eSIM: Transforming Consumer & IoT Markets
eSIM: Transforming Consumer & IoT Markets
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Contents
1. Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
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Executive summary
The process of activating a connectivity subscription is undergoing digital
transformation, as consumer and IoT products come to market equipped with
embedded SIMs (eSIMs). The embedded technology and associated endtoend
architecture make it possible for customers to quickly activate their devices remotely,
at their convenience, from any location and at any time. The capability is not only a
breakthrough for customers; it also simplifies logistics and manufacturing and
introduces opportunities for stakeholders across the ecosystem to innovate and
create new use cases, new ways of interacting with customers, new business models,
and new revenue streams.
The industry does not doubt that eSIM will be successful: The technology has
established a firm foothold in the market, and its deployment is building momentum.
There is also no doubt that the market will be highly competitive, given the central
role eSIM activation and eSIM lifecycle management will play in connectivity service
enablement. The prevailing questions now are how quickly will eSIM take off and
which companies will be best positioned to take advantage of it. Stakeholders will
need to accelerate their involvement if they want to grasp eSIM’s advantages and gain
the competitive positioning that can come with early entry into burgeoning systems
and services.
The purpose of this paper is to discuss how eSIM is changing the service activation
process and paving the way for new business opportunities in consumer and IoT
ecosystems. Stakeholders that stand to benefit from the technology include individual
consumers and enterprise IT departments; mobile network operators (MNOs); device
manufacturers and module makers; vendors supplying embedded Universal Integrated
Circuit Cards (eUICCs) that are deployed in enddevices; and providers of serverbased
eSIM management solutions. This paper will cover opportunities for these groups; the
impact of eSIM technology on logistics and manufacturing; and various ways eSIM will
spur innovation. Applicable industry standards are summarized in an appendix.
Buys
connectivity
subscription
Consumer Device
devices manufacturers (OEM)
Buys eUICCs
to be embedded
Mobile Network
in devices
Operators (MNO)
Downloads eSIM
profile on the
right eUICC
eUICC vendors
eSIM management
soluon providers
Buys connectivity
subscription
eUICC vendors
eSIM management
soluon providers
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At-a-glance: eSIM terminology In the consumer model, the profile is downloaded
by the end user and requires a human
eSIM (embedded SIM): The SIM hardware that interaction. In the IoT context, the device is
is permanently embedded in a device during the preloaded with an operator eSIM profile and
manufacturing process. The eSIM term is also then selected by the manufacturer to initiate
used generally to describe the overall end-to-end bootstrap connectivity.
architecture and services the technology
enables. eUICC (embedded Universal Integrated Circuit
Card): A term used to describe an operating
eSIM profile: The eSIM profile comprises data system (OS) and software, combined with the
pertaining to a mobile operator, including eSIM hardware, which enables a device to be
credentials and data related to a subscription. configured and managed via a remote
Profiles are remotely downloaded to the eUICC connection. An eUICC can accommodate
of the device. multiple profiles. While the eUICC is an integral
part of the device, the profile remains the
property of the operator.
1
eSIM: State of the Consumer Market and the Road Ahead, GSMA Intelligence, March 2021, pages 6, 7, 28.
2
eSIM Moving Up the Agenda: From Industry Work to Customer Adoption, GSMA Intelligence, June 2020, page 21.
3
Pablo Iacopino, GSMA Intelligence, June 23, 2021.
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Focus on consumers: The shift from a
physical to digital user experience
eSIM technology gives consumers a local MNO to avoid roaming fees; MNOs can also implement
the ability to remotely and the local service can be set up easily advanced security features, in
seamlessly self-provision their too, for example, via QR codes conjunction with eSIM, to
network service on their devices. posted in local markets. streamline and secure the remote
The advantages that come from onboarding process. For example,
these capabilities are significant. As the market builds and end users operators can combine eSIM
Customers do not need to go to become familiar with remote technology with digital identity
their service provider’s store to set activation via eSIM technology, they verification to identify customers as
up their subscriptions. Instead, are likely to adapt quickly to its they set up their accounts. The
customers access the website of the conveniences. Presently, however, combination of these methods
MNO to subscribe and activate an just 20% of consumers are aware of ensures security and avoids fraud
eSIM. The activation can be done it, according to GSMA Intelligence.4 while fulfilling “Know Your
via the device itself (through an To scale customer adoption, MNOs Customer” (KYC) regulations.
application or the website) or with a and device manufacturers will need MNOs can also use this security
laptop or other device. The to craft communications strategies infrastructure to offer new value-
activation software immediately that educate consumers about the added services to their customers.
