In a move that brings Verizon in line with the rest of the wireless carrier industry, the company says they will start locking smartphones that it sells to consumers. By locking the devices, consumers will not be able to just pop in a SIM card from another carrier and have a working phone. The reason for the change according to Verizon is to combat theft of smartphones. Interestingly, Verizon notes the biggest source of stolen Verizon phones is stock lifted on its way to a Verizon retail store or criminals shoplifting devices from retail stores.
According to Tami Erwin, executive vice president of wireless operations for Verizon,
“We're taking steps to combat this theft and reduce fraud. These steps will make our phones exponentially less desirable to criminals.”
Although this will be a change for Verizon customers, the carrier indicates new devices will be unlocked almost immediately – though the specific time period is not specified – after purchase via a software update. Probably the highest risk buyers who could see an impact would be one who buys a phone and then immediately travels out of the country with plans to install a locally-sourced SIM card to avoid international roaming fees. People in those situations will now need to contact Verizon to unlock the device before switching the SIM card.
Compared to other major wireless carriers, Verizon's policy up to this change to sell unlocked devices was the exception rather than the norm. The other carriers – AT&T, Sprint and T-Mobile – all require minimum time on the service ranging from 40 to 60 days and that the devices be fully paid for before they will unlock them. T-Mobile does offer to temporarily unlock a device for owners planning travel out of the country.
source: CNET
In Canada our regulator just banned carriers from locking devices.