We invited a panel of experts to discuss the new eSIM IoT specifications, exploring their impact on the IoT market and the potential opportunities they present for MVNOs.
The panel featured a diverse group of industry leaders, each bringing unique insights into the eSIM IoT landscape. Michel Zwijnenberg, an MVNO, eSIM, and IoT expert and the CSO at conekkt, part of Melita.io, served as the moderator. Javier Gonzalez Velazquez, Head of IoT & eSIM Solutions at 1Global, shared his expertise on implementing eSIM solutions. Pablo Iacopino, Head of Research and Commercial Content at GSMA Intelligence, provided valuable data-driven perspectives. Jacques Bonifay, CEO of Transatel, offered insights from his extensive experience in the telecom sector, while Kushal Shah, Business Development Director for Mobile Virtual Network Operators at BT Wholesale, discussed the role of MVNOs in the evolving IoT market.
What are the new eSIM IoT specifications?
The new GSMA IoT eSIM Specifications, known as SGP.31 (technical specification) and SGP.32 (test specification) were introduced in 2023. They are designed to simplify the deployment and management of eSIMs in IoT devices. These specifications enhance flexibility, scalability, and interoperability across various devices and applications, addressing the unique needs of the IoT ecosystem and promoting a more streamlined and efficient implementation of eSIM technology in the industry.
Michel Zwijnenberg – Melita.io: “There are great developments we’re seeing now in consumer eSIM, including the freedom and ease of use it offers. We hope that this will soon apply to IoT devices, thanks to the new eSIM IoT standard. What can we expect from this new standard?”
Javier Gonzalez Velazquez – 1Global: “Let’s start with highlighting the main drivers for those considering the implementation of IoT eSIM. Despite its potential, there are still several barriers. We’ve had M2M eSIM for quite some time now, as it was the first type of implementation. However, significant expansion has been hindered by two key factors: the cost of implementation and the complexity involved.
With the release of the new IoT eSIM specification, these barriers are expected to be simplified or even eliminated. On one hand, device manufacturers are seeking a solution that allows them to produce a single device and deploy it anywhere in the world, much like we do with smartphones today. This is why travel SIMs are becoming mainstream in the adoption of eSIM – because you can take one device, travel anywhere, and install any connectivity. IoT device manufacturers desire the same capability, and the new specification is set to enable this.
Another significant barrier with the previous version of the M2M eSIM specification was the necessity to interact with each operator to provide connectivity. This made the process complex and expensive due to the required integrations. The new specification removes these obstacles, and I see this as a game changer for IoT.”
What will drive the adoption of the IoT eSIMs?
Michel Zwijnenberg – Melita.io: “The major driver for consumer eSIM adoption was Apple. Do you think something similar could happen in IoT space?”
Pablo Iacopino – GSMA Intelligence: “It’s very, very difficult. I don’t think so. The consumer and enterprise markets are very different. IoT is highly fragmented, so I don’t believe there will be a single equivalent to Apple in terms of acting as a catalyst or accelerating growth. IoT is entirely different. I don’t think there’s one single catalyst that could unlock the market completely.
Jacques Bonifay – Transatel: “Adoption of the consumer eSIM protocol for IoT devices is currently limited, with only a few examples and not yet widespread. Consumer eSIMs are mostly found in devices that are eSIM-only, such as iPhones in the US or travel eSIMs. Notably, Apple is expected to introduce eSIM-only devices in Europe this September, which will likely lead to broader adoption across the industry. Consumer eSIMs will become ubiquitous, and their use will be widely understood.
However, IoT eSIMs are not yet fully developed or widely adopted. For them to gain traction, device manufacturers and industry players must push for their adoption. First, the standardisation process needs to be completed, and the norms must be published. Once that happens, players like us, alongside the broader industry, can drive the adoption of IoT eSIMs. These eSIMs will likely see significant deployment in mobile broadband applications, where data costs are critical. Organisations in this space will want to continue negotiating between different providers to optimise costs.”
What use cases will the new specification bring?
