November 14, 2017
eSIM is all about seamless mobile connectivity. However from an industry perspective, the big picture appears still quite disrupted, especially when global mobility is brought in.
In 2013 Apple began offering its customers a freedom of choice by allowing Apple SIM users to select a network operator on the go, directly from their iPads. Apple’s new technology started to disrupt the traditional model and triggered change in consumer usage patterns of SIM cards in handheld devices. Industry players were somewhat resistant to this new trend in the beginning. The new technology offered users more freedom and naturally they reacted positively to the new opportunities. The market had no choice but to follow suit. This new fundamental change in consumer usage patterns and expectations started to change the competitive landscape as well as the industry value chain as new technological innovators stepped in.
Technological advancements have come a long way in four years. Different kinds of multi-profile cellular connectivity solutions via one SIM have been introduced to vendors and consumers, many of them labeled and sold as “eSIM”. As various types of technologies popping up, the GSMA saw that a standardized reference architecture was required in order to align all ecosystem participants when introducing the eSIM. This architecture has been successfully applied and used in machine-to-machine (M2M) applications for several years and last spring it expanded to cover consumer eSIM purposes as well. The GSMA standards enabled any consumer device to be provisioned with more than one operator profile. In practice, device manufacturers and operators are now able to offer consumers the ability to select an operator and the device of their choice, and then securely download that operator’s profile to their device. The eSIM technology offers similar functionalities as did the Apple SIM, but what makes it more advanced is its ability to dynamically provision the SIM profile over the air once the network has been selected.
eSIM brings in a more dynamic pull mode to request electronic profiles and takes the consumer devices away from a more passive push mode of M2M technology, making the consumer experience more seamless and smooth.
What are the consumer experienced benefits of eSIM? SIM cards have become smaller and smarter simultaneously with the ever smarter, smaller, lighter and more compact devices. The micro SIM and then the nano SIM have been informing us that if the SIM card gets any smaller it will be impossible to put it into a device. And now that time has come, and the SIM is effectively so small it can be made invisible inside the device. This means no more searching for physical SIM cards in stores or expecting them via mail. The worry of being locked in with one carrier will be history. The network and operator profile is switched seamlessly over the air with no effort from the end user. Technically, the eSIM can be applied to any form, but are at some point expected to be embedded into devices. After all, the space inside a smartphone is expensive, as evidenced by the removal of the 3.5mm headphone jack from phones such as the iPhone 7 and the Moto Z. Without a SIM card slot there is more room for battery or an opportunity to make the device more compact. The transition away from traditional SIMs won’t happen overnight. However it is anticipated that the eSIM will outgrow them in numbers by large margins over the next coming years.
Even though the first proprietary eSIM solutions were introduced years ago, they have yet to become a commonplace choice. We are living in a transition phase, where operators are putting together initiatives and forming strategy to decide whether to take a role of an early mover or late adapter.
Only a few vendors have taken the early mover stance and actually released eSIM technology compliant devices. Many are looking for ways to respond and embed this technology and functionalities into their next generation devices. These possibilities and consumer requirements are putting pressure on the evolution of devices and mobile network and should be embraced as an opportunity instead of threat.
There have been murmurs of smartphones going the eSIM way for many years. Google jumped on this opportunity and only a few weeks ago launched Pixel2 - the first smartphone with both embedded eSIM and a traditional SIM slot.
Analysts from IHS Markit believe that large-scale smartphone deployments by tier-one suppliers such as Samsung, Apple and Huawei will not be coming until 2019. But clearly, when tier-one MNOs begin offering mobile devices with embedded SIMs, the eSIM market volume is expected to jump sharply. Not only are technological advancements required in the device, end but also on the mobile network carrier side.
When the technology in both devices and mobile operator networks is widespread, we can really start to see the change in how connected devices are operating and how it will change the business operating patterns.
At UROS we are deep into new architectural development driven by eSIM. Our core business lies in managing international mobile data and connectivity via remotely managed connected devices and operator profiles. Our devices have always supported the use of multiple SIMs in one device to help support the most cost-effective roaming solutions. With our latest innovation, the award winning Goodspeed Roaming Application we are bringing global connectivity to handheld devices delivered through our eSIM ecosystem.
eSIM adoption brings several advantages for smart consumer devices. It is the core to many of the IoT solutions in the market today. As an eSIM ecosystem and IoT platform supplier, we welcomed the GSMA’s updated eSIM specifications earlier this year, which now allow eSIM into any consumer device. Wearables, smart appliances and a variety of data-sensor applications are getting smaller but are still expected to perform better, often meaning built-in stand-alone cellular connectivity is required.
UROS has partnered with ROCCO to conduct a global survey for MNOs on eSIM for the roaming consumer. In the preliminary findings we see facts supporting eSIM development, with over 70% of MNOs who took the survey listing the eSIM as positive development, and a quarter of them plan to support consumer eSIM by next year.
The final report on the survey results will be published in December 2017, and will be available at uros.com.
For the eSIM to reach its full potential, both device and network technology is needed to support the remote provisioning and over-the-air profile switching. This standardized architecture is built on top of agreed-upon interfaces and protocols across all ecosystem participants. How well the development of these technologies will coincide remains to be seen. One potential catalyst is consumer demand, as they are starting to request a home-like experience globally.