Possible to unlock iPhone 4 and 4s, then use a prepaid SIM, for living abroad?

I have been round and round with this. My wife has a Verizon iPhone 4, i have the 4S. We would like to know if they can be unlocked and used as smartphones (not for calls - we'd use skype or google voice for that) in Indonesia while we're living there for the next 3-4 years. I have been told "no", but I don't understand why. There's 3G coverage in our location. Both of our devices have removable micro-SIM cards. We used them with Wi-Fi while there last week. Can't we just purchase a pre-paid sim and use our phones over there? Any help appreciated.

Yes, you are half right based on your description. Verizon uses a US specific CDMA signal. Most of the world uses GSM signals. The half right part is that the 4s was the first iPhone built with dual bands e.g. Both radio antennas built inside. Double check the build stats but the 2010 4 was the first 4 built for anyone outside of ATT. Being Verizon it's probably a CDMA only built phone and likely will not work in Indonesia unless they have a CDMA network there.
So, yes. You need to get them unlocked for use on another carrier so that you can use there. See the chart as it states the 4 was in fact a GSM. So verify that and get them undone. Best luck.

http://ipod.about.com/od/decidingwhichipodtobuy/a/iphone_chart.htm

Thanks for that answer. I have discovered that, yes, the 4s was the first by verizon to be "global". And I also misspoke - my wife's iPhone 4 does NOT have a SIM card. So it looks like we're in the market for an unlocked, used 4s for her.