iPhone firmware upgrades often provide new features from Apple, such as access to enhanced capabilities of Google Maps and the iTunes Wi-Fi Music Store, but if you have used hacker methods to jailbreak or SIM unlock your iPhone, these upgrades may actually cause it to become unusable. This is because Apple has designed its firmware to disable illegal hacks to its software. This problem has occurred for many iPhone owners who chose to jailbreak their phone in order to install unauthorized applications. The only way to restore the use of your iPhone's full functionality is usually to downgrade to the original version of iPhone firmware. This downgrade may seem like a hassle but it is worthwhile and relatively uncomplicated, though it is technically another form of hacking.
Connect your iPhone to your computer. Allow iTunes to launch on its own. If iTunes does not start on its own, open it manually by clicking on the desktop icon on your computer.
Hold down the "Power" and the "Home," the round button with the square on it, buttons at the same time until the phone turns off. This should take about 20 seconds. Wait until the screen goes completely dark.
Release the "Power" button and continue to hold down the "Home" button. Within about 10 seconds, iTunes should notify you that your iPhone has been recognized by the system with your iPhone appearing in the list of devices in the side menu panel.
Hold down the "Shift" and "Alt" buttons on your keyboard at the same time and press the "Restore" button in iTunes. Open the original firmware file by clicking on it, instructing iTunes to downgrade to this version.
Wait for the downgrade process to finish. You may receive an error message due to the fact that you have not allowed iTunes to complete the upgrade process as planned, but you can ignore it by pressing "OK." You should see a message on the iPhone's screen though, reading "Connect to iTunes" with a small yellow triangle next to it, which means the downgrade has been successful.
Turn off your iPhone and restart it before using it. This will confirm that your iPhone is working properly and will also notify AT&T to restore your original service to the phone.
You may need to switch to AT&T for phone and Internet service if your iPhone still does not work with another carrier's SIM card after you downgrade its firmware. Find further information on troubleshooting from the Apple website (see Resources below).