Michel Zwijnenberg – Melita.io: “What specific use cases do you envision for IoT eSIMs, and which of these do you think will deliver the most value?”
Pablo Iacopino – GSMA Intelligence: “Everyone is searching for the next big use case beyond automotive, as automotive is already a strong example of eSIM becoming mainstream. So, what will the next major use case be? There is progress across various use cases, such as logistics, asset trackers, smart meters, and drones, which also present a good use case for eSIM. However, identifying a single “killer application” for eSIM is quite challenging. What’s crucial is to keep advancing across all these use cases.”
Kushal Shah – BT Wholesale: “For MVNOs, it’s primarily about enhancing their competitiveness. What I mean by that is, that if you are currently servicing the IoT market or plan to, you will encounter some familiar challenges. One such challenge is offering a reliable connection with a compatible device, as device compatibility has been an issue in the past. Ensuring that you can provide a reliable service at scale is crucial, as you need to grow alongside your customers.
Interoperability is also important, especially the ability to switch networks. In IoT use cases, you must offer backup networks, and switching has become much easier with the new specifications. As a result, your service becomes more competitive, broadening the range of use cases you can offer your customers.
I think we’ll see not a single “killer application” but a variety of use cases where MVNOs can address specific customer requirements. These could include mission-critical applications, healthcare-related use cases, and more. The number of use cases will expand, allowing MVNOs to address them much more competitively than operators can.”
Jacques Bonifay – Transatel: “There isn’t a single dominant use case beyond automotive. As a global MVNO, we must remain prepared because we can’t predict which direction the market will take.
The new standard simplifies everything by reducing complexity and lowering costs, which will accelerate the development of cellular connectivity for IoT. We’re still competing with technologies like Wi-Fi, Bluetooth, and Sigfox, so this change will provide greater choice and flexibility for those operating IoT services where connectivity is crucial. I believe the speed of adoption will largely depend on device makers adopting a global approach. We need partners and potentially bootstrap solutions to ease implementation.
At Transatel, we’ve been working with all UICC standards. We’ve seen how challenging it has been for operators to switch mobile approaches, often leaving a small portion of their fleet with their previous supplier, causing dissatisfaction. Hopefully, this new standard will be much more efficient, allowing operators to switch their entire fleet seamlessly.
However, we still need to finalise the work on defining the standard, as we currently only have pre-standards. We’ve already carried out several deployments using pre-standards but it has been problematic. With the new IoT SIM, we need to complete the formalisation of the standard so it’s truly comprehensive. At present, we’re in an intermediary stage. Once the standard is fully operational, the whole industry will need to be informed. Currently, not everyone in the industry is fully aware. At Transatel, we dedicate significant time to evangelising and explaining the benefits and differences of this new approach. While people are receptive, we need the GSMA, or the responsible organisation, to finalise and define everything quickly so we can fully leverage this superior standard.”
The impact of the new specifications on IoT device development
Michel Zwijnenberg – Melita.io: “Will IoT devices like routers and video cameras continue to rely on consumer eSIMs, or will IoT eSIMs become more prevalent, particularly for low-power devices? We know that many of them still rely on consumer eSIMs as a workaround.”
Javier Gonzalez Velazquez – 1Global: “One thing that device makers need to be cautious about when using consumer eSIMs in IoT devices is that operators may block them. If you aim to create a global device, like Dell’s example, you must ensure that the device can be used in any country. However, in many countries and regions today, consumer eSIMs cannot be used in IoT devices. Even if you install one in a router, the mobile operator may block it because the plan provided is intended for smartphones. This is why caution is necessary.
With the new specification, mobile operators, MVNOs, or MNOs can use the same platform, eliminating the need for platform changes. However, the eSIM operating system for consumer IoT must be different, which necessitates a separate data plan and a different chip. I believe that in the future, IoT connectivity will be separated from consumer connectivity.”
