With the iPhone 5s experience heading to Boost Mobile sometime soon, the message is apparent: small carriers that do not carry the iPhone will lose customers. US Cellular is in the same boat: it has said that it will carry the iPhone, although 9 regional carriers have been announced as carrying the iPhone in their lineup starting with the iPhone 5s – and US Cellular has said nothing about its iPhone lineup.

Even with the national carriers selling the iPhone on a regular basis (T-Mobile being the last of the top 4), carriers still want to set themselves apart from the crowd. Verizon is in this position, trying to differentiate itself from the other three top carriers so that you will choose Big Red every time.

iPhone 5S unboxed
Verizon’s iPhone 5S will work on both AT&T and T-Mobile networks.

Verizon sold the iPhone 5 last year as an unlocked device, right out of the box, and the carrier is doing the same thing now with Apple’s latest iPhone 5s. The iPhone 5s unlocked status is one that shouldn’t go unnoticed.

 

Why the Unlocked iPhone 5s is Good Marketing Strategy

The iPhone 5s comes in both locked and unlocked models. Consumers who have two-year contracts or want to get the price at a discount sign up for a locked model. Carriers lock iPhones so that consumers will not be able to take their device elsewhere, should they refuse to pay the balance on their account or pay off the remaining balance on their iPhone.

There are carriers (most fit in this group) that will unlock your iPhone after you’ve been with them for, say, three months (AT&T fits in this group). T-Mobile will do the same after some period of time, but you can get the device unlocked out of the box if you pay the full retail price for the device while purchasing service with the carrier.

In Verizon’s case, it finds itself in a unique position: a carrier that will allow contract customers to have an unlocked iPhone 5s, even during the contract experience. AT&T will let you have the same, but it will take 12 weeks to achieve this goal. Verizon, on the other hand, won’t make you wait another minute beyond the second you sign your contract.

Why is this good for Verizon? It is a good marketing strategy for Verizon because Big Red is the only carrier to allow your device to use both AT&T and T-Mobile networks while on a two-year contract. When you’re overseas in Europe and need to stop in and buy a local SIM to use your iPhone 5s, Verizon will allow you to do so.

Now, don’t get me wrong: AT&T and T-Mobile both allow you to use the unlocked iPhone 5s (retail price: $649 for 16GB, $749 for 32GB, $849 for 64GB) on their networks as well. These two carriers are known as GSM carriers – “GSM” being an acronym for “Global System for Mobile Communications.”

In other words, GSM phones (or unlocked phones, as most people know them) allow you to use your phone anywhere in the world (“global system” for a reason). CDMA carriers provide two-year contracts, but you cannot use these phones internationally. In other words, they come SIM-locked. The SIM card located in them is locked to the carrier network  alone.

In short, you may not like the fact that Verizon doesn’t allow unlimited data plans anymore (forgiving the software glitch issue from this past weekend), but Verizon’s iPhone 5s does have an edge over the others. And if you’re a travelin’ man or woman, you may want to give Verizon’s iPhone 5s some serious thought.

4 COMMENTS
  1. There is some good information here, but you have confused the phones’ communications systems with the carrier locked status. “GSM” does not equal “unlocked”, not does “CDMA” mean “locked”. GSM and CDMA are the communications systems that different phones and carriers use. It is just that with GSM, the system is much more common (in the USA and around the world), so if you have a GSM phone that the carrier is willing to unlock, you can easily utilize another carrier by replacing your current SIM card with one from the other carrier, locally or internationally.

  2. Thanks so much for writing and commenting here.

    I wasn’t using locked and unlocked as equivalents of CDMA and GSM carriers. What I am saying, however, is that CDMA carriers are locked to a specific network. While you can use a Sprint phone with say, Freedompop (an MVNO) or Republic Wireless, you can only use a CDMA phone on a specific network with carriers that support that network. GSM phones can be locked to a specific network, but can often be unlocked in the US after the phone price is paid in full. To some extent, all American phones are locked into specific networks; even with a GSM phone in America, you can only take the phone to AT&T and T-Mobile. Sprint, Verizon, US Cellular, Boost Mobile, and other carriers will not allow you to bring a phone to their network — so even GSM phones are “locked” in a sense.

