This eSIM management technology will have a significant impact on the IoT, as it represents an evolution from physical SIM cards to virtual SIM cards, which will have the greatest impact on its acceptance. Mobile network operators (MNOs), who are well-positioned to play a key role in facilitating the growth of the exploding IoT market, have established a solid and reliable management solution for embedded subscriber identity modules.
Furthermore, MNOs can create new and convenient journeys for consumers using mobile devices. The mobile industry is facing a transformative period in the coming years, especially concerning eSIMs, which have been the subject of new research which sheds some light on how eSIMs will be transformed. An eSIM ecosystem offers the same security and protection that a removable SIM card provides. A public key infrastructure (PKI) governed by the GSMA provides secure authentication of entities of the ecosystem.
The protocols are based on state-of-the-art cryptographic mechanisms and are guaranteed to protect the end user's privacy. There is a GSMA certification process required for manufacturers and providers of eSIM solutions to be admitted into the ecosystem. As a result of the switch from physical SIM cards to eSIM cards, CCS Insight believes that the consumer will have more powerful control over their subscriptions by interacting differently with their network providers.
There are currently only 150 million people worldwide who use eSIMs, compared to 8.9 billion people who subscribe to mobile phones. This study says, however, that all of this is expected to change by the year 2023, despite a very small share of the global mobile market. The CCS Insight study predicts that, as digital-only network connections become increasingly popular, the number of phones with eSIMs will nearly double, from 27% in 2023 to 56% by 2028, as a result of this growing trend. There are more than 150 million eSIM customers in North America, which accounted for more than half of the adoption curve.
According to the report, this is the result of Apple's decision to only provide eSIM-enabled devices since the iPhone 14 was introduced in September 2022. Around the world, approximately 800 operators are supporting eSIM devices.
Kester Mann, CCS Insight Director of Consumer and Connectivity, made the point that removing that small piece of plastic from your phone will improve your digital customer journey, attract new customers, and have environmental benefits as a result of eliminating that little piece of plastic. In addition to praising the roaming benefits of eSIM cards, the report highlights the ability of customers to sign up for cheaper plans before travelling or while travelling using these devices.
While this revolution has many advantages, it also has a lot of limitations, which can lead to a lack of education in this field. CCS Insights conducted a survey in which more than 5,000 people across the UK, the US, Germany, Spain and Australia were asked whether they had heard of the eSIM or not. Only four out of ten had heard of it. There is nothing better than being able to offer a convenient and fully digital user experience to consumers. As a result of this, extra target groups can now be acquired by completely new customer acquisition journeys.
Furthermore, in addition to fostering the development of innovative devices and services, eSIM technology has also played a significant role in the development of more attractive contracts that cover multiple devices. IoT (Internet of Things) is considered one of the fastest-growing sectors of the IoT economy today, and it includes sensors, processors, systems, and platforms used by industries to improve their operational efficiency to compete more effectively.
IoT devices, including sensor modules, logistics tracking systems, and manufacturing equipment, greatly benefit from mobile connectivity and predominantly utilize eSIMs. Embedded Subscriber Identity Modules (eSIMs) significantly simplify the deployment and lifecycle management of these sensors, enhancing efficiency and effectiveness. The management of eSIMs facilitates new, fully digital user journeys, allowing eSIM profiles to be seamlessly installed on devices with minimal user interaction. This convenience is particularly beneficial for activating consumer IoT devices that lack displays, but it also extends to any eSIM-enabled devices, such as smartphones or tablets.
The GSMA eSIM Discovery Service enhances this frictionless customer experience both in-store and out-of-store, providing a streamlined and user-friendly process for eSIM activation and management. The integration of eSIM technology in IoT devices not only optimizes the rollout process but also ensures efficient lifecycle management. This advancement underscores the transformative impact of eSIMs in the mobile market, promoting a more connected and streamlined experience for users across various devices and applications. In conclusion, the adoption of eSIM technology is set to revolutionize the mobile industry and the IoT sector.
With its streamlined deployment, enhanced lifecycle management, and fully digital user journeys, eSIMs are paving the way for a more flexible and efficient mobile experience. As consumer awareness and adoption grow, supported by the robust infrastructure and security provided by MNOs and the GSMA, eSIMs will play a crucial role in shaping the future of mobile connectivity. This evolution promises not only to enhance user convenience but also to drive the development of innovative devices and services, ultimately transforming the digital landscape.
