A SIM lock, simlock, network lock or subsidy lock is a capability built into GSM phones by mobile phone manufacturers. Network providers use this capability to restrict the use of these phones to specific countries and network providers. Generally, phones can be locked to accept only SIM cards based on the International Mobile Subscriber Identity, which has elements of:
- Mobile country code (MCC; e.g., will only work with SIM issued in one country)
- Mobile network code (MNC; e.g., AT&T Mobility, T-Mobile, Vodafone, Bell Mobility etc.)
- Mobile station identification number (MSIN; i.e., only one SIM can be used with the phone)
Additionally, at least Nokia phones can lock group IDs which are used in voice group call service.
In most countries, most mobile phones are shipped with country and/or network provider locks. 
Most mobile phones can be unlocked to work with any GSM, such as O2 or Orange (in the UK), but the phone may still display the original branding and may not support features of the new carrier; besides the locking, phones may also have firmware installed on them which is specific to the network provider. For example, if you have a Vodafone or Telstra branded phone in Australia, it displays the relevant logo and may only support features provided by that network (e.g. Vodafone Live!). This firmware is installed by the service provider and is separate from the locking mechanism. Most phones can be unbranded by reflashing a different firmware version, a procedure recommended for advanced users only.
The reason many network providers SIM lock their phones is that they offer phones at a discount to customers in exchange for a contract to pay for the use of the network for a specified time period, usually between one and three years. This business model allows the company to recoup the cost of the phone over the life of the contract. Such discounts are worth up to several hundred US dollars. If the phones were not locked, users might sign a contract with one company, get the discounted phone, then stop paying the monthly bill (thus breaking the contract) and start using the phone on another network or even sell the phone for a profit. SIM locking makes it more difficult to do this.
A handset can be unlocked by entering a code provided by the network operator. Alternative mechanisms include software running on the handset or a computer attached to the handset, hardware devices that connect to the handset or over-the-air by the carrier. Usually the unlock process is permanent. One example is the Apple iPhone, which is officially unlocked (when applicable) every time during its activation step. The code required to remove all locks from a phone is referred to as the master code, network code key, or multilock code.
Typically, a locked handset will display a message if a restricted SIM is used, requesting the unlock code. For example, on the Sony Ericsson T610 mobile phone, "Insert correct SIM card" will appear on the display if the wrong SIM is used. Other handsets may display different messages such as "Enter special code" or "Enter unlocking code" or in some cases the handset will simply display a message stating that it is locked. Once a valid code is entered, the handset will display "Network unlocked".
The unlock code is verified by the handset and is generated by the network provider, typically by an algorithm such as a one way hash or trapdoor function. The algorithms used in many handsets are based on the IMEI number and the MCC code and have been reverse-engineered, stolen or leaked. Such handsets can be unlocked using software that generates an unlock code from an IMEI number and country and operator details. Other manufacturers have taken a more cautious approach, and embed a random number in the handset's firmware that is only retained by the network on whose behalf the lock was applied. Such handsets can often still be unlocked, but need to be connected to special unlocking hardware that will rewrite the part of its firmware where the lock status is kept, and often even recover a phone that is bricked or completely damaged in the software sense. Other handsets, notably high-end PDAs and smart-phones, can be unlocked by the use of software that can read the unlock code directly from the firmware.
Most handsets have security measures built into their firmware that protects them from repeated attempts to guess the unlock code. After entering more than a certain number of incorrect codes the phone becomes hard-locked and unlocking hardware must to be used in order to unlock them.
Handset manufacturers have economic incentives both to strengthen SIM lock security (which placates network providers and enables exclusivity deals) and to weaken it (broadening a handset's appeal to customers who are not interested in the service provider that offers it). Also, making it too difficult to unlock a handset might make it less appealing to network service providers who have a legal obligation to provide unlock codes for certain handsets or in certain countries.
In some cases, a SIM locked handset is sold at a substantially lower price than an unlocked one because the service provider expects income through its service. SIM locks are employed on cheaper (pay-as-you-go) handsets, while discounts on more expensive handsets require a subscription that provides guaranteed income. Unlocked handsets can have a far higher market value, even more so if they are debranded. Debranding involves modifying the firmware to remove the operator logo or any limitations or customisations that have been imposed on the handset by the operator, and is usually accomplished with hardware designed for a particular handset model.
