How do SIM cards work?

The SIM is inside each handset and functions as its digital brain. The authentication and encryption capabilities of the SIM prevent your phone from being stolen and your calls from being eavesdropped on. The SIM's digital memory, which stores information like your rate plan, phone number and service features, also allows you to easily personalize your service and contains user ID and billing information that can be switched between different phones. So, with your SIM card installed, you can make or receive calls personally even when you're using a borrowed phone. Upgrading your phone is as simple as slipping your SIM card into your new phone.