Enterprises make new connections as eSIM delivers on market expectations

With projections as high as $10bn by the decade's end, eSIM has taken the telecoms market by storm. Many of the latest smartphones, wearables, and IoT devices are now eSIM-compatible, prompting MNOs and MVNOs to expand their eSIM capabilities. Businesses in sectors such as financial services, travel, and retail are also seizing the opportunity to offer their own mobile services.

The demand for eSIM integration has surged, as various players look to capitalise on the new business models enabled by the technology's mobile roaming and connectivity capabilities.

Growing adoption

The adoption of eSIM technology is being driven by a host of new use cases, ranging from mobile roaming and IoT to fintech and transport apps. For instance, telcos can use third-party platforms to provide instant eSIM provisioning efficiently and cost-effectively. These platforms typically operate on a scalable, cloud-based model, which eliminates the need for significant investments in upfront infrastructure. Telcos integrate their systems with the third-party’s APIs to exchange data, plan information, and provisioning requests. The platform then generates the necessary eSIM profile and delivers it directly to the customer’s device, communicating with the telco’s network to complete the provisioning process.

MNOs and MVNOs can broaden their global reach by offering instant provisioning and flexible eSIM bundles that enhance roaming options. This allows them to sell eSIMs directly to consumers without worrying about inventory. Enterprises and financial services companies are also benefitting from eSIM technology, ensuring global workforces remain connected and providing continuous connectivity for mobile banking and payment apps. Additionally, the rise of electric vehicles has led to the deployment of eSIM technology in charging stations, while fast food delivery companies use it to support digital transactions and keep their drivers connected throughout their journeys.

Lower barriers to entry

eSIM apps are rapidly increasing market share in the travel sector. According to recent research from Kaleido Intelligence, retail spending on travel eSIM services is expected to reach $3.3 billion in 2025 – a near 165 per cent increase on 2023. This is due to industries like airlines, hotels, payments, and retail offering their own eSIM travel services, giving travellers greater choice, flexibility, and cost savings compared to traditional roaming plans.

This adoption is being driven by lower barriers to entry for businesses. The technology has matured, making it more reliable and accessible. At the same time, the GSMA has established global standards for eSIM technology which makes it easier for enterprises to integrate eSIM capabilities into their devices and services. Currently, around 10 per cent of smartphone connections are eSIM-based, but this number is forecast to reach 75 per cent by the end of the decade.

Ultimately, the shift toward eSIM is a response to supply and demand dynamics. There is increasing demand from businesses for flexible and cost-effective connectivity solutions for their employees and customers, particularly in light of the rise of remote and hybrid work. This, together with the growing number of IoT devices, has further intensified the need for eSIM-based connectivity solutions.

Opportunities and challenges

The rise of eSIM technology offers telcos significant opportunities and challenges as they look to develop their own eSIM propositions and accompanying revenue streams.

eSIM is efficient, cost-effective, and flexible. It allows for faster and more efficient provisioning of services, eliminating the need for physical SIM cards and thereby reducing operational costs. By enabling seamless connectivity for mobile and IoT devices - with plans tailored to customers’ needs and usage patterns – eSIM can create new revenue opportunities from data plans and device management services. In addition, the flexibility of eSIM technology can lead to increased international roaming revenue, and the potential to offer value-add services like digital wallets or more personalised experiences can generate further revenue.

There are challenges, however, such as increased competition. As the eSIM ecosystem becomes more accessible to new players, they can more easily enter the market, which increases competitive pressure on traditional telcos. This heightened competition can result in price erosion, affecting revenue generation for established companies. Furthermore, network management can become complicated. While eSIM’s flexibility is beneficial, it can also lead to unpredictable traffic patterns, which may strain a telco’s network infrastructure. It’s crucial, therefore, for telcos to dynamically manage their network resources to accommodate fluctuations in demand.

Using the right tools

Fortunately, solutions are available that can help telcos navigate these challenges. For example, a digital, cloud-based eSIM management platform enables telcos to offer eSIMs with competitive, tailor-made data plans in real-time. This allows customers to use the service immediately without the need for extra provisioning. By accessing and analysing real-time data, telcos can then track usage, monitor service status, and manage network resources effectively to ensure customers enjoy uninterrupted connectivity.

It’s not just telcos that can benefit from such platforms either. Businesses can use them to set up digital storefronts from which their customers can purchase and download added-value eSIM services. This allows them to diversify, creating new business models and unlocking additional revenue streams.

With the right tools, MNOs, MVNOs, and businesses across a range of sectors can address the challenges they face and, by capitalising on the opportunities, position themselves to thrive in the eSIM era.

Gregory is the CEO of Telna. Originating from South Africa as a skilled lawyer and serial entrepreneur, he recognised the transformative power of eSIM and cellular IoT early on. Since acquiring Telna in 2015, he's pioneered innovations in converged communication and software-defined networks.