How to use an AT&T iPhone on T-Mobile's no-contract network

The shakeup is good for everyone, but if you own an AT&T iPhone and are ready to switch carriers, T-Mo's new bargain plans are looking you straight in the eye.

A $50 no-contract plan sounds too good to be true, but the company's formula is simple: instead of subsidizing a phone upfront and shifting the cost to the monthly fee, new customers will pay the full -- or in some cases, slightly discounted -- price of the phone and enjoy a lower monthly.

But if you already have an AT&T iPhone and you aren't locked into a contract, you can easily use that phone on T-Mobile's network. The process is simple, but requires a little setup, and for some, sacrifice.

Step 1: Read the fine print
Before you jump for joy, beware that using an AT&T iPhone on T-Mobile isn't always a positive experience. Yes, AT&T and T-Mo both use GSM (SIM cards), making them a good match, but a problem lies in the network.

Different networks run on different bands (like frequencies). While T-Mobile's 3G and HSPA+ networks currently run on the AWS 1700 bands, it's now moving those services to the 1900 spectrum band (which the current iPhone 5 uses). This T-Mobile site can tell you more, but you'll have to contact T-Mobile to find out if the network has been updated in your area.

If you find out that your area is not supported and you aren't in one of T-Mobile's new LTE cities (see below), you can still use your iPhone on T-Mobile's network to make calls and send messages, but it will run slower data speeds than you'd find on AT&T. In fact, those speeds may be so agonizingly slow that you might be willing to continue paying AT&T's premium until T-Mobile's network transition and LTE rollout gains more steam.

What about LTE and HSPA+? T-Mobile also said this week that it is launching its own 4G LTE network in seven cities. A current iPhone 5 will be able to use that network, but HSPA+ data speeds will top out at 21Mbps rather than 42Mbps.

Step 2: Unlock your iPhone
Once you get past the fine print, it's time to unlock your iPhone. (Without an unlock, an AT&T iPhone will reject a T-Mobile SIM card.)

According to this help article, AT&T will unlock iPhones for eligible customers in good standing. Meaning:

• You own the phone, or can identify the person who owned it.
• The phone hasn't been reported as lost or stolen.
• You are no longer tied to a contract (either because of expiry, or you've paid the early-termination fee to cancel it).
• Your account is in good standing, and you have no unpaid balances.

Finally, AT&T will grant no more than five unlocks per customer.

If you meet these requirements, you're eligible to request a phone unlock. Before you do, though, be sure to back up your iPhone in iTunes -- your phone will be completely erased during the unlocking process.

When the backup is complete, fill out this form to request the unlock.

Once you've been approved by AT&T, you'll be asked to sit tight during a "wait period" of up to seven days. In many cases, this wait period will be much shorter, but if you'd rather not take the chance, you can instead call AT&T directly and speak to a representative who may grant an unlock immediately.

If you're still subscribed to AT&T, do not cancel your contract yet, as you'll lose your phone number. Instead, wait until the very end, when your phone is up an running on T-Mobile (more on that in a bit).

Step 3: Visit T-Mobile and complete the setup
During the wait period, visit T-Mobile (online or in person) to sign up for a monthly, no-contract service plan. At this time, you'll need to request a SIM card for your iPhone. If you're still an AT&T subscriber, you'll also want to ask T-Mobile to transfer your AT&T phone number to the new SIM card.

For reference, the iPhone 5 uses a nano-SIM, iPhone 4/4S uses a micro-SIM, and all earlier models use a regular SIM card.

If the waiting period is over and you have your T-Mobile SIM card in-hand, you'll need to complete the unlocking process. Depending on how you approached the unlock (on the phone or through the Web), you'll be provided with the instructions to complete the process.

Once the unlock is complete, use iTunes to restore your iPhone from backup. At this point, you can cancel your AT&T service plan.

Step 4: Tweak a couple iPhone settings
The one side effect of switching carriers is that a little extra setup is required to get the Web and MMS (picture messaging) functioning again. Follow this help article on T-Mobile's site to restore these features.