A SIM card has a couple of purposes. Most importantly, it is used to identify the phone contract you've signed up for, fulfilling your data, calls and texts plan.
A SIM plan also provides two numbers with overly complicated names -  the ICCID serial number, International Mobile Subscriber Identity number (IMSI) and the Mobile Subscriber Integrated Services Digital Network number (MSISDN), the later of which is the user's telephone number.
In other words, a SIM card identifies your phone number and the SIM plan that you've subscribed to. Read our full SIM card storage guide to find out more.