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Unlocked or Carrier? How You Should Buy Your Next Phone

If you've always bought your smartphone through a carrier, opting for an unlocked phone that’s not tied to any one wireless provider might be a little intimidating. But understanding how to shop for an unlocked phone — and why you’d want to — can remove a lot of the mystery and open up more options for your next device. From smartphone selection and ease of setting up to monthly costs and upgradability, we looked at all the differences between getting a phone unlocked and through a carrier to help you decide how to get your next phone 

Quick Tips

Here are the most important things to consider before you buy an unlocked phone. We explain each of these points in greater detail in the text below:

  • Always check network compatibility, since not all unlocked phones work with major American bands. Most unlocked phones work with AT&T and T-Mobile but very few also support Verizon and Sprint.
  • Consider unlocked phones if you want the freedom to upgrade whenever and hate bloatware that carriers pack onto devices.
  • Consider a carrier-backed device if you don't want to shell out a large sum of money up front.
  • When it comes to reselling phones, unlocked devices tend to command higher prices versus carrier-tied phones.
  • Sprint customers should stick with buying from the carrier or switch to a new wireless provider, as Sprint makes using unlocked phones more difficult than other carriers do.

Unlocked phones like Moto X Pure (above) can be more affordable over time compared to flagships. Credit: Jeremy Lips/Tom's GuideUnlocked phones like Moto X Pure (above) can be more affordable over time compared to flagships. Credit: Jeremy Lips/Tom's Guide

Who Are Unlocked Phones For?

If you love researching the latest phones and technologies available and hate waiting to upgrade to a new device, unlocked phones are an ideal choice. You might have to pay more up front compared to getting your phone through your carrier, but tech aficionados will appreciate being able to freely pick popular unlocked phones, such as the OnePlus One, the Alcatel Onetouch Idol 3 or the Moto X Pure. And over time, you could save money with unlocked phones as they tend to be more affordable compared to traditional flagships (at full price).

MORE: Best Cheap Unlocked Smartphones

Who Are Carrier-Based Phones For?

If you’d prefer not to put up a lot of money up front for your phone, getting it from a carrier is the better option. Many carriers offer installment payments for phones or leasing programs that don’t require any money upfront. With unlocked phones, you usually have to pay the entire cost of the device at once. And if flagship phones from leading phone makers like Apple, Samsung and LG have the most appeal for you, you’ll find those at most of the major wireless carriers.

Flagship phones like the Apple iPhone 6s Plus (above) are available via payment plans at the major carriers. Photo: Jeremy Lips/Tom's GuideFlagship phones like the Apple iPhone 6s Plus (above) are available via payment plans at the major carriers. Photo: Jeremy Lips/Tom's Guide

Stage 1: Before purchase

a. Handset options and variety

You'll generally find a wider variety of options if you go the unlocked route. While the four major carriers — AT&T, Sprint, T-Mobile and Verizon — have a diverse selection of handsets, you won't find such popular devices as the OnePlus One or the Alcatel Onetouch Idol 3 on the Big Four. 

Verizon offers 32 smartphones, while AT&T says it has "more than 30 smartphones" that customers can buy. Sprint and T-Mobile have 25 and 36 devices available to customers on their websites, respectively.

In the unlocked market, the world is your oyster, and you can pick almost any smartphone that's available. However, not all unlocked phones support 4G LTE in the U.S., so be careful to look up the network/band compatibility.

b. Network/Band compatibility

The biggest and most common challenge you'll run into when getting an unlocked phone is figuring out if it will work with your carrier's cellular network. Because unlocked phones don't have to go through carrier certification, they're not guaranteed to work with the provider that ultimately provides your phone service.

"Unlocked phones do not necessarily have the bands and technologies to work optimally — or work at all — on each carrier's latest networks," said Avi Greengart, research director of consumer platforms and devices at Current Analysis.

Most unlocked phones will usually be able to access most 2G and 3G networks, but are less likely to support all American LTE bands. They may be compatible with some bands of spectrums, but very often they won't support the latest frequencies that your carriers have activated, meaning you might not be able to access the fastest connections available. For some phones, this can mean only getting 4G or HSPA+ instead of the faster LTE.

Carrier Frequency Cheat Sheet

Check this chart to see if your unlocked phone supports your carrier's bands before buying.Check this chart to see if your unlocked phone supports your carrier's bands before buying.

When you buy an unlocked phone, most likely at Amazon or through the phone maker’s website, you should look up the device’s specs to find the supported bands. Amazon makes this easier for you by showing the device's compatibility with each carrier; for phones such as the OnePlus One, you'll have to do your own homework. 

To find out what bands an unlocked phone supports, go to the device's specs or technical details page and look for the Network or Connectivity section. Supported GSM frequencies and LTE bands will be listed there. For example, the OnePlus One supports 1,2,4,5 and 8, as well as LTE bands 1, 3, 4, 7, 17, 38 and 40. That makes it compatible with AT&T (2, 4, 17) and T-Mobile (2, 4, 12), but not Sprint (25, 26, 41).

Buying a phone via your carrier will ensure that it operates on the necessary networks.

c. Picking a carrier or wireless service

Depending on the unlocked phone, you might have several options for service. In addition to larger carriers like AT&T and T-Mobile, you can also opt for budget providers like Boost Mobile, Cricket Wireless, MetroPCS and Republic Wireless. You can even pick a hybrid carrier such as TextNow Wireless or go SIM-free altogether and rely on a Wi-Fi-based service.

If you pick Sprint, take note. "Most carriers make using unlocked phones easy, but one doesn't," Greengart said. "AT&T, T-Mobile, and Verizon will all let you simply drop in a SIM card and you're good to go, but Sprint requires activation, which carries a fee and often requires a trip to a store."

