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I understand that a SIM card is essentially a self contained computer, on which an algorithm is run that will receive a RAND from a network operator, and use it compute temporary keys (CK and IK) using a permanent key (Ki). I understand that the Ki resides on the SIM, and cannot be extracted.

My question is, are the CK and IK sent from the SIM card to the mobile phone so that it may encrypt and decrypt the phone calls that it makes and receives? Or do the CK and IK only reside on the SIM card, and the mobile phone hardware sends the SIM card cellular traffic to be encrypted and decrypted?

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