    The benefit to GSM phones comes in when a traveler is overseas in Europe, and can use a local European SIM to use his or her GSM phone. No American CDMA phone, to my knowledge, will work in Europe. In fact, no CDMA phone will work on any other network — other than the one on which you activated it. I have a GS3 with US Cellular, and it has no SIM card (indicative of an unlocked, GSM phone), but only an LTE data card instead.

    I wasn’t confusing the terms locked and unlocked and equating them with CDMA and GSM; I think that I had certain ideas of what I meant by these concepts. I think that questions should be raised about what I meant by these terms, but I didn’t confuse them.

    Thanks, though, for writing in and letting me know that you’re reading. Your support is greatly appreciated. Please continue to read and support Tapscape.

  3. Isn’t verizon CDMA? Wouldn’t that limit me in using the iphone outside the USA? Also AT&T does not unlock iPhones before the 2 year contract is up. Any other phone they do but not iPhone. At least that is what they told me. That’s the only thing holding me back from choosing AT&T. If I know for sure if I can use Verizon iPhone with overseas
    Sim card
    I might stick with them.

  4. Matt,

    Thanks for writing in. Verizon is CDMA, so most phones would fit under this label. The iPhone 5S is running on GSM (not CDMA), and it seems that Verizon’s hand was forced in this matter due to the FCC’s regulations over the 700Mhz C Block that Verizon purchased for $9.4 billion in 2008. There is a section in the C Block regulations that states “handset locking prohibited. No licensee may…configure handsets that it provides to prohibit use of such handsets on other providers’ networks.” You can go here to read more:

    http://duncandavidson.com/blog/2012/09/verizon_iphone5_unlocked/

    What this says, in a nutshell, is that, since Verizon purchased the 700Mhz C Block for use on its new LTE network that is being rolled out, the carrier cannot stop the use of the 700Mhz C block. This LTE network is used abroad, since CDMA phones are exclusive to certain networks in the US. Abroad, however, GSM is the only technology that can be used on European networks; since Verizon’s LTE network must be used on its iPhone 5 (seeing that Apple implemented LTE), Verizon must allow its iPhone 5 and iPhone 5S to operate on GSM abroad.

    However, it seems that, from the link above, not only can you use it on other carriers in Europe (Vodafone, for example), but also AT&T here in the US. Verizon can do this because it has dual CDMA and GSM radios in its iPhone and both are activated. Keep in mind that CDMA and GSM radios are present in all iPhones since the iPhone 5 (and the introduction of LTE), but usually, only one of the radios is activated: either GSM or CDMA. This is why Sprint unlocked its iPhone for a while, then decided to remove the carrier unlock it had on the iPhone.

    As far as AT&T, I’ve done some research to help you with the AT&T situation. AT&T will unlock your device if you’re going overseas for military deployment, but they will also unlock your iPhone if your device is paid for in full, your contract is up (as you have stated), or you choose to pay the ETF (early termination fee). The following AT&T information should help:

    http://www.att.com/esupport/article.jsp?sid=KB414532#fbid=FmVBKR8cFQa

    There’s a section on the page titled “unlock your phone or tablet with a service commitment,” referring to current AT&T customers. AT&T will also unlock your iPhone if you’re part of the AT&T Next program that gives you early upgrades without the ETF; for everyone else on contract without the upgrade plan in place, you’ll have to pay $350 to get out of your contract and fulfill your contract service obligations prior to your iPhone being unlocked. I hope this helps.

    I am currently a prepaid tablet data customer with AT&T, and I was referring above to prepaid and month-to-month customers. Prepaid customers and month-to-month customers pay for their devices in full, as opposed to contract customers who pay an initial fee and then agree to two years of service along with the remaining price of the device. For these customers, you can see the section on those who do not have a service commitment. These individuals can get their device unlocked after 60 days if their account is currently up-to-date and they owe no back fees.

    Matt, thanks again for commenting and writing in to ask questions. I appreciate the time you’ve taken to comment here and inquire about these things. Please continue to read and support Tapscape. If there is any other way that I can be of help, please feel free to let me know. Have a wonderful day.

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