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AT&T: pay-as-you-go iPhones will be locked

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AT&T has revealed that non-contract, unsubsidised 3G iPhones will be tied to the network, dashing hopes that PAYG models might be more portable than the cheaper, subsidised versions of the handset.

According to an Associated Press report, an AT&T spokesman confirmed yesterday that contract-free iPhones will remain locked and only work on AT&T's network.

That will leave buyers keen to use the handset on other networks once again waiting for Italian hacker Zibri to update his popular ZiPhone unlocking tool for both iPhone 2.0 and the anticipated iTunes update - version 7.7 - that Apple will push with the new handset.

According to Zibri, unlocking iPhone 2.0 will require a baseband downgrade. His advice: don't dash to upgrade an exiting iPhone or buy a new one until the status of unlocking tools like ZiPhone are more clear. We'd echo that sentiment.

AT&T is the only US carrier selling the iPhone. But in territories, such as Australia and Italy, where Apple's selling through multiple carriers, there remains the possibility that iPhones sold there may not be locked to a specific network.

It's claimed that iPhone sellers will insist on signing buyers up to contracts before they hand over a subsidised iPhone - though that's no great surprise. Many would-be unlockers are awaiting pay-as-you-go iPhones as a way around this, albeit at the cost of a higher handset price.

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