Tiny SIM, massive connectivity: a new era for eSIMs

In the rapidly changing world of technology, connectivity has significantly evolved with the introduction of the Embedded Subscriber Identity Module, commonly known as the eSIM. These compact yet powerful elements have transformed considerably how users connect with networks and devices. However, currently, there exists a disparity between industry advancements in eSIM technology and consumer adoption of eSIM. Noteworthy progress is underway, evident in the widespread acceptance of the global standard specifications for consumer devices and the integration of eSIM in flagship phones and companion devices but we are only on the cusp of seeing its potential. Projections by GSMA suggest approximately 850 million eSIM smartphone connections globally by 2025, with anticipated growth to 6.7 billion by 2030. This would constitute 76% of the total number of smartphone connections. As device manufacturers finally catch up with the development of eSIM, let’s take a look at why this technology will be revolutionary for mobile providers.

The Silent Extinction of Traditional SIM Cards

The progress on eSIM advances is steadily paving the way to the phasing out of traditional cards. Apple, often seen as a major catalyst for eSIM adoption, removed the physical SIM card slot from its latest iPhones in the US in late 2022, forcing both customers and carriers to transition to eSIM technology. However, the first step to eSIM adoption for consumers was taken by Google. Its Pixel phones were the first to incorporate eSIMs in 2017. Moreover, at Mobile World Congress 2023, Google introduced its new eSIM transfer capabilities, making the switch more accessible than ever for Android phones and laying further groundwork to allow customers to convert/ migrate physical SIMs to eSIMs. Other manufacturers, from Samsung to Sony to Xiaomi, are following suit, expanding the list of eSIM-compatible phones.

Industry standards are also advancing. In December 2023, the GSMA launched a new version of the eSIM Technical Specification (SGP.22 V3.1) and Architecture Specification (SGP.21 V3.1), encompassing enhanced security measures, over-the-air provisioning, and standardised management guidelines for multiple profiles, among other improvements.

The benefits of eSIMs

This technology has numerous benefits including removing barriers to seamless connectivity and enhancing functionality. So, let’s take a closer look at the multiple advantages of having an eSIM:

• No supply chain issues - eSIMs are entirely digital and do not require physical handling. Telecom companies no longer need to worry about managing their SIM card inventories, dealing with physical delivery logistics, or coping with SIM card shortages. The production, distribution, and management processes of physical SIM cards are therefore entirely eliminated, leading to a reduction of up to 80% in SIM card-related costs, which is a significant cost saving for operators. Furthermore, eSIMs are eco-friendly, removing the need for plastic production and subsequently lowering overall carbon emissions.
• A simplified customer journey - eSIMs streamline the acquiring and setting up of network services. Customers no longer have to visit a physical store, buy a physical SIM, and manually insert it into their device. Instead, everything can be handled online. This implies a massive convenience upgrade, especially for frequent travellers or for those who don't live near a physical store. Moreover, eSIM allows users to quickly and easily swap between networks and plans. Finally, unlike physical SIM cards that can easily be misplaced or damaged, an eSIM remains safely embedded in a device, effectively eliminating any loss-related issues.
• Futureproofing - As more devices (such as smartwatches, IoT devices, and even cars) begin to incorporate eSIM technology, using eSIMs becomes more of an investment for the future. It's an adaptable technology that aligns with the increasingly digital and interconnected world we're moving towards. It ensures consumers can stay ahead of technology trends and be compatible with future devices and developments.

Overcoming challenges of eSIM adoption

While there are numerous advantages, integrating eSIM technology carries certain obstacles. Predominantly, there's a concern with users being able to easily switch between network providers. This surge in competition could result in telecoms operators experiencing reduced revenues which would then require a reassessment of their strategies and services.

eSIM challenges traditional roaming models by enabling users to easily choose local providers, thereby potentially reducing roaming charges. This poses a revenue concern for operators as eSIMs simplify the process for travellers to lower or avoid roaming costs altogether. While beneficial for consumers, it signifies a potential loss for operators.

However, with more mobile providers developing phones that can facilitate eSIM, customers will soon start demanding an upgrade to digital networks. As a result, telcos will have to adapt to these changes as quickly as possible. Failing to do so will result in customers choosing operators that do.

Welcoming the new era of eSIM

As the eSIM landscape evolves, users look forward to a future characterised by effortless connectivity, less waste, and an ever-widening array of customised options, all driven by the synergy of technology and telecommunications. With the rise of eSIM solutions, operators have a unique opportunity to take advantage of its full potential.

Despite this, we are only beginning to uncover the immense potential of eSIMs. As this technology progressively evolves and gains acceptance, involved parties need to unite their efforts in overcoming the challenges and harness the vast opportunities eSIMs present. By welcoming this technology and adjusting to the shifting market landscape, the telecoms industry could unlock unique sources of revenue, amplify user experiences, and set the stage for a more interconnected and digitalised future.