What Is The Impact of eSIM on the Telecom Industry? – Flexiroam

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This is just the beginning with the implementation of eSIM on the Apple Watch 3, the Pixel 2 and Pixel XL in 2017. The eSIM has been viable for years but many mobile operators have pushed back and hesitated on its development.

eSIM was recently deployed in the recent Apple Watch and other devices that have no space for a physical eSIM. Eventually, smartphones manufacturers began looking at eSIM on a bigger scale as they need additional gains like a battery, more storage space and have to cater to users demand on the smartphones.

The eSIM technology is inevitable and would eventually worm its way into the future smartphones. Big changes are coming that’s for sure.

What is an Esim?

Unlike the physical SIM card, we all have known the removable tiny piece of plastic with a microchip that enables us to identify the mobile carriers which must be pulled out every time the user wants to change providers.

The new eSIM technology is a small microchip already built into your phone, which connects to your preferred carrier’s network or in other words an ‘embedded SIM’.

eSIM is the new replacement which cannot be removed like the current physical sim we use for our smartphones.

Impact on the Telecom industry

Will eSIM be good or bad for the telecom industry? The answer is yes, it will be a great opportunity for them to feel excited to take a bigger step ahead, find better innovative solutions and provide the customers with more services and plans. After all, different telecoms have different opinions and perspectives on how their companies work. Each telecom will have their own unique ways of providing users with better plans. Let’s take a look at the possible impacts for the Telecom industry.

Huge competition between the telecom providers

With the implementation of eSIM on smartphones, users now can easily choose their preferred telco providers. This can cause a ruckus due to reduced carrier replacement barriers. As such, they might have to make changes and adapt to the new business models in order to survive in the highly digitalized eSIM competition. Telco providers can take this as an opportunity and take a bigger step in providing better plans and services.

Loyalty between customers

Telecom providers will have to face the prospect of changes in a way they don’t like in their relationship with their customers. The eSIM will reduce your relationship with your phone company. You won’t need to visit their stores or websites because you’ll be able to connect from your phone settings.

Mobile providers will have to improve their digital customer management and anticipate a decrease in customer loyalty as a consequence of the eSIM. They will have to rethink a new strategy to provide innovative services as the customer experience will undergo a drastic shift.

Another big impact would be on the SIM manufacturers where telecoms usually get their profits from. The eSIM feature will reduce the cost of physical SIM cards. A lot of physical SIM cards made are never used. They are produced, put into packs and then recalled because they reach an expiry date or the branding changes.

Thus, this wastage can run as high. This isn’t good for the environment and it’s a waste of money which is a cost passed on to consumers. The move to the new eSIM could bring real improvements to the environment, for operators, and for users. The most negative impact would primarily stem from the declining use of international roaming and possible price cuts from telcos on IDD services to make roaming services more attractive to users.

The exciting future ahead

Everyone including telcos has a major role in this revolutionary integration of identity and communications. All it takes for the telcos is to define their innovative solutions to leverage their services for end users through other entities. Of course, there are some questions that the telcos company will have to carefully consider but they can take this as a challenge to create more innovative solutions to leverage their services for end users.

Related:

What is an eSIM?
How eSIM works?

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