Many of you are still in the woods about this whole unlock thing.
The lock we are talking about here is called a "subsidy lock". As we all know it's a method of keeping that phone to only operate with the carrier's network.
There are two network modes being used in the States. One is GSM, which consists of AT&T and T-Mobile. The other is CDMA, which consists of Verizon and Sprint.
The difference here is that how the phones operate and behave on each network.
A GSM phone identifies the subscriber (YOU) via the little chip called a SIM (Subscriber Identification Module). While the CDMA device uses a BURNT-IN, READ-ONLY ESN (Electronic Serial Number) to identify both the device AND the subscriber.
In certain parts of the world certain CDMA carriers DOES use removable subscriber ID modules, but they are not called SIM, instead they are called R-UIM (Removable User Identification Module). It behaves just like a SIM card on GSM phone but THEY ARE NOT INTERCHANGEABLE. i.e. you can't use a SIM card on a CDMA phone and vice versa.
Don't get confused with having a SIM card inside a CDMA devices that supports LTE. Keep in mind that LTE is a GSM extension. In order to have your device operate on a LTE network, you HAVE to use the SIM card. For CDMA/LTE hybrid device the sole and only purpose of that SIM card is to operate on LTE network. While the voice and legacy data (EvDO/1xRTT) still relies on CDMA.
Here's the tricky part. To lower the cost and minimize the amount of model variants of the iPhone 5. Apple decided to cramp BOTH operation modes into the phone, and only kept the LTE radio different due to carrier differences.
In the States, CDMA devices uses the ESN method for the carrier to identify them on the network. There no such a thing as a subsidy lock on a CDMA device as the identification module is permanently fixed inside the phone. Unlike GSM counterpart phones all you have to do is take the SIM card with you. With CDMA devices you can't, at least in the States.
The reason being it's a pure business decision. Carriers, especially CDMA carriers simply don't want devices that were not designed for their network to operate on their network. Thus the ESN whitelist exist. Technically just like GSM devices, CDMA devices don't discriminate where and whom it works on, unless the carrier tells it so.
When people stated that it's unlocked, that means the phone has no subsidy lock on GSM part. CDMA is a different story all together.
