February 5, 2020

Democratising eUICC to connect IoT devices to the internet

About the author

Oscar Falkman, Chief Strategy Officer, UROS Group

Oscar’s writing combines industry experience with a vision for the future. During his 20 years in the business, Oscar has built strategies and offerings for MNOs. Currently as Chief Strategy Officer at UROS, he works with IoT solutions and Smart Connectivity.

Oscar

Through this article I’d like to shed some light on the current challenges and available solutions around global IoT connectivity. I base this on my own experience and references; it is not intended to exhaust all angles and options; and I want to use it to explain the reasons why I believe in UROS.

Democratising eUICC to connect IoT devices to the internet

The first dedicated IoT mobile connectivity offerings and subscription management platforms first emerged as a result of customer requirements. It was not reliable enough for connected devices, home alarms, cars and trucks based on mobile core equipment that was taken out of service for upgrading just because a new iPhone version came out. The pioneering mobile operators (MNO) built the first IoT dedicated connected device platforms (CDP), with the sole purpose of supporting the now fast-growing number of machine-to-machine (M2M) subscriptions.

Some operators still build, develop and operate their own CDPs, although having a dedicated platform with high availability and an interface for enterprise customers to manage their mobile subscriptions is not really a key differentiator anymore. There are still many mobile operators with no IoT offering at all. The ones that do have it, have pretty much the same technical and commercial offering developed in the early days.

Over time, as enterprise requirements have evolved and expanded to all geographical corners of the world, the available connectivity building blocks have not evolved at the same pace.

First of all - there is really no single connectivity player out there who can cover all countries in the world and support an enterprise in an optimal way. The three balancing factors are:

+ Price on data traffic
+ Quality/coverage/availability of the connectivity service
+ Market access (being compliant to national telco regulations e.g. permanent roaming etc.)

Combining the footprint and capabilities of the biggest MNOs in each world continent can take you really far! This is exactly what the most mature automotive OEMs and enterprises have done over time by applying a multi-sourcing strategy. The problem or consequence is that you now need to have:

+ 4-5 different contracts to administrate and follow up on
+ 4-5 different invoices of different shape and structure as a result of demand driven commercial fixed buckets, flexible pools and bundles for general and specific Area of Territories or countries
+ 4-5 different assembly buckets of various colored SIM cards in the factory to keep track of. What colored SIM goes into what vehicle/device that are being produced toward what order and what market?
+ 4-5 different technical integrations to multiple CDP platforms with various functions and features

It is not uncommon that this requires an organization of hundreds of people to operate and maintain. In addition to this - all enterprises that have been in business for a while are suffering from vendor lock-in. It’s the SIM cards’ fault! The SIM cards used and deployed in the market cannot be swapped. The pure physical labor and time it would take to swap a SIM exceeds the saving of a lower monthly subscription fee. The lock-in becomes worse at the same pace as the enterprise business grows. You don’t see it until it hits you! Before you know it - the negotiating power for data prices is with the connectivity supplier. You are forced to commit to long-term contracts with volume commitments if you want a reduction on existing volumes and you have nowhere to move it. If you decide to go with another supplier for the future volumes - you risk getting a shock increased price on the installed base = you are locked in.

The solution to this problem is eUICC.

A SIM card of any physical shape with the ability to download a new SIM profile over-the-air and load it. This means that you can shift mobile operator profile from one to another in an instance.

Great! So, the mobile industry has been talking about the “eSIM” for the past ten plus years - why is it not commonly used? Here are a few of the reasons:

1) It takes time for a disruptive technology like eUICC to become accepted by the general mobile industry. Changes are sometimes uncomfortable and not welcomed with open arms.

2) The SIM vendors (supplying the regular SIM cards but also the eUICC SIMs to the MNOs) have priced it high in comparison to a standard SIM. You suddenly get high integration costs, an increased cost for the actual SIM card, switch costs when making the switch and recurring monthly costs for the service/platform etc.

