To understand what a GSM unlocked phone is, and what it does, you must first understand what GSM technology is, and how it works.
What is GSM technology?
GSM (Global System for Mobile) is a special kind of phone technology. It works by attaching account information (like your phone number, plan details, contact list, and more) to a SIM card.
Then, you put that SIM card into a compatible device, and you can use the device to make calls, send text messages, and download apps. If the phone you're using is not the right kind of phone, it will not be able to access the information (phone number, plan details, contact list, and more) that is on the SIM card.
Locked vs unlocked phones
Sometimes, companies that sell phones only want you to use the phone with their SIM cards. So they will LOCK the phone. For example, if you buy a phone that is locked to the T-Mobile network, you will not be able to use it with a Red Pocket Mobile SIM card. You can only use it with a T-Mobile SIM card.
However, if you buy a phone that is UNLOCKED, you can use it with any SIM card, including Red Pocket Mobile's SIM cards. Buying a phone directly from the company that makes the phones (called the phone manufacturer), instead of buying it from a service provider, is one way to get an UNLOCKED device. For example, if you pay full price for an iPhone directly from the Apple store, instead of buying it from a service provider like AT&T, you will get it UNLOCKED.
But, you can also get UNLOCKED phones from retailers like Amazon or eBay, or even physical stores like Fry's Electronics and Best Buy. Make sure when you read the product description that "GSM Unlocked" is specified.