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What does PRL mean and do?

When you select "Update Profile", your device connects to sprints data network and makes a request to the OMADM (open mobile alliance device manager), which in turn pushes a provXML file to your phone with your MDN, MSID, username, primary and secondary HA ip addresses, HA password and AAA password. There are probably a handful of other values involving wimax and such but I don't know what they are.

This information is what your phone uses to authenticate itself on sprints network for voice and data. If any of these values were to be incorrect then you could have issues make/receiving calls and/or connecting to data.

"Update PRL" makes the same type of request to the OMADM, in this case though it sends your Preferred Roaming List. This is basically a list of tower Ids and capabilities. Carriers will often release new PRLs as towers get built/updated and roaming contracts with other carriers change. It saves them lots of money to be sure you are roaming on the cheapest tower since they have to pay the respective company for your airtime.

This was probably not the answer you were looking for but... I was bored and thought I would share since I didn't like what Google spat out.
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The easiest answer is that a PRL is a list of towers that your phone is authorized to connect to. When your phone picks up new towers with better signal it attempts to hop to that tower, but it can't use all of them due to your service provider.

Virgin Mobile uses only Sprint towers (and Clear for 4G). The PRL for VM phones will ONLY contain Sprint and Clear towers.

If you have Sprint service you pay extra so that you can use not only Sprint, but also other provider's towers... like T-Mobile and other carriers.

The PRL file will be different for Sprint vs. Virgin Mobile service due to those differences in authorized towers. It can also be used to give preferential treatment to business customers by allowing them to connect to towers that regular customers can't use.

It is also why all this talk of a PRL change makes little difference. If you are getting a better signal/speeds then it is because you are connecting to a different tower than you were previously, NOT because the tower you were using is all of the sudden faster.

Also, people will claim they can make a PRL that allows you to connect to other carrier's towers... that may be true, but that carrier will also report you to VM (by tracking your phone's ID in their system) and they will cut off your account permanently.
 
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