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If you are traveling abroad and buy a prepaid SIM card to use in that country in your phone, what kind of vulnerability are you exposing yourself to? Can a malicious SIM access information on my phone? Can it MITM all my interactions with the cell network?

Practically speaking, is it risky to buy a SIM at a normal store in Western Europe? Even if a SIM could be malicious, it would have to be manufactured as such, or counterfeit. Does that seem likely?

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Possibly related: Can a SIM card propagate malware?

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As you probably know, a SIM card is a fully functional computer in itself, which communicates with the phone (or other devices) over predefined commands.

The first big problem that is practically a big "yes": Phone and card firmware/OS are mostly not opensource, but it's safe to assume that all they have (not publicly known) security bugs, that enable one device to do more than it should on the other side.

So, phones, can infect sims, and sims can infect phones; either to control more, or to spread. Malware on phones can come eg. from apps, pre-installed in the factory (more often than you might imagine) either by government or "normal" criminals, and so on. But on the sim card?
"Good" sims often have very limited resources (memory and so on). But as described later, that doesn't matter much, because the program on the sim is very well able to request instructions from any remote location - it doesn't need to contain the full malware. About sims specifically made with malware, well ... what it can do described later.

About the risk is western Europe:
If you're worried about government level, well ... you can't trust anything. If "small" criminals are the problem: Avoid prepaid card packages that are sometimes sold in supermarkets. To start with, it's easy to go there and switch the good package in the shelve with something else. Shops by the provider itself should be ok - not only there's no public access to anything, but they sometimes even write the software and configuration on an empty card directly if you buy it (so no chance to mess with stored cards).

And now about what modern sims are capable of ... disregarding old ones (the phone-sim interface evolves over time), and assuming there are no security bugs, there's still plenty a card is allowed by the standard. This includes eg. (but is not limited to):

  • Sending and receiving arbitrary internet data (UMTS/HSPA/...), messages (sms, mms, push messages), phone calls, infrared and/or bluetooth data from/to arbitary remote peers
  • Querying informations about the connected cell network, and instructing the phone to switch to something else
  • Querying GPS information (and of course, doing arbitary things with it, eg. logging, sending to a remote server, ...)
  • Sending arbitary lowlevel control commands to the availabe modems in the phone
  • Displaying text and/or images on the screen, playing sounds, and/or adding commands to the phones menu
  • Instructing the phone to open websites in its browser

Meaning, yes, even without security bugs, MITM and many other things are possible.

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