Unlocked iPhone FAQ, including AT&T plan info (updated)

Updated with information about AT&T plans.

As we posted earlier, Apple is selling an unlocked version of the iPhone in the US starting at US$649. To help clarify questions about this development, we've put together this little FAQ. We'll explain what the unlocked iPhone means to you as a customer and how you'll be able to use it both at home and abroad.

This TUAW unlocked iPhone FAQ is a work in progress. You can help us out by correcting any errors you see. Just leave a comment or send us feedback on our contact page.

What is locking? Locking (also called "SIM locking") is a limitation of some phones, preventing their use outside of the issuing carrier; it is generally implemented in software and phones can be 'unlocked' either by the carrier or by third parties. Until now, the US GSM iPhone has been exclusively locked to AT&T. Another iPhone model, which uses CDMA technology, is available from Verizon in the States; there is already a second US carrier (Cricket) supporting those phones via unlock.

What has changed is that Apple now offers a GSM iPhone to US buyers that is not locked to a specific carrier. Many overseas carriers have offered unlocked iPhones before now; in fact, we're told that in the UK it is the act of selling the phone with a SIM on the same order that tags the phone's unique identifier as 'locked,' but the phone itself is unlocked at the factory and then locked in the sales process. The availability of unlocked US iPhones is likely to accelerate the worldwide liquidity of the device, as Horace Dediu puts it, since an unlocked iPhone can be taken to any GSM system worldwide.

Is unlocking the same as jailbreaking? Jailbreaking is a process that opens the full underlying iOS operating system to end-user control ('breaking out' of the chroot jail, hence the term). It has been a pre-requisite for running third-party unlocking software until now. The new Apple unlocked iPhone does not require jailbreaking or third-party unlocks to be used with non-AT&T carriers.

What carriers can you use with the unlocked iPhone? For right now, AT&T is a given for full iPhone compatibility. You can sign up for an AT&T plan with no term commitment with an unlocked unit, meaning that frequent travelers now have at least one officially-sanctioned option for temporary service; simply cancel your plan at the end of the month, and re-up on your next trip. AT&T spokesman Seth Bloom tells TUAW:

You can, of course, buy an unlocked iPhone from Apple and use it on the AT&T network. If you do, there's no term commitment – and customers may choose any current voice and data plan. AT&T offers data plans starting as low as $15 per month for 250 MB of data. (You do still need to have both a voice and data plan.)

Will the unlocked phone work with T-Mobile? Definitely on EDGE; not on 3G. Here's why.

The iPhone uses SIMs, little cards that identify you as a carrier subscriber. For calls (rather than data), you can use any carrier that offers compatible GSM SIMs, including AT&T and T-Mobile.

For data, it's not just about SIMs. It's about frequency. The iPhone 4 supports the following frequencies:

• UMTS/HSDPA/HSUPA: 850, 900, 1900, 2100 MHz
• GSM/EDGE 850, 900, 1800, 1900 MHz

AT&T uses the 850 frequency for 3G. T-Mobile uses AWS; 1700 MHz for uplink, 2100 MHz downlink. The iPhone 4 doesn't do 1700 MHz, so you're stuck on EDGE if you put a T-Mobile SIM into it (or if, like our own Rich Gaywood, you roam onto the network when traveling). This is hardware antenna design, it's not firmware patchable in the iPhone. While future iPhones may be truly universal, the iPhone 4 is not.

Where do I get SIMs? The iPhone 4 uses a microSIM, not a full-size (technically known as a 'mini') SIM. Carriers provide SIMs at their stores when you sign up for plans. You may need to use a SIM cutter in order to convert your full-sized SIM for iPhone 4 use if the store will not provide you with a microSIM.

For developers who don't really need full phone and data plans, who just need a SIM that they can make a few incoming calls to test their apps, the very best plan is H2O Wireless. Their SIMs are for sale at Best Buy. For $10 you get $5 of airtime billed at very low rates, lasting for 90 days. You will have to cut the SIM down to fit it into the iPhone 4. As OS X Daily points out, you can also get an AT&T PAYG SIM (but you may be better off not telling the salesperson you have an iPhone).

For information on prepaid SIMs available across the globe, this wiki is probably the best available reference.

Who is the primary customer for the unlocked iPhone? This phone is perfect for frequent travelers, who want to use their iPhones when visiting other countries. They'll be able to buy and use local SIMs with locally-priced calling and data plans. You may want to carry a cutter with you, however, or buy one locally/have it shipped to you if you don't think you'll get the stapler-sized device through airport security.

Our friend & former colleague Nik Fletcher has this handy guide to using your UK iPhone in the US; it's covering the use of the 3G iPhone but it should work just fine with the 4.

AT&T has not yet confirmed whether any current pay-as-you-go plan is approved for use with the unlocked iPhone, so right now the only official option for US call and data with AT&T is a standard voice + data plan (you must have both; data plans start at $15 for 250 MB and voice plans at $40 for 450 minutes of call time). Because AT&T is not subsidizing the unit, you have no term commitment and can cancel your plan at any time. See below for Pay as You Go plans.

We have contacted T-Mobile for comment but have not yet heard back about possible plans. If you are a subscriber of another US GSM carrier, like Cellular One, please let us know what they say about iPhone support.

Developers will also buy the unlocked iPhone as a contract-free unit, allowing them to purchase a device for development without committing to a plan.

What about Pay-As-You-Go? AT&T's tacit support for PAYG data plans on the iPhone ended in 2009, so keep that in mind as you read the following section.

Right now AT&T's data plans for PAYG are not confirmed as available for the iPhone. The 100 MB data pack costs $15 if you buy it atop a prepaid plan. You can swap a PAYG SIM into an unlocked iPhone 4 (or, for that matter, a locked one) but there may be some hoops to jump through to get data. All that to say, there's no official support for PAYG on the iPhone 4, but it mostly works.

If you want data, sign up for a normal iPhone contract -- keeping in mind that you cannot get a data-only or voice-only plan from AT&T right now, you must get both. As mentioned, AT&T has not yet clarified its policy on unsubsidized phones, so you may need to negotiate or you will be locked into a 2-year contract complete with cancellation penalties sans subsidies. AT&T has confirmed that there is no term commitment for these plans and you may cancel at any time. It's clearly cheaper to sign up for a $15 monthly data plan than a PAYG data plan, but then you're saddled with a $40 voice plan you probably don't need.

TUAW reader Fruit Attack adds: [The] AT&T GoPhone data package has become pretty reasonable, $25 for 500 MB. Expiration is 30 days. The downside is that you have to refill every month to keep the unused data bucket rolling. In theory you can buy a big bucket ($25 for 500 MB) in the first month and refill $5 (for 10 MB) by the end of the month to roll over the unused MBs. It's actually a pretty affordable solution. AT&T does not officially support iPhone on their GoPhone plan, so don't bother going to the AT&T store or phone for any sign-up help and support." He recommends this write-up about activating your data service.

Got suggestions for T-Mobile plans? Other carriers like CellularOne? Let us know!

Why is an unlocked iPhone almost $700? That's the "real" price of the Apple iPhone. Carriers subsidize that "price," offering you contracts in exchange for a much lower price tag. When you buy without a contract, you pay full freight.

You may ask what the real price differential is between the equipment in an iPhone and, say, an iPod touch, but that's not the way that carriers work. They have a "price." They have contracts. They have you.

Can I unlock my AT&T iPhone 4 when I am out of contract? AT&T's website says: "iPhone cannot be unlocked, even if you are out of contract." We have contacted AT&T for more details in case this information has changed.

Got more questions? Put them in the comments!