Verizon iPhone 5 Shipping with Unlocked SIM Slot, Will Work With AT&T/T-Mobile SIM Cards

Verizon Wireless customers that purchased or received their iPhone 5 pre-orders today discovered a nice surprise when activating their devices, as multiple reports have confirmed that the nanoSIM slot in the phone is fully unlocked and will read both AT&T and T-Mobile SIM cards, regardless of purchase under contract or an outright purchase in order to preserve unlimited data access.

For Verizon to release one of the most highly anticipated devices of the year with a fully open SIM slot with support for US GSM networks may mark the full effect of the open access rules its LTE network operates under. As Verizon’s LTE network requires LTE USIM cards in order to register compatible devices on the network, the latest generations of hardware can read both GSM and LTE SIM cards, since LTE is the evolution of the broader 3GPP network specification standard that gave rise to W-CDMA UMTS and HSPA .

To be clear, inserting either an AT&T or T-Mobile SIM card will grant access to their respective GSM networks only, access on LTE is limited to Verizon’s own network and select European and Asian networks due to the limitations of the LTE baseband hardware to support all of the LTE radio bands in use around the world.

Typically, Verizon also locks its GSM SIM slots to its partner network in Vodafone for use internationally and typically forces customers to wait 60 days before granting an unlock for international roaming use,  so for the carrier not to do this may also mean that it does not want to risk doing anything that may run afoul of the FCC in terms of access, even if it has the side effect of granting US customers access to AT&T and T-Mobile’s respective networks.

Since the SIMs are also not being locked out, in comparison to the US carrier SIM lockout found in the Verizon iPhone 4S and previous Android devices following the release of the Droid 3, which featured AT&T 3G support that was enabled with some firmware hacking, at the expense of CDMA access, this also means that you could take advantage of much cheaper flat-rate prepaid service from StraightTalk, Simple Mobile and T-Mobile in select areas, as T-Mobile is currently transitioning its 3G service to its 1900MHz band with a heavy focus on the East and West coasts for official iPhone support.

This new development may also drive those that do not want to wait for a factory unlocked iPhone 5 to buy a Verizon model, but it remains to be seen whether Verizon will allow  full retail iPhone 5 purchases without previously holding a Verizon Wireless account, as there are plenty of customers that are swallowing the steep retail cost of the phone (starting at $649) in order to keep unlimited data access. Whatever the case may be, this signals a new development for the carrier and one that may set a new precedent for network access going forward.

As of this writing, Sprint still refuses to issue an official statement on its version of the iPhone 5 and whether it will utilize the removable SIM for its nascent LTE network, as the carrier’s own hardware development has led to embedded, non-removable LTE and GSM SIMs in order to prevent owners from unlocking SIM slots and using the unlimited LTE service provided by the carrier on devices other than smartphones, such as aircards.