The end is not near for traditional SIMs
Published a year ago
eSIM Technology & Embedded SIM
Embedded SIM or eSIM technology has created quite a hype in the present market. With subscribers offered the freedom to choose between multiple networks, mobile operators are apprehensive about the impact of this change. But it will take a while for the industry to make a complete shift to eSIM-enabled devices. Nevertheless, eSIM provider, Workz Group advises mobile network operators (MNOs) and mobile virtual network operators (MVNOs) to consider the new opportunities that eSIM will bring to the industry.
Understanding eSIM technology
Since its introduction to the world in 1991, the SIM card has evolved through various iterations of full size, micro, mini and nano. However, the main concept has remained the same. A SIM is a physical card with a smart chip that securely stores unique identifier numbers and can be transferred from device to device. Undoubtedly, the SIM card has revolutionised the telecoms industry and helped spur the growth of mobile.
Today SIM card manufacturers produce the cards using a process that involves both automation and human labour. Since the cards are physical goods, SIM card manufacturing involves all the complexities of developing these physical products. After they are manufactured and packaged, the SIM card suppliers start distributing them through various channels which involve moving the goods. So, the SIM card manufacturing and distribution supply-chain are costly and time-consuming. It requires manufacturers and suppliers to move the products from one point to another through a multi-stage process.
The embedded SIM promises to eliminate the physical manufacturing and distribution of SIM cards. The chip is soldered directly onto the device during the manufacturing process. The software available on the eSIM enables the user to change operators Over-The-Air. The function of enabling, disabling and deleting the data on a device required to connect to each mobile operator’s network is known as remote SIM provisioning.
The eSIMs are smaller in size and weigh less than traditional SIMs. They take up 90% less real-estate on the devices. They can withstand a lot more adverse situations like shock or heat. Also, because there are no SIM slots, device manufacturers can water-proof their products. The eSIM also opens up possibilities for better management of various Internet of Things (IoT) devices.
The impact of eSIM on mobile network operators
In the short-term, mobile network operators shouldn’t worry. Even though the future of eSIM is bright, there is still a long way to go. The development of this technology is still in its nascent stage. The traditional SIM card will still dominate for many years to come with McKinsey & Company concluding that it will represent at least 60 per cent of the market in 2022.
In the long-term, eSIM opens new doors for mobile network operators. Here are some benefits:
• With embedded SIM technology, operators have the capability to explore new markets such as IoT devices by providing cellular connectivity to connected cars, smart meters and health trackers.
• This will lead to the generation of new revenue streams.
• Since the embedded SIM is soldered on the device, operators can save significant time and cost as they no longer need to worry about the SIM card manufacturing and distribution process.
• Operators can offer local connectivity with an incentive of high speed, low cost and easy network access to roaming users who were once dormant travellers due to high charges and erratic connectivity.
• There will be an increase in the number of subscriptions from a single-device user to multiple-device users such as an eSIM-enabled smartphone, watch and car.
Strategic considerations for operators
The migration to eSIM technology will prove immensely beneficial for mobile network operators. With eSIM, they will be able to connect millions of not just smartphones but IoT devices as well. Markets and Markets estimate that the eSIM market will grow from $250 million in 2018 to nearly $1 billion by 2023. However, it is important for operators to start preparing now, says eSIM provider, Workz. By offering this technology, operators can reinforce their public perception as a market leader and offer their customers the technology of tomorrow.
Debora John