The main reason to unlock a handset is to be able to use it with a different SIM card. Consumers may wish to continue using their previous provider with a new handset or when traveling abroad they may wish to connect to a foreign network with a prepaid subscription.
Nevertheless, the fundamental principle of GSM and its successors, currently 3GPP, is open interfaces which encourage competition among multiple vendors. This is the reason a mobile phone is, in fact, a combination of phone and the subscriber identity (SIM). Customers should be able to use any SIM card in any phone. Locking the phone to a network is not much different from having the SIM built into the mobile phone. Network operators in industrialised countries are not bound by law to give the phone unlocking code to subscribers even after the expiry of the contract period. Even when they give, it is exorbitantly priced. The situation is much better in emerging markets. Mostly people use unlocked phone there. Companies do not woo customers with subsidised phones hoping to recover the cost within a contract period due to other reasons though. Mobile phones with multiple SIM cards are quite common in India. People have more choices in making and receiving phone calls when they have a phone with multiple SIM cards. On the other hand almost all phones sold in UK are network locked and single SIM.
A practice known as box breaking is common in the UK and some other markets. This involves purchasing subsidized handsets (usually pay-as-you-go) from retail stores, unlocking the phones, and then selling them (often abroad) for a higher price than the subsidised retail price. The SIM card that came with the handset is then either thrown away, sold or used elsewhere. This practice is legal in the UK and provides a de-facto limit to the extent to which networks are willing to subsidize pay-as-you-go handsets. While the act of box breaking is legal, some businesses are also engaging in illegal activities such as exporting the box-broken phones to other countries, to sell as grey market goods without paying import duties (known as Carousel Fraud) or substituting counterfeit batteries and chargers.
Some companies offer an online unlocking service. This service requires that the individual who wishes to unlock a handset provide their IMEI number and country and operator details to the company, either via email or a web site. The company will then provide the unlock code for the handset. Such companies may email the unlocking code which will remotely unlock your device. Some companies also offer unlocking services that require sending the phone to be unlocked by a technician. Other companies sell unlocking hardware, including devices which fit between the SIM card and the phone to spoof the original network id during registration and devices to read and edit the handset's firmware. The pricing for unlocking your device will vary depending on your network it is locked to and the model itself, as each unlock code is unique to the handset. On average it typically costs around 7 to 40 USD depending on model and make. Service providers such as Rogers and Bell have recently offered unlocking services for their subscribers as well. Although it may be more expensive than third party unlocking companies, often it may be more reliable to deal with the service provider directly.
Laws and Practices on SIM/network locking
The US and UK do not have any laws governing SIM locking, but carriers often offer unlocking codes, not necessarily free of charge.
Many countries listed below have some form of SIM locking laws specifying the period of SIM locking and the cost of obtaining unlocking codes. The worldwide launch of the iPhone has shattered numerous myths about whether some countries have laws against SIM locking.
In Australia, carriers can choose whether to SIM/Network Lock handsets or not and usually tend to only SIM/Network lock prepaid handsets. There does not appear to be any regulation or law on SIM locking in Australia.
One law professor, Dale Clapperton, gave a talk stating that bundling iPhone and mobile phone service could be violating the Trade Practices Act. However, no other legal professional or academic has come out in support of this viewpoint. This also doesn't address SIM locking per se, only as applied to subsidised iPhone purchases, and persistence of the lock beyond the contractual period.
Until 2007 Belgium had laws prohibiting bundling, but they were challenged as violating European Directive 2005/29/EC The Unfair Commercial Practices Directive.
On April 23, 2009, the European Court of Justice ruled against Belgium and struck down Belgium's anti-bundling law. The Belgian government was given until May 2009 to change the law, failing which the European Commission would commence proceedings against Belgium.
This leaves Singapore and Israel as the only countries in the world that forbid SIM locking and contract/phone bundling outright.
