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Craig PalmerMay 20, 2024 3:15:10 PM4 min read

Welcoming in the future of telecoms: The eSIM


In a world that is becoming increasingly digital and connected, one element has so far lagged behind the digital curve: the small but mighty piece of plastic that sits within our smartphones and tablets controlling our network access, the SIM card. Despite a slightly shaky start when first launched in 2016, the eSIM is now provoking change across the telco industry, presenting telecom operators with the promise of new revenue streams, differentiated offerings and reduced costs - and an enhanced user experience for consumers.

GSMA data shows that over 260 operators had launched commercial eSIM services by mid-2022, demonstrating good traction at the industry level. However, with less than 30% of consumers showing familiarity with eSIM technology, there is still a barrier that needs to be overcome for market traction. Consumer education will be pivotal, and it will also need to be backed by the wider availability of eSIM-enabled handsets in the African market.


A new flexible friend

Flexibility and convenience are the key differentiators for customers when it comes to the benefits of eSIM over the traditional SIM. With eSIM the days of only being able to use one, or possibly two, SIM cards at a time are becoming a thing of the past as it allows users to easily switch between different operators or plans according to their needs - and without having to physically remove the card or obtain a new one. The fact that eSIMs can be remotely provisioned means there is no requirement for a user to visit or speak to an operator, making the onboarding process quick and easy and allowing the user to switch operators remotely.


Roaming opportunities

This, of course, has enormous implications for roaming, with MVNOs in particular driving the adoption of eSIM for international roaming according to data from MVNO Nation. With a large number of new players entering the market last year, the global MVNO community recognises further scope for MVNOs to cooperate on roaming to foster a new era of global interconnectivity.

Indeed, the ability for consumers to change operators as devices cross borders is hugely beneficial, and is driving demand in the multi-territory African market. Until now, travellers have been faced with either roaming charges or the need to go and purchase a separate SIM card from a local operator; eSIM makes connectivity beyond borders a far more straightforward proposition. Travellers can choose a destination country, dates of travel and local plan in advance - and go! Not only that, but the ability to easily switch between two active eSIMs on a device means it’s possible to have one home location eSIM and another eSIM for the travel destination, allowing users to use their ‘home’ eSIM when needing to access services or content that are specific to that market.

As we move closer to the digital identification system espoused by the African Union, it will become crucial for mobile numbers to integrate seamlessly into our digital identities. Meanwhile, eSIMs offer substantially better security against critical data access or unauthorised usage than physical SIM cards in the case of a phone loss or theft.


IOT promise

As eSIMs enhance the consumer experience, they also present operators with prime opportunities to drive innovation and boost revenue. By harnessing the eSIM ability to leverage broader 5G coverage, operators can extend the geographical footprint of their customer base, create value-added services (VAS) beyond voice and SMS and integrate IOT / M2M applications in connected devices to find new sources of revenue.


New eSIM specifications for IOT, iSIM, and the arrival of new IOT technologies is contributing to the establishment of a new IOT ecosystem with new products and solutions aiming for global coverage. This means immense opportunities for MNOs and MVNOs alike to capitalise on new markets such as smart cities, healthcare, media, agriculture, logistics, etc., where demand is rising. Indeed, the roll-out of eSIM in Africa for IOT/M2M applications in industries like agriculture, energy, transportation, and healthcare is predicted to be extensive due to the requirements of these sectors.

eSIM’s ability to enable consistent and coherent connectivity for the remote management of IOT devices makes it ideal for large-scale deployments, but there have been issues for deployment. The new eSIM parameters however are expected to overcome these issues and finally enable the traffic and volumes needed to build a scalable business that delivers ROI.


Innovation and revenue potential for operators

Fundamentally, eSIMs allow MNOs and MVNOs to sell connectivity more cost-effectively and with fewer resource demands. Remote provisioning and onboarding means customer support is kept to a minimum, and operational efficiency can be enhanced, particularly in remote or rural areas where physical SIM card distribution is more complex. The eSIM ability to leverage broader 5G coverage also means that it's easier for service providers to offer reliable connectivity in these non-urban environments, broadening their customer base.

Expanding data plan offerings and incorporating device bundling with eSIMs increases the Average Revenue Per User (ARPU) without incurring additional operational costs or requiring physical touchpoints, leading to cost savings and profit margin improvement. Moreover, eliminating packaging, stock management, and transportation also offers cost savings. Of course, there are also environmental benefits from not having to create and ship physical SIM cards—something that produced more than 560,000 tons of CO2 and over 18,000 tons of plastic in 2021.


Shaping the future of telecoms

As we continue to embrace digital connectivity and the Internet of Things, the eSIM is poised to play a pivotal role in shaping the future of telecommunications. By leveraging its potential to drive innovation, reduce costs, and improve the user experience, the eSIM promises to revolutionise how we connect and communicate in the digital age, paving the way for a more sustainable, efficient, and customer-centric future in the telecom industry.

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