Digitalizing processes have been a necessary step in the modern era of increased mobility and connectivity. With this in mind, eSIM technology brings great benefits such as configuring device connectivity profiles remotely, mitigating operational risks, giving competitive flexibility, and enhancing geographic scalability.
Gartner estimates that eSIMs will significantly impact the computing devices market over the next three-year horizon. Moreover, GSMA Intelligence forecasts that by the end of 2022, there will be half a billion eSIM smartphone connections.
An embedded SIM (eSIM) is known to be a silicon chip that is installed in the device permanently, providing secure storage of details in a digital format. It is where mobile networks function and store their data through radio signals. GSMA, ETSI, and other recognized industry bodies standardized this technology.
Through a series of over-the-air (OTA) commands sent to the device, an eSIM solution enables users to remotely switch from one carrier profile to another in a matter of seconds. Working exactly like a traditional SIM card with additional perks, an eSIM combines a remotely programmable chip in the phone or device (called an eUICC) and a digital profile, which keep the information on subscriber identity and data for network authorization.
The leading comparison between a physical SIM card and the eSIM is the capacity to be re-programmed or re-provisioned to contain several profiles. It is also significantly smaller with the size of 5×6 millimeters, approximately half the size of a nano-SIM card, allowing device manufacturers more design flexibility and lowering their production costs. Profile management, customization, and network updates can also be done anytime and anywhere using the remote SIM provisioning (RSP) technology. Since it’s digital-run, eSIM also provides convenience and safety, especially when traveling, as it cannot be tampered with or stolen by anyone.
eSIM market adoption
Just like any other technology adoption and vital industrial change, embracing eSIM at scale will take time but it’s a prerequisite for both consumers and businesses. Based on GSMA Intelligence’s data, at the end of 2020, the number of commercially available eSIM-supported devices reached 110 models. These include smartphones, laptops, smartwatches, and tablets.
The transition to eSIM-only supported devices is one of the key factors that could accelerate eSIM market adoption. Typically, commercialized smartphones today have dual-SIM support capability (physical SIM and eSIM). A realistic estimate for OEMs' transition to eSIM-only phones is considered to happen between 2022-2023. This will mainly influence consumers’ ability to have and access multiple subscription plans from the same phone, giving more advantages to operators and device manufacturers.
Even tech companies that would never consider themselves as telecom providers today could compete in the future, thanks to eSIM technology and the possibilities of 5G. For operators, this presents both a major disruption and a massive opportunity as consumers can now easily go online and purchase data connectivity from whomever they choose. Without a doubt, eSIMs’ built-in connectivity is a game-changer.
The momentum for eSIM launches will likely accelerate further in 2022 since 90% of operators plan to offer eSIM service by 2025. Aside from that, the possibility for a more open market and greater competition between telcos and MVNOs as well as other tech companies looking to expand opens.
Additionally, the growing importance of RSP for machine-to-machine (M2M) communications is expected to boost the growth of the eSIM market. This can be seen across verticals such as robotics, automotive, logistics/fleet management, traffic control, telemedicine, and utilities, among others. In line with this, as the proliferation of IoT technology heightens as well, this can positively impact the growth of the eSIM market.
With the demand for better smart device solutions, the eSIM market is anticipated to propel further in the coming years. One evidence of this is GSMA’s continued efforts to support the development and sustainability of the eSIM ecosystem worldwide by addressing the challenges that would emerge in the near future. These include updating eSIM specifications and introducing a new eSIM architecture specifically for IoT devices.
By and large, there are big incentives for device manufacturers, OTT service providers, and other tech players to support the industry-wide adoption of eSIMs. In fact, a study by Juniper Research disclosed that over the next four years, global eSIM deployments across all consumer verticals are expected to increase by 170%. With mainstream adoption being highly reliant on backing from network operators, there will be more pressure on operators to support eSIM frameworks and boost this market’s maturation.
eSIM brings better service for IoT
With digitization strategies in place along with the need to facilitate the use of IoT devices, the demand for eSIM has never been higher, with its growth continuously accelerating. IoT products would merit a lot in an eSIM-enabled world. As an example, service providers are already leveraging eSIMs to transform the enterprise connectivity model that incorporates IoT.
One IoT use case for eSIM is autonomous cars where blank eSIMs can be activated once it crosses an international border. In this case, the carmaker’s MVNO will automatically connect to a particular CSP in the destination country.
eSIM tech in vehicles has been developed at a faster pace and the European Parliament’s decision to require all new cars to be fitted with eCall technology from 2018 onwards has been a great driver of this. As a result, cars are enabled with automatic call emergency services in the event of an accident. Nowadays, vehicles are also equipped to receive software patches over-the-air to complete any necessary update remotely.
It’s becoming increasingly clear that IoT devices like consumer wearables, gadgets, and cars will be better serviced by having self-contained connectivity powered by eSIMs. With an eSIM solution, network connectivity, streamlined operations, and enhanced control can be achieved. Ultimately, eSIMs simplify onboarding, inventory management, and logistics which are previously associated and time-consuming with multiple SIM cards.
Any business can benefit from eSIM technologies if they have a current IoT solution in play or seeking to deploy one to innovate. With that said, the eSIM market offer opportunities mainly among providers to deliver comprehensive, turnkey offerings. Regardless, having a trusted partner that can guide you through the enablement of an IoT eSIM ecosystem is vital to ensure maximized returns on investments.
5G is the best network for eSIM
Did you know that by 2024, 5G and eSIM are projected to reach 40% of the world’s population? Accordingly, 5G users would account for 1.5 billion subscriptions globally. With 5G’s faster data transmission speed, low latency, and the ability to connect many devices, combined with eSIM’s ease of use and serviceability, these two mobile-centric technologies are the perfect match.
In parallel with this, a research from Capgemini Research Institute found that over 40% of consumers would prefer to activate mobile services using eSIMs rather than visit in-store to activate a physical SIM card. Hence, a fully integrated 5G-capable eSIM can bring a more seamless experience.
The outcomes from the benefits of 5G are multipurpose and give the means for new, innovative services. As IoT expands, Wi-Fi won’t be enough to cater to the number of connections and cellular connectivity through eSIM. Thus, 5G is the best network for eSIMs as it enables a full digitalization of the customer journey as well as automation and data analysis thanks to eSIM-equipped sensors.
Essentially, a Qualcomm study indicates that by 2035, 5G’s full economic effect will be actualized across the globe. How much value would it bring? Roughly $13 trillion worth of goods and services. This effect can impact eSIM’s market growth by improving network connectivity with a faster, reliable, and guaranteed connection and sustaining a more significant number of connected devices.
Without a doubt, eSIMs play an integral role in 5G networks as any 5G-capable eSIM offers a versatility unparalleled to the traditional SIM technology. Businesses can manage their networked assets wherever they are located at while a device owner will be able to switch cellular carriers without visiting any provider personally.
Through an integrated IoT solution, eSIMs are being placed in numerous cellular-enabled devices where with 5G, these devices will possess processing power that is incredibly robust and will rely on their fully integrated eSIMs for connectivity and accessibility. Subsequently, 5G device renewals represent an opportunity to push the transition to eSIM.