In Brazil, SIM locks are not prohibited. However, the mobile carrier must inform the consumer of the existence of a SIM lock. Anatel, Brazil's telecom regulator, set the maximum sim-locking period to be 12 months and required the carrier to unlock for free of charge after 12 months. After this regulation most telecom operators started unlocking the devices as soon as you buy it, so you could leave the store with an unlocked phone.
In Canada, there are no laws regulating SIM locking or unlocking. As of March 22, 2011 No Canadian wireless service provider sells unlocked phones, However, Wind Mobile offers the unlock code for free after 90 days of paid service. On December 15, 2010 Rogers Communications started offering to unlock their full range of mobile phones for $50, after purchase, in response to public pressure on the issue brought to bear from the campaign associated with Bill C-560. Bell Mobility now unlocks phones, though not their full range of handsets, however this is for $75 and only under special circumstances. As of June 2010, the iPhone also became available unlocked when purchased for full price directly from Apple in Canada. Changes to the Copyright Act proposed by the Canadian government in Bill C-32, introduced on June 2, 2010, would maintain the legality of unlocking mobile phones, but include no measures to encourage unlocking.
On June 17, 2010, Member of Parliament Bruce Hyer (Thunder Bay-Superior North) introduced Private Member's Bill C-560, called the Cell Phone Freedom Act, which would prohibit carriers from selling SIM locked phones in Canada without first informing the consumer of the existence of such a lock. C-560 bill additionally mandates that phone companies selling new phones must unlock customer phones, without charge, at the end of contract or upon purchase of phone outright, when requested by the customer.
The carrier can choose to bind contracts up to 6 months from the contracts' start. Many of the carriers choose to lock the phones, but can only do so for 6 months. If the phone needs to be unlocked within the first 6 months, the carrier can charge DKK 500 (~ € 67) for the unlock. After 6 months, the carrier is obliged by law to unlock the phone free of charge. But the consumer needs to contact the original supplier, and provide the IMEI and original phone number for which the phone was sold to.
Countries in the European Union (EU) each have their own legislation on SIM locking, but must comply with the EU Unfair Commercial Practices Directive (Directive 2005/29/EC of 2005).
In Finland carriers are not allowed to sell SIM-locked GSM phones, nor are they allowed to offer tie-in sales on GSM equipment. Under Finnish law a tie-in sale is defined as selling the equipment for a discounted price contingent on the consumer also acquiring a new service contract from the seller. Under the terms of a provisional exception, valid from 2006 until 2009, tie-in sales were permitted with 3G handsets, and 3G equipment which is purchased under such tie-in sales may be SIM-locked. The SIM lock must be removed free of charge at the conclusion of the tie-in contract, within a maximum duration of 2 years. As of September 2008[update] the Finnish government was preparing to extend the exception, and at the same time was considering reducing the duration of tie-in contracts to one year.
In France, SIM locks are not prohibited. However, the mobile operator must inform the consumer of the existence of a SIM lock, and the subscriber has the right to request that the lock be removed at any time. No later than three months after the conclusion of the contract, the mobile operator must "systematically and free of charge" provide the subscriber with a procedure to deactivate the SIM lock. Proposal to shorten the time that operators may charge a fee for removing the SIM lock prior from six-month to the three-month deadline.
In Germany, there does not appear to be any effective law regulating SIM locking. For example, the iPhone was initially offered for sale in Germany exclusively through T-Mobile, and it was locked to T-Mobile's network. They began to provide unlocking codes for that phone after they were sued by Vodafone and a temporary injunction was issued requiring T-Mobile to do so. Vodafone's injunction was later overturned, and the iPhone is again available exclusively locked to T-Mobile. While T-Mobile Germany told the court that they would unlock the iPhone after the contract, they were doing it voluntarily.
In Honduras, there is a general law applicable to all consumer relations engaged in the national territory and provided by natural or legal persons, public or private. This law is called "Ley de Proteccion al Consumidor" or "Consumer Protection Act of Honduras", approved by Legislative Decree No.24-2008, and it regulates the activities of any goods and services providers stating the principles that they must follow in order to operate in this country.
Article 20 of this law states the prohibitions that sellers are obliged to abide when selling a good or providing a service to people. Paragraph 7 of this article states that it is prohibited to a provider to "place seals, adhesives, duct tapes or analogous mechanisms, which prevent the consumer to make free use of the product, except those mechanisms used by the manufacturer for warranty purposes;".
