July 5, 2022

eSIM & eUICC: Where Are We Heading?

I joined more than 100 participants at the 4th annual eSIM forum in Berlin in February. All of us who attended are interested in the cross-industry transformation that is currently taking place due to the introduction of eSIMs. The two day conference was jam-packed with a lot of interesting presentations and plenty of time to network.

Here are my three main takeaways:   

1.  The multiple use of the word eSIM is causing confusion

With eSIM technology the connectivity service profile of the secure identity is separated from the physical chip it is stored on (GSMA M2M eUICC Architecture). As we all know, the physical chip comes in the following current form factors plugin (2FF-4FF) and embedded. When embedded was introduced it got the name eSIM. When the standard for a remotely provisioned Secure Identity was introduced it was also given the eSIM namewith the reasoning that in the future all remotely provisioned Secure Identities will be embedded. But as we are not at that point, this is causing a lot of wasted time spent on miscommunication.  

Even if everyone attending the conference was deep into the topic the terminology was used differently in different presentations. The fact that the function (that a profile can be remotely provisioned) and the formfactor (embedded) have the same name by GSMA, it makes it challenging for everyone launching the solution as it is quite complex to describe to customers.  

We at Tele2 IoT try to distinguish between this by using the following terminology: 

  • eUICC is a chip that can have one or many subscription identities (virtual profiles) downloaded and managed remotely
  • Our eSIM is an eUICC with our subscription (profile) enabled on delivery, but that can of course be changed, which provides freedom and flexibility for our customers. 
  • SIM is aUICC with a Tele2 subscription profile that cannot be changed over time. eUICCs and UICCs come in plug in and embedded form factors 

2. Consumer eSIMs are taking off but challenges remain in creating a smooth customer journey

The consumer eSIM rollout is being fueled by the fact that some large brands are launching global connected products that really benefit from eSIMs. The products leading the way are connected watches by Apple and Samsung, which basically cannot fit a plug-in SIM. Because they are sold globally the eSIM is ideal, enabling the consumer to download their preferred subscription wherever the watch is sold. While not everyone has a connected watch, most do have at least one smartphone. And as the latest iPhone models have eSIM this has made a huge impact on the market.  

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Today more than 100 Connectivity Service Providers in more than 50 countries support eSIMs in iPhones. So, the use cases are there and the demand from the consumers is there. But what are the main challenges? Is the customer journey 100% digitized?

These days a QR-code is the main activation method, although the consumer activates the device via the code on a physical or digital voucher so it’s not always a fully digital delivery.  

Then there are markets where national regulations regarding fraud require the customer to present proof of identity. This makes it even more clear that operators need to develop Know Your Customer (KYC) processes to fit eSIM. In Sweden proof of identity can be done online as we have a recognized Digital ID (Bank ID), but in markets where this is not available the consumer might need to show up in person with proof of identity before they can activate the service. 

3.  Adoption of eSIM for IoT is still low compared to long-term potential 

The benefits of eSIMs for IoT are clear 

  • Optimized production of connected products (one SKUfor global deployment)
  • Flexibility to swap supplier in a large fleet of connected IoT devices without costly field service

eSIMs also solve the problem of restricted permanent roaming found in some countries. But why has the market not yet taken off?  What are the reasons?  

One issue brought up at the conference in Berlin is that there is an unclear or underdeveloped ecosystem. As an enterprise you would buy eSIMs with an initial connectivity service provider subscription (profile) and that service provider most likely will manage the eSIM swap. If you sign up for a new connectivity offer that connectivity service provider must set up processes or perhaps even integrate their systems with the initial eSIM provider. This all takes time and money, and the business case is dependent on large volumes.  

Tele2 IoT is one of the few providers that actually provides subscriptions (virtual profiles) without costly integration of systems to be uploaded on third party eSIMs. 

But for smaller enterprises the solution could be to buy eSIMs and connectivity from a reseller who has multiple suppliers and manages that part of the supply chain, making it simple for the customer.   

This is a value chain supported by Tele2 IoT, which is now growing fast. The reseller will manage the eSIM and the various connectivity supplier relations and the enterprise customer just has one supplier – the IoT reseller. 

In all, it is exciting times working with transforming the IoT connectivity industry as enabled by eSIMs. It is not only standards and technology we need to take into account, but even more importantly, we need to look into the enterprise customer journey to be relevant and successful. 

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