October 8, 2015

How Will e-SIM Cards Change the Way Service Providers Deliver Mobile Services?

The e-SIM is coming, and service providers need to make sure their BSS/OSS can handle instant changes to mobile plans, number porting and keeping track of the entire number management lifecycle.

Traditional SIM cards are critical components of smartphones, containing information such as subscriber services, as well as data used to identify and authenticate devices onto the mobile network. SIM cards also store contact information and other personal details and are integral components for allowing subscribers to roam onto other networks while traveling, add new products and services to their accounts and, ultimately, switch to another carrier entirely if they desire.

Recent moves to create an electronic or embedded SIM (e-SIM), essentially a virtual version of a SIM card, hold both promise and challenges to the mobile industry and are seen as both a massive step forward in features and functionality for customers and a disruptive force for service providers. 

Already today, we see examples of e-SIM use within M2M settings. In February 2014, U.S. carrier T-Mobile announced an e-SIM for M2M communications between the U.S. and Canada to give customers local data rates within each country.

With billions of devices forecasted within the Internet of Things, including M2M applications, e-SIM capabilities will be extremely valuable to lower overall costs associated with cellular connectivity and to create more attractive data bundles for customers.

There are also major opportunities to be had with e-SIM at the consumer device level. But to get there will require a major effort from standards groups, device manufacturers and service providers. 

Advantages to Mobile Subscribers

With its focus on customers, Apple has taken the lead in the e-SIM space by introducing its own SIM within the Wi-Fi + cellular version of the iPad Air 2 and iPad Mini 3. The Apple SIM gives customers in the U.S. the ability to select short- or long-term data plans from AT&T, Sprint and T-Mobile. When traveling abroad, subscribers can very easily select a cellular data plan right from their device to get and stay connected in more than 90 countries, giving them choice and flexibility depending on their needs.

Other than this example, subscribers today are still reliant on physical SIM cards, but that’s expected to change by 2016 with the introduction of new devices that will natively support e-SIM functionality. This will provide consumers the option to switch providers and plans without having to request a brand new SIM card—a process that can often take a long time and in some instances include a subscriber’s fee.

This architectural change will also bring changes for subscribers. With data embedded onto the SIM, theoretically it should be faster to switch carriers by porting a number to a new account and for subscribers to upgrade their account from a pre-paid or a pay-as-you-go plan to a contracted post-paid plan with minimum disruption. It should be instantaneous and as easy as a phone call or entering a number onto the device itself. An e-SIM card should also make it easier for subscribers to upgrade their service plans and roam onto other networks without the current practice of carrying multiple SIM cards and switching them out as needed.

And while subscribers will reap a number of advantages to this new device architecture, getting to this point will require overcoming several challenges and obstacles.

Operational Challenges of e-SIM

While e-SIM does not currently exist within smartphones, the capabilities will likely roll out in 2016, and when that happens operators must be ready.

Provisioning will likely be a key topic of conversation with regard to e-SIM. The GSMA recently added “Profile Interoperability” to its solution for remote SIM provisioning for M2M, which works with both e-SIM as well as traditional SIMs. This means that operators will be able to ask a SIM vendor to create a SIM profile for them, which can then be downloaded to any compliant eUICC (a SIM card that supports remote provisioning). This capability was not available previously and will make it much easier for remote SIM provisioning, allowing operators to do this at scale. This will eliminate the need to replace SIM cards, which can be extremely difficult in M2M settings, and will make it easier for customers to switch from carrier to carrier.

These capabilities exist today in the burgeoning M2M space and eventually will spread to the consumer market.

Opportunities for Operators

Naturally, operators are worried that mass adoption of e-SIM functionality will make it much easier for customers to churn to the competition. It’s a valid concern, given that customers will be able to switch carriers almost instantly, however, it will also allow customers to very easily upgrade services (for example from 3G to LTE) and transition from a pre-paid to a post-paid account, which should be seen as advantages for carriers.

In addition, there are massive customer-centric opportunities around e-SIM, such as being able to upsell customers with the promise of a speedier activation and provisioning process, making it much likelier that customers will take advantage of new offers and stick with a service provider that is making strides towards keeping them happy.

Ready for e-SIM

Much of the activity surrounding e-SIM, including a final specification, support from more service providers and buy-in from major device manufacturers, is still in flux. However, all of the pieces are starting to come together with supported devices projected to hit the market in 2016.

With e-SIM likely to cause some disruption to the mobile market, service providers need to be prepared by ensuring their BSS/OSS solutions can handle the ability to instantly make changes to mobile plans, port numbers and keep track of the entire number management lifecycle.

Photo by Texas A&M University Commerce with Creative Commons license


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