displays available plans and service benefits of eSIM and encourage use For example, MNOs could provide
offerings to the customer. By of the technology. their customers with a carrier
following a few simple prompts, the application that will allow them to
user can select a service provider, Rethinking the MNO- go through a simple and convenient
complete the set-up, immediately Customer Relationship onboarding journey, from product
activate their service remotely, and catalogue display to payment,
customize their services. They can Relationships with their customers identity verification, and eSIM
do this at any time and from often differentiate service providers activation. As eSIM allows remote
anywhere in the world. in competitive markets. As the shift activation, MNOs could go further
to eSIM accelerates the digitization to enable end-to-end digital
Customers are also expected to of the customer onboarding customer onboarding.
establish synergies between process, MNOs gain new
multiple devices or multiple users. opportunities to transform their eSIM will also generate stronger
For example, they can affiliate all the interactions with customers and customer “stickiness.” The dramatic
devices they use, such as their better-personalize their services to simplification of linking multiple
smartphone, smartwatch, and other optimize the customer relationships devices to a customer’s
products, to the same account. They in a fully remote context. The key is subscription, for example, should
can remotely connect and manage to make sure the digital user help increase customer loyalty and
subscriptions for multiple users— experience is as good, or better, reduce churn. This will also help
such as family members—via a than it was in-store. Employees will increase the number of devices on
single contract. They can modify also need to be trained in eSIM the network, which will increase
their settings and accounts at any technology and its impacts on the cellular data traffic.
time. A particular benefit, when customer journey in case customers
travelling, is the capability to want assistance in the activation of
instantly activate connectivity with their connectivity subscriptions.
4
eSIM: State of the Consumer Market, page 26.
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eSIM transforms logistics and
manufacturing
eSIM technology transforms the Device and module installation eliminates the
logistics of service enablement, SIM manufacturers have more traditional SIM-card tray, making it
distribution, and product options for consumer and possible to build end-product
manufacturing, making these designs that are smaller and thinner,
processes easier for MNOs, device
IoT designs such as smart watches and smart
and module manufacturers, and rings. Security improves, because
Traditional SIM card technology has
eUICC vendors. eUICCs can’t be removed. Also, the
complicated the manufacturing and
ability to seal eUICCs within
distribution of end-devices because
For MNOs, a revolution in the cards are network-specific and
devices can help companies build
distribution and profile devices that are dustproof and
designed for manual installation and
management waterproof.
removal. The limitations are the same
whether a device is a consumer
eSIM technology dramatically Strategic considerations for shifting
product, such as a smartphone or
streamlines logistics for MNOs. It to eUICCs: Companies that
tablet, or an IoT device, such as a
does away with the need to manufacture consumer devices will
smart meter or drone.
distribute physical SIM cards to get the most advantage from eSIM
customers or device partners (so benefits, and reduce costs, as they
eSIM technology alleviates these
there is one less component to evolve away from dual-capability
issues because eUICCs are
purchase and manage), and it products—which contain both a SIM
network-agnostic. They are all
replaces the material inventories and an eUICC—and shift to eUICC-
essentially the same at the time of
with a digital profile management only designs. In the coming years,
installation and until an operator
technique. Now, eSIM profiles can manufacturers serving the IoT
profile is downloaded remotely and
be managed and changed market will likely decide that they
stored in the eUICC. The flexibility
dynamically, reducing costs, can offer MNOs, consumers, and
simplifies the manufacturing
complexities, and delays. MNOs can enterprise IT departments the most
process for device and module
modify profiles up to the last minute convenience by going straight to
makers, whether they are creating
before the profiles are downloaded eSIM technology by implementing
connected products for consumer
to a device. eUICCs (only) in their devices.
or IoT markets. They can design
end-products for worldwide
The ability to change or adapt profiles Because the eUICC is a new element
distribution, all using the same
also introduces opportunities to for manufacturers to consider for
eUICC solutions.
personalize and customize profiles. both consumer and IoT designs,
For example, an MNO can offer manufacturers will want to select their
eSIM technology also allows more
consumers opportunities to eUICCs carefully. Along with price
design options because the eUICC
customize their PIN codes. MNOs considerations, manufacturers must
is directly soldered onto the circuit
can also personalize services for their ensure the eUICCs they select are
board, which takes up less space on
partners—and generate new revenue certified and qualified by GSMA. They
a device. Component
streams—by dynamically assigning should also consider eUICC suppliers’
manufacturers that provide cellular
and customizing profiles for affiliates, relationships with service providers:
modules to OEMs can integrate the
mobile virtual network operators Suppliers whose eUICC solutions are
eUICC into their modules prior to
(MVNOs), as well as “enterprise” trusted and qualified by Tier 1 MNOs,
shipment, which simplifies
customers, for example, with the for example, have been accepted and
deployment for end-device
selection of a vanity number. proven in the market.
manufacturers. The soldered
5
eSIM Moving Up the Agenda, page 14.
