Unlocking a wireless device lets your phone work on any network that has compatible technology. The phone was then 'locked' to the network so even if you ended the contract prematurely, the phone would not work with competing services forcing you to buy a new phone. Instead of paying $600 for a new phone, new customers could pay $0 down in exchange for agreeing to a 2 or 3-year contract which had the price of the phone built into the monthly payments. To help make them more affordable to new customers carriers like AT&T, T-Mobile and Verizon would commonly offset the cost by locking a phone to their network. Cellular phones are expensive technology.
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