Cellular service providers do something known as “locking” to all the cell phones that will be used on their network by instructing the cell phone manufacturers like Samsung to lock the phone via software before the phone ever leaves the factory. What this does is prevent you from using your cell phone on any other network than the one it was originally activated with.
This practice severely limits both your flexibility in choosing another service provider and the resale value of your phone because you can only sell it to other people subscribed to the same network as you are. Fortunately, locking is a simple software-only gatekeeper that is designed to be easily undone if you enter the correct unlock code into your device.
Why Phones Are Locked
There are a few good reasons why phones are locked to begin with but really it is just a way for the cell phone companies to squeeze you for more money. They want to make it difficult for you to switch providers so that you will continue feeding them money every month.
Your New Phone Isn’t Really Free
Most phones except the highest end models can often be obtained for “free” when you sign a contract. In Canada, contracts are now typically 2 years long which was recently adjusted down from 3 years because of a new code of conduct introduced by the CRTC that enforces shorter contracts.
However, the phone isn’t really free of course. A brand new top of the line smartphone actually costs around $700 and lower cost models typically cost in the $300 to $500 range. That’s a lot of money you aren’t paying when you buy a new phone, eh? That’s because the cell phone service provider pays the manufacturer for you and then sets aside a sizeable portion of your bill every month towards recouping their cost of paying the manufacturer on your behalf.
For that reason, they need some way to guarantee that you won’t just walk away with your brand new and very expensive phone without giving them time to recoup their initial losses.
Why You Should Unlock Your Phone
There are many reasons why unlocking your phone can be beneficial and the best part is that unlocking your phone is completely legal in Canada anytime you want to!
Your Plan Is Too Expensive
So imagine your contract is nearing an end and your cell phone company has recouped all of the money they spent to purchase your phone plus a sizeable profit to boot, now what happens? Part of the reason your plan costs up to $60 a month or more is because there is subsidy cost built into the price of $14-$20 per month. Therefore, shouldn’t your plan drop in cost by that amount after the contract expires?
One would hope that would be the case, but it isn’t. They will continue to happily take advantage of that extra amount you are now paying each and every month for the same services and just use it to pad their bottom line relying on your locked-in status to keep you as a customer.
Avoid Costly And Inflexible Contracts
Knowing how to unlock a phone or unlocking your existing phone can help you avoid contracts in the following ways:
- When your contract is over you can keep your existing phone and use it with another carrier.
- If you break or lose your phone you can easily buy and unlock a used phone or get one from a friend without having to sign a new contract to get a replacement.
- Use an unlocked phone right from the start and never sign a contract to begin with.
If you’re stuck in a contract you always have to worry about stiff cancellation penalties if you cancel your service for any reason. Without a contract, you don’t have to worry about cancelling your service when money gets tight, when you have to move to another province or country, or when your phone dies or disappears and you can afford to buy a new one at the full price. Who needs that stress?
Having an unlocked phone gives you the freedom to choose any plan with any provider at any time. Not all plans have a subsidy cost built in, like most prepaid plans for example. With those plans you can pay more for the phone upfront and get a cheaper plan or pay as you go option.
There are also certain times of year when cell phones and plans go on sale. Just before Christmas in late November and back to school time are typically the best times to shop for a new cell phone or provider because that’s when the competition for new customers really heats up. At these junctures, you can be poised with your unlocked phone to switch to the provider with the best limited time offer.
The cost savings can be substantial. For instance, I am currently on a $29 monthly plan with Fido that offers the following features:
- 450 daytime minutes
- Unlimited weekends and evenings after 6pm.
- Canada-wide long distance included with every minute at no additional cost.
- Unlimited text, picture, and video messaging.
- Caller ID, Voicemail, 3-way calling and all the other usual features.
- 600MB of data.
Most people are paying between $50 and $60 for a plan with similar features. This plan was only available for a very limited time in Atlantic Canada only and if I had been locked into a contract with a locked phone I never would have been able to jump on it when I saw it!
If you pick any model of smart phone and start looking around on Kijiji or Ebay for that particular model of phone you will quickly see that any phone that is labeled as unlocked commands a significantly higher price than those that are locked to a specific carrier.
Even if you can’t sell the phone for more money, your pool of potential buyers increases dramatically and you can even sell your phone into the USA giving you a much higher chance of unloading your old phone for a decent price in no time flat.
So How Do You Unlock Your Phone?
By now I bet you’re just itching to unlock your phone after reading all of those incredible benefits, eh? Well, you’ll have to hold your horses because I’m going to save that for another soon to be posted article sometime in the next week or two. Stay tuned for that one and I’ll guide you through the process the best I can.