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Every GSM phone includes within it some form of SIM, in one of
two formats. These SIMs carry information about the subscriber,
including the phone number, address book, and recently dialed
numbers. This information is therefore easily transferred to
another handset, enabling GSM users to use any compatible handset
without network notification. This has led to several unique
characteristics of the GSM networks, with users changing handsets
regularly as new technology becomes available and even borrowing
handsets from each other when they can't use their own (due to low
battery or malfunction).
It is important, given this structure, to understand that it's
the SIM that is the user's identity, and it's the SIM that
represents the user's contract with the network provider. SIMs also
provide the security for GSM, both in providing keys for encrypting
voice communication, and in ensuring users cannot be copied
(cloned). While this security is far from perfect, it has certainly
proved a challenge to criminals used to being able to copy analog
phones with ease (though it has also provided those same criminals
with a convenient, secure medium for their own communications).
When looking at wireless applications, it is useful to consider
that identifying a user through a password or similar mechanism is
equivalent to asking the user to make use of a public terminal,
while communication with the SIM itself provides positive
identification and security.