Kushal Shah – BT Wholesale: “Device compatibility is also important. The new specifications allow for a much broader range of devices. These specifications have made significant advancements, enabling a variety of low-power networks and devices to be compatible and, therefore, interoperable. As we forecasted, and as many analysts projected, the adoption of low-power devices depends on these specifications. They are critical in driving the usage of low-power devices. Consequently, these use cases will come to life thanks to these specifications.”
Addressing the low-power devices
Michel Zwijnenberg – Melita.io: “Let’s focus on low-power devices, which present unique challenges, particularly when battery-driven. These devices often wake up infrequently, such as once a week or month, limiting the time for interaction. Do you think the new standard will enable remote profile management in the field for these devices, or will profiles need to be pre-installed during manufacturing, with limited switching possible later?”
Jacques Bonifay – Transatel: “The main challenge for low-power devices in regions like Europe, where roaming SIMs are common, is the cost of switching networks. Typically, these devices are unlikely to switch networks frequently, perhaps only once, if at all, during their lifespan. In contrast, high-bandwidth devices, which use several gigabytes of data, have a clear incentive to optimise costs and renegotiate terms. For low-power devices that consume only a few megabytes per month, the concern isn’t the price per gigabyte but rather the SIM fee. Although SIM fees are relatively low, the cost of switching networks can sometimes outweigh the savings, making it uneconomical to switch.”
Kushal Shah – BT Wholesale: “The BT network in the UK, for example, is planning to close the 2G network by the end of the decade, so there are legacy devices on that network that need to be switched. Low-power is an option, but it’s expensive to implement. However, we will need to make that transition for a lot of our customers who are on those networks, and the business case has to work over a long period. Often, those use cases will involve deploying devices for the next 10, 15, or 20 years, or whatever the case may be. I believe it only makes sense and becomes cost-efficient when viewed from a long-term perspective. These specifications will allow those devices to be deployed now with much more certainty about the future – about where those devices are going, how they’re going to be maintained, and the cost of maintaining them, etc. As a result, those business cases will be much more viable.”
What to expect from device manufacturers?
Michel Zwijnenberg – Melita.io: “What advice would you give a module manufacturer redesigning their modules for worldwide deployment, considering the standard isn’t fully complete yet?”
Jacques Bonifay – Transatel: “I believe the standard is sufficiently developed to be implemented. While you need to stay slightly ahead, I don’t think implementing the standard now poses a significant risk.”
Javier Gonzalez Velazquez – 1Global: “I would advise them to wait until they are fully certified, which is expected to happen in December 2024. As a device maker, I want to ensure there are no barriers for my customers, enabling them to deploy these devices seamlessly. Often, opportunities are lost because deploying these devices, with all the logistics, SIMs, and other requirements, is too complicated. Simplifying this process will help you sell more as a device maker. You’ll want a single SKU – a device that works everywhere.
We are already providing samples to some device makers, but mass production will begin at the start of 2025. So, they need to start testing now and plan how to integrate everything.”
Kushal Shah – BT Wholesale: “I’d say the testing phase is crucial and takes time. They could start testing now in anticipation, allowing them to implement proof of concept tests and be ready to deploy as soon as the certification is complete.”
Pablo Iacopino – GSMA Intelligence: “There is a very complex value chain, and there are so many different stakeholders, all of whom come with different objectives and perspectives. I believe SIM technology providers are the key stakeholders with the power to lead and influence. Customer education is crucial. In IoT use cases across various industries, there are examples of companies successfully implementing eSIM technology. Are they satisfied with the experience? Yes, they seem to be. So, why aren’t similar companies adopting eSIM? Is it due to a lack of awareness or budget constraints? Bridging this awareness gap through customer education is something the industry needs to prioritize, regardless of technical capabilities or specifications. Ultimately, enterprises want to see tangible benefits.”
Opportunities for MVNOs in the IoT space
Michel Zwijnenberg – Melita.io: “What do you think the journey will look like for a traditional MVNO focused on serving end customers – to switch, move, or expand into a new vertical like IoT? Or should an MVNO focus solely on IoT to succeed in this area?”