Even though the existence of this law, local carriers continue to apply SIM restrictions to the phones they sell. For example, the iPhone is sold by Claro in Honduras and is SIM locked, which suggests that this general consumer protection law does not prohibit SIM locking of cell phones.
In Hong Kong, carriers are not allowed to SIM-lock a phone for the sole purpose of tying customers to their network. But Hong Kong carriers can SIM-lock a phone to protect the handset subsidy, to enforce mobile plan contracts or to protect from theft. After the initial purchase subsidy has been recovered, or the full cost of the equipment has been paid up under a rental or installment agreement, the carrier must provide a detailed procedure for unlocking the equipment free of charge upon request.
In India SIM locking is not common. Initially each state in India had a different operator and roaming across states was prohibitive. It was cheaper to change the SIM card than the high roaming charges. The number of inter state travellers demanded unlocked phones. Usually phones and SIM cards are sold separately. Mobile phone manufacturers sell the phones directly to customers in India than through operators. Dual SIM phones are quite common in use. People decide to call one another using a cheaper operator suitable for the particular call and time of the day from a Dual-SIM phone without even switching it off. This along with other factors, encourages competition among network operators and brought down the mobile phone call charges in the second largest mobile phone network from initial 32 (USD 0.75) in 1996 to 0.5(USD 0.005) in 2011.
According to the Arrangements Law passed on December 29, 2010, Israeli carriers are banned from locking handsets sold by them, and are obligated to unlock any handset previously sold at no charge.
Italy has SIM locking laws requiring that carriers must specify the amount of subsidies, and allowing subscribers to obtain unlocking codes after nine months by paying half of the listed subsidies. The SIM lock must be removed within 18 months.
Dutch mobile carriers have an agreement  with the Netherlands' telecom regulator, OPTA, to establish a code of conduct  with respect to SIM locking — specifically, unlocking fees can be charged within the first 12 months and SIM lock cannot last longer than 12 months.
In a 2002 letter to the Dutch Secretary of State of Economic Affairs, OPTA stated that the telecom regulator has decided to start working on the formalization of the voluntary code of conduct into legislation. However, a 2006 report written by the Dutch Ministry of Economic Affairs, stated that competition in the Dutch mobile market is sufficient and the formalization of the voluntary code of conduct into legislation is not needed. Thus there are no SIM locking laws in the Netherlands.
Locking had occurred in New Zealand only to a limited degree before May 2008 when Vodafone New Zealand announced they would begin locking handsets and charge $50 to unlock them. It is speculated that locking began due to the fact Telecom New Zealand were building their new XT Mobile Network based on UMTS technology, allowing handsets to change networks for the first time as Telecom's existing network (the only other network at that time) was based on CDMA technology. 2degrees were also building their mobile network at this time. After pressure from the Commerce Commission, Vodafone relented on its locking policy and will unlock any locked phones for free.
A 2006 study sponsored by the Portugal regulator, ANACOM, on handset subsidies and SIM locking concluded that there are no special regulatory concerns on offering subsidized SIM-locked equipment in exchange for signing a contract tying a customer to a particular network. Network providers are allowed to apply SIM locks as they see fit, and they may voluntarily remove them if they choose to do so. In the paper, the author stated that the average unlocking fee charged by Portuguese carriers is 90-100 euros. A recently approved law  requires network operators to unlock a device free of charge if the respective contract has already expired. It also establishes limits to the fees that operators may charge to unlock a device while it is still under contract.
Romanian telecom regulator ANCOM signed a code of conduct with several Romanian carriers providing that as of September 1, 2009 mobile operators selling handsets locked within their own network have to inform clients whether the handset is locked and provide unlocking upon request. It is "self-regulation" by the carriers to prevent the regulator from actually imposing regulations on them. If the handset is not purchased together with other electronic communications services, the mobile telephony operator that sells it will bear the unlocking costs and will not bind the terminal unlocking by the purchase of other services or by the payment of other fees.
