In this blogpost I’m going to discuss a bit of technology which I think falls into the “real soon now” category—the eSIM.
Announced as a standard in February 2016 at the GSMA Mobile World Congress, the eSIM specification describes a SIM on a chip that is soldered directly onto the circuit board of the connected device. All the smarts, such as connecting to a mobile network, live in the applications which run on the eSIM. Once a device is eSIM enabled the end user is able to select from multiple mobile networks without physically changing the SIM card. The eSIM therefore does away with the need to insert a physical SIM card into the device.
However, it’s important to note that the eSIM is different to the “solder on” SIM cards, which are essentially chips from plastic SIM cards that are soldered into where a SIM slot would be on a device. Solder on SIM cards are still tied to a network operator and provided by a specific mobile network.
Once eSIM technology in both mobile network carriers and devices is widespread, there will be a visible shift in how connected devices can operate and how business is done in this area. Not convinced?
So what are the benefits of moving to an eSIM powered mobile ecosystem?
With no need for a physical SIM card slot, manufacturers will be able make devices smaller. Wearable devices such as smart watches (the Samsung Gear S2 and S3 watches are eSIM enabled in some markets), and IoT devices such as sensors and smart meters can be streamlined, possibly opening up new markets for connected devices (wearable rings perhaps?).
Doing away with the need for a physical SIM card slot can allow the device to be weatherproof and dust proof, reducing the potential for the device to be damaged in harsh environments. And while it’s quite reliable already, doing away with the “moving part” of a SIM sliding into a slot and being held in place by a bracket or spring will be an added benefit in industrial high impact environments, such as smart sensors on construction machinery.
As an added benefit of being a smaller size, eSIM enabled devices which previously relied on “intermediate” forms of communication, such as wifi or bluetooth, can now talk directly over the mobile network to the Internet. Eventually, as low data tariffs continue to evolve, it will be simpler to have a wearable device connect straight to the Internet rather than via a local intermediate gateway, e.g. bluetooth to the end user’s smartphone as the intermediate connection. This also has the expected benefit of further uptime since there are less potential points for loss of connectivity to occur. Every device is self-managing.
However, while these outward facing benefits already bring a lot of promise and potential for innovation to both the consumer and M2M markets, there are still more benefits to the telecoms channel. Let’s discover what they are – with a couple of “gotchas” in there as well that the reseller needs to be aware of!
What does the eSIM mean for the IoT market and the telecoms channel?
Naturally, Mobile Network Operators will feel the most impact. While some embrace the eSIM and the flexibility it offers, others are opposed to the eSIM rollout and are inclined to hold out with the traditional plastic SIM model as long as possible. Sometimes the decision is hard to make for the MNO because the introduction of the eSIM is a two way street—end users will have the ability to move between networks as they wish, whilst the MNOs have a new tool to easily win end users to their own network (if their service is up to scratch or their marketing campaigns are good enough).
With this new found freedom, the power does go to the end user. Don’t like the service? Move to a new carrier on the spot! In the eSIM world there is no need to wait for a new SIM card to arrive in the post or make the trip up to the high street.
When these same principles of flexibility are applied to a large IoT estate, consisting of thousands, even millions of SIM enabled devices, there is a major sea change. MNO’s, MVNO’s and resellers have to up their game, as the entire approach to a sale, support, and retention of the customer’s estate drastically shifts. No longer can a provider with a IoT SIM estate consider that estate as “safe” as the previous rules about stickiness do not apply anymore. Having a few thousand of one’s SIM cards deployed all over the country doesn’t mean the customer is tied to one’s service. It would be entirely possible (within contract limitations) to move the entire base to another network on the spot.
New products based on tariffs will also appear. For example, if a reseller had eSIM tariffs available from four MNOs, they could start packaging together combo services, as it is the eSIM which moves between networks, not the SIM having a multi network roaming agreement. It will be interesting to watch this space and see what new and exciting products emerge.
Security also benefits, as there is nothing physical to remove anymore. Gone will be the days of people grabbing USB dongles with SIM cards, or removing the SIMs themselves to put in their own phones and tablets (this is a big issue in some low overhead markets such as in taxi companies). And if the device itself is stolen, as soon as it powered on it will register on a network, or simply be disabled, so there will be benefits from a tracking perspective.
To summarise, in the “real soon now” future being a successful reseller or MVNO will be all about providing high standards of service while retaining value for money, and keeping an eye on value adds. Some services available now, such as the option for private APN’s or bespoke IP addressing, will help retain the customer and create new forms of stickiness.
For more information about the eSIM standard check out the GSMA website.
If you want to know more about how Pangea can help you with an eSIM application, or M2M and IoT connectivity in general, please get in touch with us at email@example.com.