Unlocked cell phones are handsets that aren’t tied to a particular carrier or contract. They are popular with wholesalers and retailers because unlocked phones have a larger market than locked phones. For instance, a device that is locked to Sprint must be used on the Sprint network. A reseller purchasing such a phone is limited to customers that have Sprint service. Clearly, this has a major impact, especially for international resellers.
There was a time when unlocking a new smartphone was illegal, even for end consumers that were traveling that wanted to integrate international SIM cards. This changed in 2015 when President Obama signed the Unlocking Consumer Choice and Wireless Competition Act into law. The law stated that carriers could not deny a reasonable request to unlock a phone.
The fact that phones can be unlocked at will is good news for retailers and wholesalers, as locked handsets always sell for less than unlocked handsets, and if you know how to unlock a phone you can benefit. In this article we’ll discuss the legality of unlocking cell phones, differences between locked and unlocked phones, how to unlock a phone, and the value of unlocked cell phones to retailers and wholesalers.
Buying and Selling Unlocked Phones
If you’re in the business of selling unlocked phones, it is best to buy them from your supplier already unlocked. That’s because unlocking handsets takes time and does not work 100% of the time. If you’ve found a great deal on locked phones and you’re looking for instructions for how to unlock a locked phone, it’s imperative to first make sure that the phones are not stolen or blacklisted with the Cellular Telecommunications Industry Association’s online Stolen Phone Checker. All you need to do is enter the phone’s unique serial number (the IMEI/MEID/ESN on the back of the device or in the Settings menu) in the checker. If a phone has been flagged as lost or stolen, it will be on the GSMA Black List. Attempting to unlock or sell a flagged handset can land you in hot water.
Using Third Party Unlockers
We will discuss how to unlock a phone for free later in this article, but if you have a lot of handsets to unlock, you might be tempted to use an unlocking service. You can find a number of websites for these third-party services, and most of them operate the same way. They get large batches of unlock codes and sell them to retailers and wholesalers, usually for less than a dollar per code.
The problem is that gray market unlocking can be unreliable. This is because carriers are unhappy that this gray market exists and will sometimes audit lists of recently unlocked devices. When they discover a phone was unlocked by a third-party service without verification that the device’s owner met the carrier’s unlocking criteria, they might flag it. The flagged device will relock after the next software update, and if that happens to any of the unlocked phones you’ve sold you’re going to have some very unhappy customers. Always read reviews of third-party unlockers before paying for codes.
As of 2018, you don’t have to worry about the legality of bulk unlocking. In 2013, updates to the Digital Millennium Copyright Act (DMCA) made all cell phone unlocking illegal, but after widespread consumer outcry, the Unlocking Consumer Choice and Wireless Competition Act was drafted. The original version of the Unlocking Consumer Choice and Wireless Competition Act denied legal protections to “bulk unlockers” (a group that potentially included used phone wholesalers and retailers), but the version that President Obama eventually signed into law contained no restrictions regarding bulk unlocking.
That means third-party unlocking services, wholesalers, and retailers can legally unlock large numbers of devices for now. However, the DMCA exemptions are subject to review and change by the Library of Congress every three years, which means that resellers need to stay on top of any changes to the legal protection related to the unlocking of cell phones.
Unlocked Versus Locked Cell Phones
All mobile phones are either locked (tied to a certain carrier) or unlocked (which means they will recognize almost any SIM card). When a consumer buys a locked phone, that phone will only work on one cellular carrier’s network. The majority of new smartphones sold in the US are still locked because carriers bundle phones with monthly service plans, allowing consumers to get devices for no money down. Unlocked phones are more expensive in the short term, as the consumer has to pay the full price of the device up front.
Retailers and wholesalers that sell unlocked phones still need to think about network compatibility when selling individual devices. Not every unlocked handset can be used on every carrier network. For instance, you can’t use an ATT GSM unlocked phone on the Verizon CDMA Network. If you are buying to ship abroad, you need to pay particular attention to the bands and network on a device and make sure it will work in the geography you are selling into. Universal unlocked phones work on all major US carriers, but may not work with overseas carriers.
Why Unlocked Phones are Usually Better than Locked Phones
If a device can only be used on a single network, it will be useless to retail customers unless they’re already using that carrier or are willing to switch. Unlocked phones have a larger market, and can be sold for a higher price because they don’t come with built-in limitations. But if you do have a market for locked phones, you may be able to make more profit because you can get locked handsets at a cheaper price.
How to Unlock a Phone for Free
Carriers can’t charge you to unlock a phone, but you will have to follow the specific procedures outlined by each carrier to unlock devices. How to unlock a cell phone will vary depending on which network the device is tied to. Here are the instructions for how to unlock a phone for each of the major carriers along with links to more information:
AT&T — For most devices, there is an unlock request form you can fill out online using the IMEI number for the device. After you submit the form, AT&T will send you a confirmation email with a link. Click the link, and AT&T will send unlocking instructions within two business days. Note that prepaid devices must be active for six months before they can be unlocked. Start the unlocking procedure here.
Sprint — Devices with domestic SIM cards launched after 2015 automatically unlock when they become eligible. To get an inactive device unlocked, call Sprint customer care at 888-211-4727 or request an unlock through Sprint’s online chat. See the full unlocking requirements here. Keep in mind that Sprint-branded phones use a relatively obscure networking technology and won’t work on other networks.
Verizon — Call 888-294-6804 to request an unlock. A representative will walk you through the procedure, which involves entering a code (000000 or 123456) for most devices. For Verizon World Devices and prepaid 3G phones, you’ll need to call 800-922-0204 to get help from a Verizon tech. See the full unlocking policy here.
T-Mobile — Use the T-Mobile Unlock app on supported devices or unlock the handset over chat or via phone by calling 877-746-0909. See the unlock requirements and procedures here.
Most retailers and wholesalers deal in unlocked phones whether they’re buying or selling because it’s easier. Now that you know how to unlock a phone, however, you may be able to profit by purchasing locked phones at a discounted price.