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iPhone 5 on Verizon Prepaid.

unlocked and prepaid are different things. The SIM slot in the verizon phone allow you to take a SIM from any *GSM* carrier and use service. If the SIM were locked, you would only be able to use Verizon LTE SIMs.

However, while on the Verizon network they are free to set whatever (even stupid) policy they want and they don't want you to use an iPhone prepaid.

The same is true with AT&T--if they find out you are using an iPhone with a prepaid SIM, they will change your plan without telling you.

What you CAN do, however, is use the phone prepaid on T-Mobile, since they don't care what phone you have. Unfortunately, you'll only get EDGE (2G) service right now, though soon you'll have 3G. The Verizon phone is not compatible with the future T-mobile LTE network, though, so you're maxed at 3G.
 
But even that USA today article says you can even us it on Prepaid. I don't understand if I purchased a iPhone, why them limit what I can put it on.

Does T-Mobile, or StraightTalk have nano sims to use, cause thats an option.
 
Yes when Verizon unlocks the SIM card slot, it is for *GSM* only. You can't use a C-SIM (LTE) from another carrier like Sprint, or MetroPCS.

GSM SIM Cards = USIM for GSM/GPRS/EDGE/HSPA + LTE
CDMA SIM Cards = CSIM/R-UIM 1xRTT/CDMA2000 + LTE

Verizon SIM cards contain both C-SIM for usage in the US, and U-SIM for international roaming. When they unlock the device, it is unlocked for other U SIMs but not CSIMs.

Verizon prepaid phones do not have a SIM slot, nor would Verizon activate a SIM card for you to use on prepaid, and that's how they artificially block out the iPhone 5 (as well as other Verizon smartphones) from being used on prepaid.

AT&T you can still use it on prepaid (as its GSM) but they will still make you pay for a data plan to use it on prepaid.
 
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