If the handset is purchased as part of a promotional package or at a preferential price and the customer requires the unlocking before the expiry of the minimum period provided in the contract for communications services concluded with the operator, the customer will have to pay both the unlocking fee and the penalty for the anticipated unlocking of the handset. The price charged to unlock handsets will not exceed the costs of this operation and operators are obliged to meet unlocking requests within 15 days.
Singapore is the first (now also Israel) country that forbids outright SIM locking and contract/phone bundling. Singapore's telecommunications regulator has ruled that the competition clause in mobile carriers' licenses means SIM-locking is not allowed, and has warned at least one operator for selling SIM-locked phones 
In 1998, the Spanish telecom regulator, Comisión del Mercado de las Telecomunicaciones, saw that Spanish mobile carriers already provided unlocking codes voluntarily for a fee within the first 12 months and for free after 12 months, so CMT decided not to put any legal framework in Spain. CMT has not revisited this decision since then, therefore there are no SIM locking laws in Spain.
In the United Kingdom, mobile phone network providers are not obligated to provide unlocking, even after the end of the contract. Ofcom, UK's telecom regulator, allowed 3 UK to sell a mobile phone with the SIM card permanently superglued to the phone. Most operators offer some form of unlocking service, depending on the state of the contract and the model of phone, but usually for a charge. The full Oftel 2002 SIM-lock position paper specifies that there is no SIM locking law in the UK; the regulator wants only "consumer awareness". The examples within the position paper are just "examples" of current carrier practices for illustration purposes, but do not reflect any official Oftel regulation. The main networks often agree to unlock handsets for a charge, either at the end of a contract or, for prepaid handsets, after several months. Some Blackberry handsets supplied by Vodafone (e.g., Storm) are examples of a UK carrier not offering unlocking codes. As of April 2011 O2 will unlock any of their pay-monthly phones for free, even if they're still in contract, with the exception of handsets made exclusively for them, such as their Palm devices.
One of the two national GSM carriers, T-Mobile, will unlock handsets for those with active account in good standing for at least 40 days and no unlock code request in the last 90 days. T-Mobile will also unlock a phone if the full retail price is paid and proof of purchase is provided through a faxed document. The other, AT&T Mobility, will usually do so once one has concluded his or her contract, but may unlock the phone in some other situations as well. Neither carrier is compelled to unlock phones by any law or regulation, and they may choose not to unlock certain phones. For example, AT&T has stated that they themselves will not unlock iPhones under any circumstances, regardless of the legality of doing so, even after customers are out of contract.
It[clarification needed] was first publicly discussed by the FCC in 2006, after a submission to the US Librarian of Congress concerned respect[clarification needed] to Digital Millennium Copyright Act (DMCA) exemptions, and Stanford law professor Jennifer Granick specifically stated that the Federal Communications Commission (FCC) does not prohibit handset locking. The DMCA formerly was claimed to criminalize unlocking[clarification needed]. However, an exemption, introduced on November 27, 2006, specifically permits it. The exemption was scheduled to expire on October 27, 2009, but was extended on an interim basis, because the Register of Copyrights had not yet completed its triennial review of DMCA exemptions. In July 2010, the Librarian of Congress extended the DMCA exemption for another 3 years.
- ^ http://telebusillis.blogspot.com/2006/08/box-breaking-and-counterfeiting.html
- ^ http://telebusillis.blogspot.com/2006/09/carousel-gang-gets-jail-time.html
- ^ http://www.theregister.co.uk/2003/07/28/fraud_cases_up_financial_losses/
- ^ http://www.tax-news.com/asp/story/story_rss.asp?storyname=24716
- ^ "Latest Reviews". http://www.news.com.au/technology/features/iphone-could-breach-local-competition-laws/story-e6frfry9-1111115642367.
- ^ http://www.builderau.com.au/news/soa/Legal-schmegal-Aussie-iPhone-will-still-be-locked/0,339028227,339286350,00.htm
- ^ Belgium law was struck down.
