Free SIM cards!
Why are some SIM-cards FREE?
ARTICLE BY PROPRIATOR
This is a complicated question, and to understand the reason you will need to know a little about the history of the mobile phone industry in the days when Pay As You Go was only a pipe dream.
Some time ago the only 'legitimate' way to obtain a SIM-card was to buy a contract mobile phone from a mobile service provider (carrier) and the SIM card was supplied inextricably paired with the handset you purchased. These low-tech mobiles cost the service providers many hundreds of pounds and the only way the service provider could retail such expensive mobile phones was to subsidise that cost. Many high-street retailers sold Mobile phone kits for less than 30% of its true value.
The service provider network relied on their contract with the end user to provide profit, and in many cases no profit was expected unless the customer continued to use the mobile network after the contractual period ended. Many of you may remember how difficult it was to cancel those contracts.
Some enterprising people on the fringe of the mobile industry saw a business opportunity and bought the subsidised phones in bulk and exported them to other countries where they were able to sell the phones for there full market value and thereby make a huge profit. Because the SIM card and phone chargers were of no use in a foreign country they were removed from the Mobile phone pack before export and a new mobile industry called 'Pack-Splitting' was born.
The pack-splitters wasted no time in selling the SIM-cards to fringe dealers for distribution at a cost of around £15 and a further profit stream was made by the pack-splitters. The mobile service providers considered this practice a legal 'grey area' but at the same time they were quick to realise that by giving away SIM cards they could get new customers on their network for the cost a few pence instead of including a subsidised handset at the cost of several hundred pounds.
The great SIM card give away became a vibrant new business model.
