to TMobile.
How much money does this save? Well, an unlimited account on ATT seems to cost about $150, with a two year committment. On TMobile it's about $75, including all the fees and taxes. And unlimited on ATT is actually limited, but their policy on this changes from time to time. If you start streaming movies you're soon going to hit data charges. But even without that, the savings are huge. $75 a month over the two years of a contract is about $1800. That's how much you can save if you take the time to unlock your phone.
For reference, here are the data plans on ATT. To get your final ATT cost, add this to your cell plan cost, then multiply by about 1.5 to cover various baloney charges they add on your bill every month. That's all money you save if you switch to another company. Unfortunately, TMobile is really the online carrier in the US that uses the same sim-card phones as ATT. But the savings are huge.
I think unlocking phones is a good thing. I paid for the phone, I own it, and under US law, I have the right to unlock the phone if I want to. OK,this is not completely true, I won the phone off Chris, in a poker game. He used it for a year under contract and then replaced it with a new one from ATT, so this one has been paid for.
Unlocking phones improves competition and competition keeps the phone companies honest. Competition is the American way.
This is a two step process. First you have to JAILBREAK the phone, which means, to remove the lock on what programs you can run, and then you have to UNLOCK the phone, which allows you to use a sim from a different company
Before you start, be sure to back up your iphone using Itunes. Plug in the phone, right click on the phone where it is listed on the left side of the screen Itunes, and back it up.
Next you need to go to TMobile and get your new sim. Don't put it in the phone yet.
It is also recommended to turn 3G off.
Finally, you must make sure that your phone has a network connection. I connected mine up to my wireless base, and then surf to a couple of pages to make sure it's working.
Do this by visiting the website jailbreakme.com with your iphone using "Safari", the build in browser.
When you get to jailbreakme.com, just follow the instructions. It takes less than a minute. The website can't
Once this is done, your phone will have the new CYDIA program, which is an alternative to the Iphone App Store, but which includes software banned by Apple.
The second step is to "unlock" the phone using "Ultrasn0w""
Restart the phone and then find the Cydia icon and start it up.
You need to add a new "repo", which is a software source, which is http://repo666.ultrasn0w.com/. Note: that last “o” is actually the number zero “0”. If you use the letter “o” you’ll get an error.
Once you have set the repo, you're ready to download the unlocking software.
Search for ‘ultrasn0w’ in Cydia, and install it. You will have to click a couple of times to complete the installation.
Reboot your iPhone 3G
There is a small hole in the top of the Iphone. Press a paper clip in the hole and you should be able to pop the sim out and put in the new one. *snap*.
If necessary restart the phone again. You should be up and running with your Tmobile service (or whatever other carrier you may want to use.)
http://en.wikipedia.org/wiki/IOS_jailbreaking
http://blog.iphone-dev.org/post/128573459/ultras-now
http://www.youtube.com/watch?v=BZF9NGI2qWc