An iPhone among friends...

A friend just offered to buy my Black, 32 GB iPhone 4 (not S). He needs the extra space to upgrade from his 16GB iPhone 4 (also not S), and I need the extra space in a 64GB iPhone 5...
Anyway, is there anything we need to do, beyond wiping our iPhones and moving the SIM cards (I keep mine, he moves his to the 32 I'm selling him, etc.)? Will iTunes handle the transfer of my phone to him when he syncs "my" phone with "his" SIM?
He's planning to give his Mom his old 16, so I suppose he'll need to get a SIM from ATT, or whomever...
Also, I believe he has about 5 months left on contract. I don't imagine ATT would care if he swapped devices, so long as he didn't try to buy it from them, would they?
Thanks a bunch!

When an iPhone is no longer activated with cellular service, logging out of iMessage on the iPhone makes no difference since iMessage cannot be used on an iPhone that is not activate with cellular service.
How long have you had this number?
You can contact your carrier to ask how long your phone number was out of circulation or not available to be reassigned to someone else, and you can try calling AppleCare or make an appointment at an Apple Store if there is one nearby to determine if there is something they can do to resolve it.

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