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eSIM will spur innovation to create
new use cases, new business models,
and new revenue streams
eSIM introduces new opportunities MNOs will be able to upsell and partnerships to streamline
for innovation. Participants across cross-sell multiple plans to their end connectivity for vertical market use
the ecosystem can use the users and introduce new, value- cases, such as smart meters,
technology to create new use cases, added services. For example, MNOs connected health devices, and
new business models, and new could use the technology to bridge others. They will be able to leverage
revenue streams. gaps between their consumer and the “root of trust” eUICCs provide,
IoT services businesses to become in conjunction with IoT SAFE, to
MNOs can transform their connectivity providers for all their ensure a high level of security
offerings and expand their clients’ devices, from smartphones protection for data
partnerships to non-phone products such as communications.
wearables, household devices, and
For MNOs, eSIM introduces a automobiles. MNOs could offer For eSIM to have its greatest
profound shift in how services are their own company-branded effects, however, the technology
enabled. MNOs can take advantage devices, device management must be available throughout the
of the capabilities to transform their platforms, and cloud services to industry. While most Tier 1
service offerings and expand their build end-to-end offerings for operators have implemented eSIM
business partnerships. enterprise IoT customers. They architecture, many Tier 2 and Tier 3
could build cross-industry operators have yet to deploy the
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Conclusion: Prepare now
to succeed with eSIM
eSIM technology is established in the market and
poised for growth. Adoption to date has been driven
by the consumer segment and is beginning to scale.
IoT deployments have found traction and offer
substantial longterm growth potential. Given the
central role eSIM will play in service enablement, the
technology will impact players throughout the
ecosystem. The technology will transform the
customer’s service activation from a physical process
to a digital experience. It will make distribution
logistics and manufacturing easier and spur new use
cases, new ways of interacting with customers, new
business models, and new revenue streams.
Stakeholders that stand to benefit from the
technology include individual consumers and
enterprise IoT departments, MNOs, device
manufacturers, eUICC vendors, and eSIM
management solution providers. Competition is
expected and new entrants are likely to emerge in this
ecosystem. Given the expected growth and
opportunities, participants should consider
accelerating the transition to eSIM so they can
harness its advantages and increase their chances for
success in this new market.
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Appendix: Key eSIM specifications
for consumer and IoT products
Working closely with service SGP.24 Compliance Process details SGP.16 M2M eSIM Compliance
providers and vendors across the compliance requirements and provides the requirements for
mobile ecosystem, the GSMA has details for demonstrating demonstrating and declaring
developed a family of eSIM compliance for consumer products. compliance of M2M products or
specifications for connecting and The requirements focus on security services. The specification also
securing consumer and IoT (M2M) assurance, functionality, and covers security requirements
devices. Industry alignment around interoperability. The specification required for compliance. It includes
these specifications has helped includes templates for declaring templates for submitting proof of
avoid fragmentation to ensure compliance to GSMA once an eSIM compliance to GSMA once a
interoperability of different product has proven compliance via product has proven compliance via
operators’ remote provisioning test or certification. testing or certification.
methods. The specifications also
ensure that smaller operators, Specifications for IoT Potential Convergence of M2M
manufacturers, and solution (M2M) Solutions and Consumer Specifications
providers can have equal access to
market opportunities. SGP.01 M2M eSIM Architecture: Some in the industry are interested
This specification ensures simple in the possibility that GSMA’s
Specifications for and seamless network specifications for M2M and
Consumer Solutions authentication and access for all consumer markets might merge to
types of connected machines that provide a single eSIM specification
SGP.21 eSIM Architecture comprise the IoT. The specification that would work on any device or
Specification V2.0: This defines a common architectural any network, regardless of the
specification focuses streamlining framework that enables the remote application. The GSMA is
authentication and network access SIM provisioning (RSP) and monitoring this and assessing the
for devices used in the consumer management of the eUICC in need in the ecosystem for
market. It defines an architectural devices that are not easily reachable harmonization into a single
framework for remote SIM for setting up a subscription. It specification.
provisioning of devices and eUICC facilitates remote provisioning of an
management. The framework initial operator subscription and
provides the basis for ensuring subsequently changing a
global interoperability of remote subscription from one operator to
provisioning between mobile another. The architecture’s
operators under different technical specification (SGP.02
deployment scenarios. The eSIM Technical Specification) and
architecture’s technical test specifications (SGP.11 eSIM
specification (SGP.22 eSIM Test Specifications) are provided via
Technical Specification) and test this same link.
specifications (SGP.23 eSIM Test
Specifications) are available via this
same link.
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