The eSIM breakthrough
Kim Juchem, Global Director Wholesale & Software, Truphone, tells us about four ways that eSIM will transform the industry.
“eSIM has always been a theme for us, but until recently we hadn’t had a breakthrough. Then came the launch of the eSIM-only iPhone in the US, which will trickle down to other geographies in the coming months and years. We also saw large operators embracing eSIM, such as Vodafone.”
1. Greener business
“The green aspect of doing green business is so important, especially if you want to attract investment. A lot of the VCs and investment companies out there have sustainability and ecological targets. And an eSIM is a great way to reduce your carbon footprint. You can go from 60g of single plastic with a SIM to 1g with an eSIM. It’s a simple step, but if you really want to be a green brand, you shouldn’t be working with plastic hardware.
“We’re seeing eSIM in a host of consumer devices now, such as Apple Watches, pet trackers, and logistic trackers. The logistic element is pretty well established in the IoT business, too. It’s 100% here to stay.”
2. Everything that can be digitised will be digitised
“Physical plastic SIM will disappear. It's just a question of when. That said, there's still a lot of scepticism because we’ve all worked so well with the plastic SIM card for so long. Operators like it because customers can’t easily switch to an alternative. The SIM manufacturers enjoy the revenue pool of a plastic SIM and device manufacturers rely on the operator channel to sell their devices. So, all these three main players – SIM manufacturers, operators, and device manufacturers – actually like the plastic card. But it’s up to consumers and innovative companies like MVNOs to break through this model.”
3. Digitally distributed connectivity
“Think about all the possibilities that there are if you can digitally distribute connectivity. For a long time, we’ve talked about the Coke can. You could have a unified eSIM QR code on a Coke can that people can scan, and for every six-pack they get a gig of free data. That's just one idea. You could do the same with a McDonald's cup, or on billboards at events like, say, the World Cup. You could put a huge QR code outside of the stadium and all the visitors can download it and get a local card. Of course, you need to take care to know your customers' processes and so on, but it’s an easy yet innovative solution that can be integrated into Android and Apple devices.
“Here’s a real-life example – on eBay in Australia, you can buy a Vietnamese travel SIM via eSIM. You get the QR code, you download the eSIM and you're ready to go.”
4. An impact on prices
“In terms of prices, we know that the cost of devices isn’t coming down, and that’s because eSIM technology is a bit more demanding than just shoving a plastic card into a phone. But think about the total cost of ownership in the lifecycle of a device. You have no warehousing, no physical distribution, easier SIM exchange, and so on. All of this will drive the total cost of ownership down significantly.”
Key takeaway: SIM manufacturers, operators, and device manufacturers all like the plastic SIM card. But it’s up to consumers and innovative companies like MVNOs to break through this model.