Jacques Bonifay – Transatel: “The key difference between a traditional MVNO business and the IoT business lies in scope. A traditional MVNO business is typically country-specific. For example, you might be an MVNO in the UK, France, or Belgium. Perhaps you operate in two or three countries, but it’s very rare to see one active in 20 countries. You have exceptions like Lycamobile, but even Virgin Mobile wasn’t in that many countries. Usually, you build critical mass in your country, and that keeps you busy.
The IoT business, however, is global by definition. It requires a completely different mindset and approach. While there is some overlap – like managing SIM cards, similar technologies, CDRs, and sometimes even SMS or voice services for use cases like automotive – the businesses are fundamentally different.
When we made the switch at my company, we were focused on the MVNO business, but we decided to pivot towards the global IoT market. The key decision was to invest in our core network and become a full MVNO in France. This allowed us to obtain a 901 mobile network code and secure roaming agreements with mobile operators worldwide. With this infrastructure in place, we had the foundation to become a global IoT MVNO.
It wasn’t an easy path – it was a long and challenging process. Many companies in IoT don’t operate as MVNOs themselves but instead rely on third-party IMSIs from global providers like mobile operators or Transatel.
Ultimately, the question is about your business focus. Do you want to operate in two distinct sectors? While there may be some shared elements, the level of synergies between traditional MVNO and IoT MVNO businesses is relatively low.”
Pablo Iacopino – GSMA Intelligence: “From my perspective, I’d say there’s a trade-off between a horizontal approach and a vertical approach. A horizontal approach involves providing solutions that can be applied across all industries globally. In contrast, a vertical approach is tailored to a specific industry and its use cases.
I don’t think it’s as simple as saying one is better than the other – both are valid strategies. However, in my opinion, if you’re a new MVNO targeting the IoT market, prioritise the vertical strategy. IoT is incredibly broad, and there’s a significant risk of getting lost if you adopt a horizontal approach. By focusing on a vertical market, you’re more likely to succeed.”
Javier Gonzalez Velazquez – 1Global: “I agree that a vertical strategy offers a lot of opportunities for MVNOs, particularly within a single country. You don’t necessarily need to operate globally. One of the key reasons for success as an MVNO in your own country is that you thoroughly understand a specific market or niche where you can add real value.
This same principle applies to IoT. If you identify a vertical within IoT where you can offer genuine value and have a deep understanding of the devices and industry needs, you’re likely to succeed. The advantage now is the increasing availability of devices equipped with eSIMs, much like how consumer devices today come with built-in eSIMs – whether they’re Apple or Android. In the IoT sector, we’ll soon reach a point where the device specifics don’t matter as much, and the focus is solely on providing connectivity and value within a vertical.”
Kushal Shah – BT Wholesale: “If you’re a traditional MVNO considering IoT, for me, it’s a no-brainer. You’re looking at a market that continues to grow significantly and will do so for the foreseeable future. There are plenty of opportunities on the horizon, and tapping into IoT could be crucial for ensuring your business’s sustainability and growth.
That said, it’s important to prioritise verticals. Evaluate the market opportunities, assess where you can provide value, decide which verticals to focus on and build a solid business case around them. IoT presents a compelling opportunity, and with the right strategy, it can be a key driver of growth.”
Key Takeaways: The new eSIM IoT specifications, introduced in 2023, are still awaiting their final version. Device manufacturers are currently in an intermediary stage, preparing for their implementation in upcoming devices. These new standards are expected to streamline many processes, prompting rapid adoption by device manufacturers. However, the eSIM value chain remains complex, meaning implementation extends beyond just the manufacturers. Further education for all stakeholders is essential.
Importantly, the new standards will unlock numerous use cases, making the IoT business more appealing not only to current players but also to new entrants. MVNOs, known for their agility and close customer relationships, are well-positioned to develop innovative business models and meet customer needs effectively. To fully capitalize on upcoming opportunities, MVNOs should focus on delivering comprehensive services beyond mere connectivity. As the new standards take hold and more case studies emerge, the IoT sector is poised for growth – a market MVNOs cannot afford to overlook.
