written by: Aaron R.•edited by: Bill Fulks•updated: 8/5/2011
It's always useful to learn a new term. A subsidy password is a tool used by mobile phone providers to lock a phone down onto a particular network. This is why it's necessary to unlock a phone if you want to use it on another network.
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A subsidy password is a code that is used to unlock a cell phone that is already locked onto one particular network. This is why you have to go through a few extra steps to unlock a cell phone if you wish to use it with another carrier.
The term comes from the word subsidized. The principle is actually pretty simple and basic economics. The cell phone providers give the buyer a fairly good deal on the phone when they buy it alongside a contract for their network. They lose potential profit on the phone itself for the long term profit of the cell phone contract. In order to keep the phone restricted, a subsidy code is used.
To remove the subsidy code, you will need to use a subsidy password to unlock the phone for use with another network.
Most people learn about subsidy passwords when they try to put their old SIM card into a new phone. A number of providers automatically pull up a message requesting the subsidy password (and naturally a number of people run off to Google "what is a subsidy password?").
I don't really wish to get into the fairly complicated process of actually unlocking a phone. The worst part is that there isn't one real technique. It's usually a little different for each phone. If you're a legitimate customer of the company and can confirm that the phone is in your possession, then you should be able to call customer support and have the cell phone unlocked. Apparently some people have had luck with calling tech support and then telling them that they plan to leave the country and need the phone unlocked. Sometimes just telling the truth works.
If all else fails, there are plenty of articles on Brighthub that tell you how to unlock a cell phone. Note that we have many guides available for specific brands of phones. The one I linked is pretty good for understanding the concept of unlocking a phone though and should give you a good idea of how to get a good start.
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Subsidy Passwords - A Legal Roundup
Note that it doesn't seem to be truly illegal to unlock a cell phone. At worst, you're breaking an agreement and risk someone bricking the phone. There was a very similar case in 2004, in which Lexmark tried to sue a software provider that offered a way to disable a built-in locking code in their printers that only allowed the loading of their official brand of toner. You can read more about it in the Ars-Technica review of the case here (which isn't really objective but offers a lot of quotes and history).
If you don't want to handle the legalese, the short story is that buying a product in which you are able access the software or locking mechanism naturally allows you to legally access and alter it. You can work on your own product. As mentioned, if you violate a contract then you could still find that your phone is now a very attractive and slim brick.