Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Freelance Technology Journalist Kate O’Flaherty explores how eSIM enabled devices are already starting to hit the market and asks: what use cases will the area enable, beyond smartphones and smartwatches?

Embedded Sims (eSIM) inside the Apple Watch 3 and Samsung Gear 3 allow consumers to make calls and send texts without pairing to a smartphone. It is thought the technology – which takes away the need for a removable Sim card – will soon appear more widely on mobile phones. According to reports, Apple’s next iPhone launching this autumn will include an eSIM, possibly signalling the death knell for the traditional Sim card.

Beyond smartphones, many more devices will be enabled by eSIM over the coming years. For example, the technology is likely to feature inside the multiple ‘smart’ devices in people’s homes. In addition, shipping companies could take advantage of eSIM within internet of things (IoT) devices to track goods as they move along the supply chain.

With standards around the technology near completion, eSIM will soon appear inside devices such as connected PCs, laptops and tablets. “We expect more devices like laptops, tablets, smart watches and other wearables to come with eSIM over the next few years,” Joacim Rask, Head of Business Development, Tele2, says.

Indeed, the goal of eSIM is to enable new types of devices, Benoit Jouffrey, VP Connectivity and Embedded Solutions at Gemalto points out. It creates an entirely new ecosystem, he says, because eSIM “dematerialises the part of the process” that sees the customer visit a physical shop.

Philippe Lucas, SVP Strategy, Architecture and Standardisation, Orange, agrees, saying: “We believe that the embedded Sim is the enabler to increase the number of devices with cellular connectivity. You can buy a device anywhere you want and add it to your subscription without having to go into a shop.”

This new structure could be taken advantage of by MVNOs. “MVNOs are small players and are very agile; they could find good positioning in this digital journey,” Jouffrey says.

ESIM’s value in specific verticals also opens up opportunities for MVNOs. An MVNO could be the sole provider of connectivity for a car manufacturer, for example, says Jouffrey. “There are some cases when an MVNO might be the sole interface handling connectivity for a car maker across multiple geographies.

This could see MVNOs enter agreements with local operators to download the Sim profile, he says.

But MVNOs are not the only beneficiaries: eSIM provides an opportunity for mobile operators to add more devices to user contracts. “We have an increasing number of connected devices in the home. Using eSIM, you can add new devices to an existing contract,” Jouffrey points out. “If we do that, by definition we have less inclination to churn as it might be more complex.”

New MVNOs

According to Mikael Schachne, VP Mobility Solutions at BICS, eSIM allows manufacturers to make a device in one place and ship it around the world. He explains: “When the profile is downloaded to the device, you can enjoy connectivity with local tariffs.”

“Previously, you had to access the device to switch from one operator to another. Now with eSIM, the opportunities for MVNOs to get their own Sim profile to end user devices is facilitated with technology.”

He says this is seeing more MVNOs being launched “especially around data and IoT where they want their own eSIM and to keep control”.

Schachne cites the example of logistics companies tracking shipments around the world. “They don’t know where those shipments will be at any given time, so they need highly reliable global connectivity. The best way to manage this is to become an MVNO.”

He explains: “It is about owning the ecosystem to control the quality and offer new services and integrate with every single mobile operator – as well as gaining access to as many mobile operators as possible.”

Therefore, a large device manufacturer can have the means to integrate with at least one mobile operator in every country and use eSIM to manage the subscription. “ESIM allows you to switch easily from one operator to another,” Schachne says. “However, the difficulty lies in the ability to source those different Sim profiles from multiple mobile operators, as well as managing the hand over from one to another.”

This challenge creates a need for a global eSIM profile, he says, which is why BICS and other carriers have developed solutions able to manage this.

Changing ecosystem

Overall, eSIM is useful because it offers greater flexibility for the OEM, solution provider or end customer, says Tim Sherwood Vice President, Business Development, Mobility and IoT Solutions at Tata Communications. “Without the eSIM model you are still beholden to a single mobile operator, or the relationships they have on the roaming side.”

However, within this changing ecosystem, certain issues must be taken into account. Jouffrey says it is important to provide “a lean, fluid end user experience”. He explains: “We need to have a process that is at a minimum, the same level it is today. This is a challenge when dealing with new technologies and processes.”

Another issue is the number of eSIM-compatible devices. “In order to unleash the potential of this technology you need to have devices that implement it,” says Jouffrey. “All the M2M players are looking at this and dealing with subscription management. On the consumer side, it has potential in the connected PC market and wearables – but you need competing devices that have the same level of fluidity as the Sim card.”

At the same time, security is an area of concern for eSIM used in IoT. “ESIM doesn’t change the security issues in IoT but it probably changes the authentication and authorisation side of it,” says Sherwood. “This includes the hand off when the profile changes and ensuring there is a trusted relationship that this device either belongs to the end enterprise or the OEM providing part of the service.”

There is no doubt eSIM will create a more competitive marketplace for MVNOs and mobile operators. However, it is integral to ensure the eSIM user experience matches or exceeds that of the traditional Sim. Jouffrey says “I don’t think the problem is technological, the issue is the end user experience.”

Discover how you can be at the forefront of the technological advancements in eSIM, IoT, PCs, wearables and mobiles at the e-SIM Connect 2018.