How eSIM is disrupting the telecoms industry? – Flexiroam eSIM

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Envision a world that didn’t require you to switch SIM cards everytime you travel or wanted to change network providers. Imagine a world where you could switch from one network provider to another seamlessly. A world where those expensive data roaming charges are eliminated completely.

The eSIM would allow all this to come to life by eliminating the need to replace your SIM card when switching between operators or while roaming, a configuration can be handled manually or wirelessly.  The eSIM is a concept that has been developed and brought to life over the past few years.

It was first seen in Google’s Pixel phones and Samsung smart swatches. Today a gradually increasing number of other devices have begun implementing the eSIM feature into their devices with Apple being the most recent after they launched their 3 new eSIM supporting IPhone’s.

While the adoption of the eSIM is exciting and welcomed by most, not everyone will feel the same about it. Will the eSIM disrupt the telecom industry by presenting a new structure of customer ownership? Will service providers react to this as a threat or an opportunity?

Impact on the industry

Whether the adoption of the eSIM is a good or bad idea depends on who you ask. For consumers, the addition makes switching or roaming much more convenient. Instead of purchasing a new SIM card and removing the old one to replace the new, all you need to do is provision your device online to your new service provider. The eSIM also decreased prices due to increased competition because of reduced carrier replacement barriers.

For top industry organizations like Apple and Samsung or other device manufacturers, the eSIM bring a great opportunity. Additionally, to reducing device form-factor costs, eSIM will allow them to become “service aggregators” and grant them a major advantage in the customer ownership battle. Even though device manufacturers do not provide actual mobile services, the fact that network provisioning and plan commerce is simple decreases their dependence on service providers to sell smartphones.

For service providers, it’s a huge challenge bundled with an opportunity. It’s obvious that the eSIM would eventually force service providers to get rid of their existing SIM cards. Some network providers are even investing their time and efforts in making sure the eSIM standards are limited (for instance, only being able to pick a network once). However, it’s not likely that service providers will be able to block eSIM innovations. Although, innovative service providers with intelligent multi-play and B2B tactics may be able to offer strong differentiators.

The Multi-play strategy is a good example of how service providers can keep their differentiators. When consumers purchase multiple devices (TV, cellular, home broadband etc.) all from the same operator, it makes switching to a new one difficult as it creates a barrier and then differentiators become more important.

For instance, Apple’s actions last year when they released the first proprietary, programmable Apple SIM within their iPad Air/Mini, and then making the new iPhones SIM embedded earlier this year. The this lets users switch service providers without changing the SIM card.

This showed Apple’s concentration in raising their consumer ownership through SIM disruptions and other complementary initiatives. The iPhone installment plan is an additional indication of their concentration in customer ownership.

Most of the short-term impacts affect the competitive environment amongst service operators. Although, in the long run, we would see new types of service operators that may take consumer ownership from conventional service providers. This may have on impact on the demand and requirements from business support system vendors in many domains.

The eSIM will offer more options for consumers and decrease the pressure on pricing, For the many agile MVNOs in the market, this can only be a really great addition.  

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Related:

What is an eSIM?
How eSIM works?


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