- ^ High iPhone Price Blamed on Subsidy Ban
- ^ Anatel Sim-locking rules http://www.anatel.gov.br/hotsites/smp/bloqueio.htm
- ^ http://www2.parl.gc.ca/Sites/LOP/LEGISINFO/index.asp?Language=E&query=7026&Session=23&List=toc
- ^ http://ca.news.yahoo.com/s/capress/100602/3consumertech/copyright_act_quicklist
- ^ http://www2.parl.gc.ca/HousePublications/Publication.aspx?Docid=4580265&file=4 48.18(1)
- ^ Bill C-560 http://www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=4640240&Language=e&Mode=1
- ^ http://www.itst.dk/teleinfrastruktur/filarkiv-teleinfrastruktur/copy_of_teleinfrastruktur/mobil/nordisk-mobilrapport/Nordisk%20mobilrapport.pdf
- ^ 
- ^ Communications Market Act
- ^ Finland to keep 3G exception in tie-in sales ban
- ^ http://www.bloomberg.com/apps/news?pid=20601100&sid=aUd5_GXQYwY0
- ^ http://www.sic.gob.hn/transparencia/documentos/Leyes/Ley_de_Proteccion_al_Consumidor.pdf
- ^ http://support.apple.com/kb/HT1937
- ^ OFTA, Office of the Telecommunications Authority, Hong Kong
- ^ אושרו עוד שלוש מהפכות צרכניות בתחום הסלולר (hebrew)
- ^ Consumer friendlier SIM-lock mechanism
- ^ Dutch Ministry of Economic Affair paper stating OPTA agreement with Dutch mobile carriers
- ^ Establishment of Conduct of Conduct
- ^ OPTA website on sim-locking
- ^ OPTA letter to EZ
- ^ EZ 2006 Report
- ^ In the runup of the European launch of the iPhone, a Dutch Macintosh website asked a lawyer to provide a simple summary of the SIM locking situation in the Netherlands.
- ^ http://help.vodafone.co.nz/app/topics/kw/unlock/
- ^ "Vodafone relents on mobile lock". Stuff.co.nz. May 27, 2008. http://www.stuff.co.nz/technology/462505. Retrieved November 11, 2011.
- ^ Griffin, Peter (May 2, 2008). "Vodafone's mobile phone lock-down". The New Zealand Herald. http://www.nzherald.co.nz/technology/news/article.cfm?c_id=5&objectid=10507579. Retrieved November 11, 2011.
- ^ Handset Subsidies – an Empirical Investigation
- ^ http://www.anacom.pt/render.jsp?categoryId=337488
- ^ 
- ^ TAS Fines M1 For Unauthorised Frequency Transmission And Issues Warning Over Sale Of SIM-Locked Cellular Phones
- ^ Spanish telecom regulator decided not to legislate SIM locking in 1998.
- ^ 3 UK superglued SIM card into the cell phone.
- ^ OFCOM Review of SIM-locking policy
- ^ Vodafone UK's position on not offering unlocking codes to Blackberry Storm
- ^ How to unlock an O2 handset
- ^ http://support.t-mobile.com/doc/tm51885.xml
- ^ Pegoraro, Rob (2008-05-29). "It's Not The Money, Can You Hear Me?". The Washington Post. http://www.washingtonpost.com/wp-dyn/content/article/2008/05/28/AR2008052803089.html. Retrieved 2010-05-23.
- ^ http://www.wireless.att.com/answer-center/main.jsp?t=solutionTab&ft=searchTab&ps=solutionPanels&locale=en_US&_dyncharset=UTF-8&solutionId=61097&isSrch=Yes
- ^ Submission to DMCA Exemption proceedings
- ^ "Exemption to Prohibition on Circumvention of Copyright Protection Systems for Access Control Technologies, Final Rule". Federal Register 71 (227): pp. 68472–68480. 2006-11-27. http://www.copyright.gov/fedreg/2006/71fr68472.pdf. Retrieved 2007-07-03 .
- ^ "Exemption to Prohibition on Circumvention of Copyright Protection Systems for Access Control Technologies". Federal Register 74 (208): pp. 55138–55139. 2009-10-27. http://www.copyright.gov/fedreg/2009/74fr55138.pdf. Retrieved 2010-05-06 .
- ^ Yahoo! News: "iPhone jailbreaking (and all cell phone unlocking) made legal"
- ^ Yahoo! News: "New gov't rules allow unapproved iPhone apps"
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