To cover the meanings of free/clear ESN or locked or unlocked you have to understand the basics. Cellular phones come in two variants of networks - GSM (those with SIM cards / chips) and CDMA (those with ESN numbers).
So what is a SIM card?
It stands for Subscriber Identity Module. You can read all about it at Wikipedia under the topic Subscriber Identity Module; or get the basics from this short article. In America, AT&T and T-Mobile are the main SIM card service providers while everywhere else in the world the almost all cellular service providers use SIM cards and are known as GSM networks. When you buy a cellular phone on Ebay that has a SIM card, or in other words is from one of these two above listed companies, then you do not have to worry about if the phone will work or not with your account. This is because these phones cannot be deactivated or locked up from use by their parent company as they have no information on them. Your account information can be readily applied to these phones by simply plugging in your accounts SIM card. However they will work for AT&T only or T-Mobile only until they are "Unlocked" . The proper terminology for this is SIM Unlocked meaning any SIM card can be used in the phone. Regularly if a phone is not unlocked, then it can only be used with its parent company. Therefore if you have AT&T you cannot buy and use a T-Mobile phone until it is unlocked. The same goes if you try to use your phone with an international SIM card it will not work unless it has been unlocked. Many phones on Ebay sell for more when they have already been unlocked because then people in other networks can use those phones as well. Unlocking particularly increases the price when a phone model is exclusively offered through one company - examples are the IPhone for AT&T and the many HTC phones (MyTouch, G1, etc) for T-Mobile.
So what is an ESN?
It stands for Electronic Serial Number. You can read all about it at Wikipedia under the topic Electronic Serial Number; or get the basics from this short article. In America, Sprint and Verizon are the main ESN card service providers and are known as CDMA networks. When you buy a cellular phone on Ebay that has an ESN, or in other words is from one of these two above listed companies, then you it is always important to make sure seller has listed free / clean / clear ESN. This is because these phones can be deactivated or locked up from use by their parent company. Once one of these phones has a bad ESN it cannot be used as a cellular phone anymore and can be used strictly for parts to repair phones with good ESN's, paper weights, or as a play toy for kids.* The way these phones get locked ESN's is because the ESN number is what attaches the phone to an account. This ESN number is within the motherboard of the phone and extremely hard to near impossible to alter. If a phone is flagged as lost, stolen, or has an overdue bill the parent company, one of the two listed above, will lock the ESN. This is to prevent use of a lost or stolen phone and as a penalty for an account with an overdue bill. I repeat: BAD ESN PHONES ARE USELESS AND CANNOT BE ACTIVATED.* The parent company will not inform you of the account owner due to privacy policies if there is an overdue bill or will ask you to turn in the phone to the local authorities in the case that it was lost or stolen. If a seller does not list the ESN status in the description for a CDMA phone then you should request it by asking them a question. You can always ask the seller a question about the ESN status, ask them for the ESN number, or even get the ESN number from pictures if the seller has taken them well enough. If you get a response through Ebay messaging saying that it is clear you will be okay. This is because this statement becomes a recorded statement from the seller that can be used against them in case it does turn out to be a bad or locked ESN. Before buying a phone on Ebay it is always important to make sure seller has listed free / clean / clear ESN - beware of the many scammers trying to do dishonest things. Once you have the ESN number you can call the phones parent service provider company’s Customer Service or Tele Sales hotline. You can ask them if the ESN is clear by providing it to them. In my experience, the representatives usually are not too interested in helping if they aren’t making a sale and will usually deny the information or transfer you out to another rep to waste your time. I use a trick by saying that I am trying to buy a phone from my friend but just wanted to make sure it has a clean and clear ESN since I would like to buy a contract if the phone is functional. They will help you then because they make commission for the sale of a contract. Once you get the information politely thank them for their time and tell them that you will call them back at a later date.
* What was that asterisk in the ESN topic section? Now you're paying attention, ;)
The only way a locked ESN phone can ever be used again is by flashing. What is this flashing thing anyway? Flashing is the process of loading phone company specific files to CDMA phones in order for them to be usable again on a new phone company. For example, converting a HTC Touch Pro locked under Sprint to Metro PCS. This is a difficult, unreliable, and expensive process. It still holds that a bad ESN phone can never be used for its proper parent company again. In order for you to use it you have to use Metro PCS - the only other CDMA company in the USA that accepts all rejected ESN's. Metro PCS, however is a within city range only cellular provider, and has not even reached most places for sale yet. On top of this flashed phones are hacked phones - after being flashed they may not work with data services, text may be disabled, etc, and are much more prone to freezing / jamming up / losing all of your data. This is aside from you having to change services. At the end of the day, Flashed and Bad ESN phones should be avoided at all costs.
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