The other major carriers make it simple by letting you just get a SIM card that you can drop into your unlocked phone. After you get a phone and a SIM card, you'll want to keep tabs on your monthly usage by installing your a widget or app from your carrier that monitors talk, text and data consumption.

Stage 2: After you buy

a. Ease of set up

If you don’t like the bother of getting your new phone up and running, going through a carrier may seem like the wiser choice. You can get assistance moving your SIM card over at the point of sale (unless you purchase your new phone online), and some carriers help you transfer your old phone's data over to your new phone.

If you buy your phone online, you may need to replace your phone's SIM card on your own. Credit: Suphaksorn Thongwongboot/ShutterstockIf you buy your phone online, you may need to replace your phone's SIM card on your own. Credit: Suphaksorn Thongwongboot/ShutterstockThese days, however, most phones make transferring your old data very easy. All you need to do is sign in with your Apple ID to port over most of your contacts, apps and saved pictures for iPhones, and log into your Google account on Android phones. You likely won't find it much of a hassle to switch data over from your old handset if you go the unlocked route.

You'll also spend less time deleting unwanted apps and skins off an unlocked phone.  Phones from carriers such as Verizon come with a host of mostly redundant apps, including a Google Maps-like VZ Navigator, Caller Name ID, Verizon Cloud Backup and games like Panda Pop, Cookie Jam and Sugar Smash. "Unlocked phones are often blessedly free of carrier crapware," Greengart said.

b. Monthly bills

The upfront cost of getting an unlocked phone is frequently higher than that on a carrier, since the equipment instalment plans carriers offer make it so you don't even have to fork over anything when you buy a phone. Instead, those hardware payments show up on your monthly bill.

But installment payment options are also appearing in the unlocked category, with Apple launching its iPhone Upgrade program that lets you get an unlocked iPhone from $32.41 a month. This program also lets you upgrade to a new phone every year.

ZTE also announced in late 2015 a lease-to-own financing program for its unlocked devices, letting you get the $400 Axon Pro for 23 monthly payments of $22.61. That adds up to $520, which adds a $120 premium ($5 per month) for the leasing fee. ZTE said the leasing fee varies from person to person.

MORE: A Guide to No Contract and Prepaid Phone Plans 

With other phone makers expected to jump on the equipment installment plan bandwagon — Samsung is reportedly close to following Apple’s lead with a phone upgrade program — the costs of buying an unlocked phone unlocked could soon be no different than buying through a carrier.

Overall, if you can afford to pay for an unlocked phone up front, it could work out to be the more cost-efficient method for you, as it keeps your subsequent monthly costs low. But if you prefer not to have to drop a bigger amount upfront or are happy to lease your device and return it for an upgrade phone after a year, carriers are your way to go.

Stage 3: A year in

a. Upgradability

When you've outgrown your current handset and have developed next-gen envy, an unlocked phone is typically easier to turn in for an upgrade. Because you're not tied to any payment plan or timeline, you can simply choose a new phone whenever you want. (These days, the major carriers offer early early-upgrade plans for subscribers who want the latest hardware.)

It’s worth noting that unlocked phones tend to fetch higher prices when it’s time to sell them. Compared to devices from carriers, unlocked phones are "often easier to resell at a higher valuation," Greengart said. According to device trade-in site Gazelle, the unlocked iPhone 5 fetches 15 percent more than the AT&T model, while the unlocked iPhone 5s gets 11 percent more than its AT&T counterpart. That could offset some of the upfront cost of upgrading to a new model.

However, some trade-in companies, such as iCracked, don't accept unlocked phones as they can't "accurately verify that the device wasn't fraudulently purchased or reported as lost/stolen."

Getting an upgrade through your carrier may be cheaper since all you have to do is turn your old handset in and keep paying your monthly device installments to get the new phone. Those who want to hold on to their device, though, will have to pay off the balance to keep it.

b. Device protection and insurance

After a year of taking your abuse, your phone may have finally called it quits and stopped working. Or you've dropped it one too many times and now your screen is busted.

Accidents happen, but there are a number of protection plans available from carriers. Credit: ymgerman/ShutterstockAccidents happen, but there are a number of protection plans available from carriers. Credit: ymgerman/ShutterstockWhen buying a phone through your carrier, you'll often get the option to add device insurance for a small monthly fee. AT&T charges $6.99 a month for its Mobile Insurance plan, Sprint's Total Equipment Protection starts at $9 a month, while T-Mobile's Premium Handset Protection is $8 a month. Verizon's most comprehensive offering, Total Mobile Protection, adds $11 to your monthly total.

These insurance programs offer protection against anything from lost, stolen or accidentally damaged phones as well as out-of-warranty malfunctions.

MORE: Cell Phone Insurance Plans Compared: What's Worth It?

Phone manufacturers also offer device protection programs. "Some vendors like Alcatel Onetouch, Huawei, and ZTE add impressive service and warranty support if you buy your phone unlocked directly through their web site," Greengart said. Alcatel offers a 12-month warranty on the Onetouch Idol 3 that allows for repairs or replacements for defective parts or devices.

But not all vendors offer this, and manufacturer insurance programs are not always as comprehensive as what carriers provide. Plus, cell phone carriers offer tech support to help you troubleshoot your device if you run into a problem, though some are better at support than others

Bottom Line

The most important difference between getting your phone unlocked and through a carrier is you’ll need to determine whether or not the device you're getting will work on your network. You'll also likely have a wider selection of handsets on the unlocked route, and you could save more money over the long term than if you’d simply bought a traditional flagship phone through a carrier.

Those who need more assurance and convenience would be better served buying their phones through carriers, who offer more comprehensive tech support, equipment payment options and generally can guarantee that the phones they are selling you will work on their networks.

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