low cost telephones may cost you around 125 USD including a credit of 50 USD in prepaid calls.
The leading network is TMN. There are shops and agents everywhere. With a simple debit card you may reload your balance of prepaid calls at any ATM.

These low cost telephones usually work only in the original network (network locked). If you want to convert it in telephone which can be used with subscription of any GSM operator, usually you have to pay an extra amount of money to remove the lock.

Alternative is to rent one. But I wouldn't bother to rent one in before coming unless you want to know the telephone number in advance.

I've been checking and the cheaper telephones are in the range of 70 USD with 25 USD of prepaid calls included.

Pedro---thank you for your help-- what are names of the rental companies that you were checking-- i assume i can just rent one either at the airport or in Lisbon and then use it throughout the country-- you help is appreciated

Sorry, I didn't make myself clear.

I didn't refer to rental companies, I meant that with those prices (around 70 to 100 USD) you may prefer to purchase one telephone instead of renting one.

The only problem is that you won't know the telephone number in advance and I don't know if this is a problem for you.

Chack this site: www.tmn.pt
This is a Portuguese version only, but if you look for the word "produtos", than "recarregaveis", than "mimo", you'll have the range of products available. The cheaper I've seen was "mimo gummy" (69.90 USD).

These products are sold in any shopping center or even in shops along the streets. Bear in mind that Portugal has above 80% of its popullation owning a celular phone, which means that this is a big business and the delivery circuits are working well.

If you look for the phrase "pontos de venda" in the same site, you may see all the points of sale and as you can see, there's a lot of them.

If you prefer to rent one telephone, it's ok, but I doubt that it is cheaper than purchasing one.

Pedro, we're spending most of October in Portugal, and I just bought an unlocked GSM phone on eBay. About how much is a SIM card in Portugal? Thanks in advance for the help.

Hi Aloha
I was Pedro and now Lobo Mau (Portuguese for Big Bad Wolf) and neither is my real name
There are 3 GSM companies in Portugal, TMN, Vodafone and Optimus. TMN is the leading operator and I strongly advise you to chose them (http://www.tmn.pt)
A SIM card costs 25E with 15E credit. There are several price plans for prepaid, I recommend you the Passaporte (passport) aimed for occasional users. The costs per minute are as follows: intl calls .34E, national TMN/TMN .21E, national TMN/other .46E. Text messages (SMS) .15E to other TMN numbers and .22 otherwise.
Now the bad news, the SIM expires after 90 days withou use, and you might be unable to use it in another visit.
For residencial users with a debit card, recharging is a piece of cake, one may go to any ATM and recharge it in 30 seconds. I don't think this option is valid for credit card operations in ATMs (I'll check for you), the alternative is to go to any TMN shop or agent and ask them to recharge it.
I live and work in central Lisbon, make sure you reserve 10 minutes for a drink, my email is lobo.mau@netcabo.pt, my telephone number I don't post here, but I'll be glad to give it to you by email.

Thanks for the advice - I'll e-mail you soon, and we look forward to meeting you in Lisboa, at the end of the trip.

hi, topping for updated information about getting a prepaid mobile phone in portugal. i'm leaving for lisbon this friday evening -- wanted to replace my current mobile with a quad band phone but didn't quite get around to it. am wondering whether to buy a phone in the airport, or wait until getting downtown...may need to place one long call to usa (for work, ugh!) while on vacation so figure having it likely to be handy. will be in lisbon and alentejo area -- is tmn the best network in this area? thanks!

Dear gwp
Are you sure you want a Quad phone? These phones are expensive and unless you travel extensively I don't think you need.
As far as Europe (and most of the world) is concerned, a dual band or a quad band are exactly the same thing, since only the frequencies 900 and 1800 MHz are used.
As a reference, please visit www.uzo.pt. UZO is to cellular the same as lowcost companies are to flight industry. This is a Portuguese language site, but you have only to click on "produtos", then on the names of the brands (Alcatel, Motorola, Nokia, Samsung). Clicking on the picture of the telephone, you'll have the features of the phones.
I'm not encouraging you to buy online, but to get yourself acquainted with the models. I's say that a decent telephone (dualband) would cost you no more then 40 euros, including SIM card and airtime. Tribands and Quadbands would cost you some more. The cost per minute is 16 cents to Portugal, 42 cents to USA. All incoming calls free.
From your post it's not clear how long you stay in Lisbon. I advise you to go to a shop not belonging to TMN/Vodafone/Optimus chains. There is one of these shops in Imaviz shopping centre (metro station Picoas) and another in Alvalade shopping (metro station Alvalade). They offer everything from 2nd hand 20 euros phones to upscale 300 or 400 euros phones. They have an advantage over the brand shops, they don't need to make up your mind to select one particular SIM. They just show you all the SIMs and tariffs, and you chose whatever fits your needs.
UZO produts may be purchased in this kind of shops, and in gas stations and post offices. This latter feature is very interesting, because even in a small town in Alentejo, you may reload the phone in the local post office.
If you want a local contact, please email me and and send my phone number in return.
I felt this post to be caothic. If you have more specific qustions, post here, or then email j1962@netcabo.pt

gwp. When we were in Portugal, we went into one of the all brand stores as lobo_mau suggests.

They were very nice, had all kinds of phones available. They sold us a SIM card that would give us the best price per minute for calls to the US. We never used it for calls within Portugal.

We really didn't find the kiosk in the airport very helpful.

We did recently want to upgrade our phone and decided to go with a quad band. The main reason is that we want to have mobile service in the Caribbean and the dual band we use in Europe did not have the 850MGZ band we would need.

Have a wonderful trip.

Lobo Mau and Sher, thanks for your advice. I was planning to buy an inexpensive 900/1800 dual band phone, as Lobo Mau suggests (never mind the quad band phone discussion), so I will plan to check out the shop in the Imaviz shopping ctr, which seems close to where I'm staying (got a really fantastic rate at the Real Palacio). I'm arriving Lisbon Sat morning and have the weekend in town before joining a group for a cycling trip in the Alentejo on Monday...have never been to Portugal (missed it on my post-grad backpacking tour b/c of a Portugese train strike!) and have been swamped recently, so am planning to cross reference my guidebook w/ some of the awesome Portugal threads on this site and work on my weekend Lisbon itinerary on the plane! Yikes! Wish me luck! Fado suggestions appreciated though I think I saw some in the stuff that I've printed out. --Grace

Lobo Mau, thanks for the advice you gave everyone about cell phones. I'll be in Portugal three weeks this summer and wondered if I should get a disposable cell. Now I know I should! Looks like I'll be looking for TMN store when I get off the plane is Lisbon.
Thanks!
SJ