To unlock an AT&T iPhone, subscribers must have completed their service contracts--most contracts last two years from the purchase of the phone--and their accounts must be in good standing, reports. Users who are in the middle of an iPhone service contract must pay an early termination fee to unlock the device.

An unlocked iPhone is ideal for users who are traveling overseas, because instead of paying for expensive service from AT&T, they can pop in a cheaper SIM card from a local GSM wireless carrier. Unlocked AT&T phones also work on T-Mobile's network, but data speeds are slower than 3G. AT&T's unlocked phones not work on Sprint or Verizon, due to their use of CDMA networks that don't rely on SIM cards.

Previously, AT&T refused to unlock subscribers' iPhones, though the company had no problem unlocking other phones. Jailbreaking was the only way to free the iPhone for use with other carriers.

AT&T didn't say why it had a change of heart, but both allow users to unlock their iPhones for international use, even while still in contract. Their only condition is that users' accounts must be in good standing for a short period of time.

AT&T's out-of-contract policy is less favorable, but it could still come in handy for users who've hung onto their older iPhones and don't want to pay a fortune for service abroad.