SIM-free describes a handset that is not tied to one carrier and accepts any operator's SIM card. It is also called SIM-lock-free. With a SIM-free handset you can simply insert a Docomo, au, or SoftBank SIM and start using it, and switching to an MVNO (budget carrier) takes no extra work.
For many years Japanese carriers applied "SIM locks" to the handsets they sold so that only their own SIM cards would work, which discouraged switching and kept customers in place. The Ministry of Internal Affairs and Communications issued its SIM unlocking guideline in June 2010, and the December 2014 revision made carriers obliged to unlock a handset when the user asks. The August 2021 revision of the guideline on ensuring smooth distribution and use of mobile terminal equipment went further and banned SIM locks in principle: handsets released on or after 1 October 2021 may not be locked unless the carrier has a legitimate reason.
As a result, almost every carrier-sold handset released from October 2021 onward is SIM-free out of the box. Unlocked handsets bought from the Apple Store or Google Store, such as iPhone and Pixel models, have long been available as well. Older handsets may still need an unlocking request at a carrier store or through the online account page. The practical benefits of being SIM-free are freedom to pick a carrier, cheap connectivity abroad with a local SIM, and easier reuse of second-hand handsets.
Two pitfalls remain. The first is radio frequency bands: a SIM-free handset still cannot connect if its bands do not match the carrier's, and missing bands mean coverage in fewer places. Handsets sold overseas often lack some of the bands Japanese carriers rely on. The second is the network usage restriction placed on second-hand handsets - if the previous owner has not finished paying for the device, that handset can be barred from the network. Entering the 15-digit IMEI on a carrier's checking page shows the current restriction status. Confirm both points before you carry your number over with MNP.