A SIM lock, also known as a simlock, subsidy lock or network lock, is a component of GSM mobile phones installed by service providers. It restricts the phone to be used only within certain countries or with a specific carrier. Customers who sign a service contract often receive a substantial discount on their phone, and SIM locks prevent the customer from voiding the contract selling the phone for profit.
An unlocked cell phone is one that does not contain a subsidy lock. If a phone is sold unlocked, it does not contain this locking SIM card; the user must purchase and install their own before using the device.