SIMLOCK/NETLOCK/SIBSIDY LOCK:
Mobile service providers offers free or discounted phones with plans, so phones are commonly locked to their network and cannot used with any other provider, as necessary to subsidize the cost of phones. A locked phone does not accept SIM card except the provider which it locked to. It's a phone software setting.
Unlocking is a method to break this restriction.
see more details at wikipedia
SIM lock - Wikipedia, the free encyclopedia



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