Is the T-Mobile iPhone Unlocked?
No. T-Mobile is offering the iPhone 4/4S/5 contract free, not unlocked. This means you must pay almost full price for an iPhone instead of agreeing to a two-year contract for a cheaper subsidized rate. The phone remains locked until you pay it off in monthly installments. For example, a contract free iPhone 5 from T-Mobile costs $99, plus 24 monthly payments of $20, which works out to $580. An unlocked iPhone 5 from AT&T costs $649. A 64GB iPhone 5 with two-year contract from AT&T is $400.
You will still need T-Mobile to unlock your phone, and will have to pay any remaining monthly installments if you want to move to a new carrier before the two-years are up. However, T-Mobile users can upgrade their device at any time by continuing their monthly payments, or by trading the device for "fair market credit".