Jail Breaking
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Let's start with the first step in the process, jailbreaking your iPhone. Jailbreaking allows you to install any compatible software onto your phone, whether or not it has been reviewed by Apple, and is required before you can unlock your iPhone to run on a cell service other than AT&T.
I've found several guides around the web that will walk you through the process for your specific device. Follow the appropriate guide exactly, after you have read it thoroughly and understand every step of the process. It's very easy to miss something and end up at a step where nothing works like it's supposed to.
Note: I have not tried these tutorials, but all have been used successfully by others. I have picked them because they seem like good instruction sets. If you decide to jailbreak/unlock your phone, do not hold me responsible if you end up with an out-of-warranty broken phone. It's a possibility. You've been warned.
Current iPhone and iOS Versions
• iPhone 4 with iOS 4.0 & 4.0.1 — Jailbreaking an iPhone 4 is not yet something the public can do, but instructions and downloads will be posted here when available.
• iPhone 3G and previously jailbroken 3GS with iOS 4.0 and 4.0.1
Older iPhone and iPhone OS Versions
• iPhone 3GS with iPhone OS 3.1.3
• iPhone 2G, 3G and 3GS with iPhone OS 3.1.2
• iPhone 3GS with iPhone OS 3.1 — Windows only
• iPhone 3G with iPhone OS 3.0
• iPhone 2G with iPhone OS 3.0
• iPhone 2G with iPhone OS 2.1
After successfully jailbreaking your iPhone, you'll see a new app on your home screen called Cydia. Think of Cydia as the unofficial App Store. For instructions on how to use it, as well as a walkthrough of some its features, read How to Use Cydia: A Walkthrough.
Unlocking
When you purchase an iPhone in the U.S., it is "locked" to AT&T's network, preventing you from using it with another compatible carrier like T-Mobile despite the fact that it will function perfectly (with the exception of visual voicemail) on the competing service. But in other countries, like France, consumers have been able to purchase unlocked iPhones for several years. So why lock phones in the U.S.? Profit, pure and simple. If AT&T is the only network the iPhone will function on, then they're the only network that can make any money from it.
AT&T would argue that they subsidize the purchase of the phone, and so should be entitled to your business until that subsidy has been repaid. But what about after your 2-year contract ends or if you paid full price for your iPhone? You might've thought you were free to switch to another provider, but Apple has argued in court that doing so without their permission constitutes copyright infringement. So your only choice was to keep your service with AT&T, implying you actually have a de-facto lifetime contract with them without ever agreeing to one, or buy a new phone. Fortunately, this particular anti-competitive practice is now a thing of the past.
Unfortunately, while the iPhone Dev Team, a group of hackers unaffiliated with Apple, has successfully demonstrated a carrier unlock on the newly released iPhone 4, it's not yet something you can get your hands on. Only the iPhone 3G and older 3GS phones can be unlocked today. But if you've got one of those phones, after jailbreaking, unlocking is fairly easy. You'll need to install a program called ultrasn0w through the Cydia app. Here's a step-by-step with pictures that will walk you through the process.
For updates on when ultrasn0w will be available for the iPhone 4 and newer iPhone 3GS phones, follow @ultrasn0w or @iphone_dev on Twitter, or check this blog post.
Switching SIM Cards
Once you've unlocked your iPhone, you should be able to use any valid GSM SIM card to get service. A SIM card, or Subscriber Identity Module, is a removable card used by the various cellular networks to identify and authenticate your phone. They come in three sizes (largest is the size of credit card, smallest is actually called a "micro-SIM"). The idea is, as long as your new phone uses the same size as the old one, you can simply move your SIM card from one phone to the other to transfer your service.
You can purchase SIM cards by themselves, either prepaid or as part of a monthly plan. Here's a list of GSM providers in the U.S., the biggest of which are AT&T, T-Mobile, and TracFone Wireless. You should be able to obtain a new SIM card and cell service from any of them. Most likely, you'll want to transfer your existing phone number to the new SIM card as well, so your best bet is to do this in person at a store after you've unlocked your phone.
To replace the SIM card in your phone, follow these instructions from Apple to remove your old SIM card with a paper clip, then just pop in the new one, turn your phone on and voila! You can now make and receive calls on your unlocked iPhone through whichever GSM network you prefer.
Note: The iPhone is only capable of operating on GSM radio frequencies. This means that the iPhone wont work on a competing CDMA network like Sprint or Verizon without replacing the radio hardware inside the phone, something that can not be done at home.
Questions?
Of course, you might have questions — this is a fairly complicated process and may or may not be possible on your iPhone depending on its model, operating system, and baseband version — so i'll be watching questions posted in the comments and will try to answer as many as I can. And if you have any success with one of the above methods, I'd like to know that too.
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