3) Just having an eUICC SIM does not solve the complete problem. You need at least two MNO’s connected to your eUICC service to be able to make a switch.

So, what are the enterprise options and what is currently happening?

As an enterprise you can go and source your own eUICC service directly from the SIM vendors. This is a CAPEX investment and you need to acquire your own eSIM Management platform and negotiate contracts with each of the MNOs you would like to work with. On one hand it gives you independence and freedom from the lock-in effect, but on the other hand, the multi-sourcing complexity increases, and you are limited to only using the enterprise data volumes when negotiating data rates with the MNO’s you’d like to connect to your eUICC ecosystem.

You could source the eUICC service from an MNO - many are now starting to offer it - but the result is that you become locked-in again, just in a different way. Having an MNO provide you with the service further limits your success rate in actually being able to connect more MNOs to your eUICC ecosystem. By experience, I have seldom seen “competing” MNOs work well together for the benefit of the greater good - it is just the natural reality in a competitive and well functioning market.

With all of the above said, we are getting closer to why I strongly believe in UROS and our connectivity offering. UROS is an independent eSIM provider that has taken the CAPEX investment of the eUICC service and super-simplified the commercial conditions for an enterprise to adopt it. We are building it on industry trusted technology providers and platforms without inventing anything new or proprietary.

We are simply democratizing the eUICC technology in the way it is intended to be used.

UROS is not alone in this space, but what differentiates UROS from the rest is that we already now are a big customer to many MNOs. We are not just bringing a good idea or concept to market - we have ongoing business and data volumes to place with operators. Having data volumes and business to offer the MNOs in negotiations and to get them interested in joining your eUICC ecosystem is the key. UROS brings data volumes from many enterprises together and enables all parties to make more money.

Using the UROS eSIM gives you immediate access to multiple MNO SIM profiles as well. To “solve the world” of connectivity you need 1-3 tier 1 MNOs and a handful of regional/national MNO SIM profiles to make regional adaptations. In this way we can offer:

1) Global competitive data prices including a full eUICC solution

2) Best possible device availability and high data session quality

3) Access to restricted markets through regional/national adaptations

Democratizing the eUICC services means that we bring economies of scale to the CAPEX investment and simplify the commercial conditions of buying the service through us. We unlock the enterprise customers and simplify the otherwise very complex multi-sourcing situations. We utilize the joint data volumes to get better prices for the enterprises as well as increased revenues for the MNOs. We provide the independent enablement layer to make the impossible possible.

Disruptive role of adaptive pricing

UROS adaptive pricing is a single pricing model that covers any and all use-case needs in an automated and optimized way.

All Enterprises have different needs to support different use-cases. A tracking company for example is for some purposes only sending position data back to the servers once a week using only 10MB data per month. If the same asset is lost or stolen, they e.g. turn on real-time tracing and the usage rises up to 500MB a month. The data usage increases x50 but the price usually only rises x10 since it is industry standard to give a data discount on higher usage volumes.

The way the mobile industry has dealt with this is to offer individually priced “data bundled packages”. Almost all Enterprise customers usually have at least two or three price bundles for different amounts of pooled traffic to support the various use case scenarios. It is up to the Enterprise to manage what commercial package to activate, and to which SIM card. In the end, this always results in either:

1) high cost for overage when high usage SIMs remain on a low traffic bundle or

2) that the Enterprise pays the higher traffic bundle price but uses only a fraction of the traffic included.

With UROS adaptive pricing model, we offer you to negotiate customized prices for expected traffic use-cases, e.g. a price for 10MB, 100MB and 500MB usage. At the end of the month the invoice will be calculated based on the optimal combination of these so you never again pay overages or end up with unused data.

This disruptive approach for pricing combined with our campaign to democratize the eSIM technology, puts UROS in a leading position as provider for global IoT connectivity.

Learn more about adaptive pricing.

Learn more about the UROS Connect solution.

If you want to stay up to date on our latest developments and company announcements, subscribe to the UROS Quarterly Newsletter, or follow us on LinkedIn or Twitter.