A mobile phone allows calls into the public switched telephone system over a radio link. Early mobile phones were usually bulky and permanently installed in vehicles, they provided limited service because only a few frequencies were available for a geographic area. Modern cellular cell phones or hand phones make use of the cellular network concept, where frequencies are used repeatedly within a city area, allowing many more users to share access to the radio bandwidth. A mobile phone allows calls to be placed over a wide geographic area, generally the user is a subscriber to the phone service and does not own the base station. By contrast, a cordless telephone is used only within the range of a single, private base station.

A mobile phone can make and receive telephone calls to and from the public telephone network which includes other mobiles and fixed line phones across the world. It does this by connecting to a cellular network provided by a mobile network operator. In addition to telephony, modern mobile phones also support a wide variety of other services such as text messaging, MMS, email, Internet access, short range wireless communications (infrared, Bluetooth), business applications, gaming and photography. Mobile phones that offer these more general computing capabilities are referred to as smartphones.

The first commercially automated cellular network (1G) was launched in Japan by NTT in 1979, initially in the metropolitan area of Tokyo. Within five years, the NTT network had been expanded to cover the whole population of Japan and became the first nationwide 1G network. In 1981, this was followed by the simultaneous launch of the Nordic Mobile Telephone (NMT) system in Denmark, Finland, Norway and Sweden. NMT was the first mobile phone network featuring international roaming. The first 1G network launched in the USA was Chicago based Ameritech in 1983 using the Motorola DynaTAC mobile phone. Several countries then followed in the 1980s including the UK, Mexico and Canada. The first modern network technology on digital 2G cellular technology was launched by Radiolinja in 1991 in Finland on the GSM standard, which also marked the introduction of competition in mobile telecoms when Radiolinja challenged incumbent Telecom Finland who ran a 1G NMT network.

Low end mobile phones are often referred to as feature phones, and offer basic telephony, as well as functions such as playing music and taking photos, and sometimes simple applications based on generic managed platforms such as Java ME or BREW. Handsets with more advanced computing ability through the use of native software applications became known as smartphones. The first smartphone was the Nokia 9000 Communicator in 1996 which added PDA functionality to the basic mobile phone at the time. As miniaturization and increased processing power of microchips has enabled ever more features to be added to phones, the concept of the smartphone has evolved, and what was a high end smartphone five years ago, is a standard phone today.

Other features that may be found on mobile phones include GPS navigation, music (MP3) and video (MP4) playback, RDS radio receiver, alarms, memo recording, personal digital assistant functions, ability to watch streaming video, video download, video calling, built in cameras and camcorders with autofocus and flash, ringtones, games, PTT, memory card reader (SD), USB (2.0), dual line support, infrared, Bluetooth (2.0) and WiFi connectivity, instant messaging, Internet email and browsing and serving as a wireless modem. Nokia and the University of Cambridge demonstrated a bendable cell phone called the Morph. Some phones can make mobile payments via direct mobile billing schemes or through contact less payments if the phone and point of sale support Near Field Communication (NFC). Some of the largest mobile phone manufacturers and network providers along with many retail merchants support, or plan to support, contact less payments through NFC equipped mobile phones.

GSM mobile phones require a small microchip called a Subscriber Identity Module or SIM Card, to function. The SIM card is approximately the size of a small postage stamp and is usually placed underneath the battery in the rear of the unit. The SIM securely stores the service-subscriber key (IMSI) used to identify a subscriber on mobile telephony devices. The SIM card allows users to change phones by simply removing the SIM card from one mobile phone and inserting it into another mobile phone or broadband telephony device. A SIM card contains its unique serial number, internationally unique number of the mobile user (IMSI), security authentication and ciphering information, temporary information related to the local network, a list of the services the user has access to and two passwords.