CNET'S QUICK GUIDE: Unlocked phones

Prepaid plans: Technology matters

Because the United States uses two cell phone technologies, even an unlocked phone does come with some restrictions. It all depends on whether your phone uses GSM or CDMA.

GSM
The first cell phone technology, called GSM, is used by T-Mobile and AT&T. GSM unlocked phones give you the most freedom because they use a small, plastic chip called a SIM card, which typically is located behind the phone's battery. SIM cards are issued by your carrier and contain your identity as a subscriber. When you insert your SIM card into a phone, that handset is activated and assumes your number.

While locked phones will accommodate SIM cards only from a certain carrier, unlocked phones will work with SIMs from any provider. So, if you're a T-Mobile customer and you pop your SIM into an unlocked handset, you'll be able to make calls as normal. But if you put that same SIM into a locked AT&T phone, you'll be able to dial only emergency services.

An unlocked GSM phone is also advantageous to frequent globetrotters. In most countries throughout the world, you can buy a prepaid SIM card from a local carrier and use it in an unlocked handset. That phone will then have a local number for that country, which can save you a lot on international roaming charges. For more information on using a phone abroad, check out our Quick guide to world phones.

CDMA
The second major technology, which is incompatible with GSM, is called CDMA. Verizon Wireless, Sprint Nextel, and a number of regional carriers such as Alltel and U.S. Cellular use CDMA. Though CDMA phones also can be unlocked, it's not as easy to transfer them to another carrier because they don't use SIM cards. Without the SIM card, you must ask the new carrier to activate the phone for you and assign it to your number. Not only does that involve extra steps on your part, but also there's no guarantee the carrier will oblige you. While Verizon Wireless will now activate any CDMA phone, the remaining CDMA carriers may not activate a handset that they didn't sell you.

CDMA customers also don't get same benefits when traveling abroad. CDMA is used in far fewer countries than GSM, so even if you have an unlocked CDMA phone, chances are greater you won't be able to get service abroad, much less have it activated.

So to sum it all up, unlocked phones can be quite beneficial if you use GSM, the benefits are more limited if you use CDMA. That's why we'll be focusing on GSM for the remainder of this feature.

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