eSIM: How to break through the barriers?

Executive Briefing Service, Enterprise Platforms

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Although eSIM technology delivers seamless provisioning and greater flexibility and security – all of which are key to scaling the IoT – adoption has been slow. What should operators do to catalyse a shift towards eSIM in the 5G era?

This report revisits the eSIM (embedded SIM) market, assessing how the market has evolved since STL Partners’ last research on the state of development of eSIM from November 2016. In that report we argued that there were quite few hurdles to overcome for a more robust adoption of eSIM in consumer and IoT cellular connectivity, but concluded that the challenges could be successfully addressed over the next five years:

While there are some interesting short-term niche opportunities such as connected cars, it will take 3-5 years for the technology to mature, costs to decrease, device value-chain and channels to evolve, and user-experience to improve. Operators will deploy the provisioning infrastructure only gradually.

The bottom line? eSIM (or its successors) will likely become mainstream alongside the timeframe for 5G deployments, but not for today’s 4G devices and services….Notwithstanding such developments, the conventional removable, pre-provisioned SIM card still has a long life.”

Following on from this earlier analysis, we are now reassessing whether our initial conclusions have proven true, and where the market will go to next.

Currently, the debate on 5G is extensive and multi-directional, signalling the importance of 5G for mobile communications, as well as the essential enabling role 5G will play for the next evolution of the IoT ecosystem. The combination eSIM and 5G is not often at the forefront of the discussion, but in particular circles the debate on eSIM is living a strong resurgence. As author Dean Bubley predicted in the 2016 report, 2021 could be the year of the wide adoption of eSIM in cellular IoT connectivity, growing hand in hand with 5G and making “the conventional removable, pre-provisioned SIM card” for the IoT just a step in history. Through interviews with interviews with MNOs, MVNOs, adopters of e-SIM based solutions, IoT platform providers, and experts in the field of SIM cards, this research aims to assess the likelihood of this development and understand the market dynamics around IoT cellular connectivity and eSIM.

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Why eSIM is essential to scale cellular IoT

The eSIM is a programmable SIM card, which can be reprogrammed over the air (OTA). The software architecture is securely downloaded in the device and the physical card is fixed permanently in the device. One of the key features of the eSIM is the remote provisioning, which allows customers to change network operators at any instance without physically removing the card. that the result is that the eSIM is not tied to any specific mobile network operator (MNO).

Besides remote provisioning, however, there are a number of other eSIM features and capabilities that are valuable from an IoT perspective.

Designing and deploying an IoT solution is not an easy exercise. The IoT is a multidisciplinary solution that needs to take into consideration two fundamental factors:

  1. The IoT solution is an integration process of various technological components, each with its own challenges.
  2. The business context and the business value should drive the design of the IoT solution.

In the context of these two considerations, the IoT solution should satisfy at least the following criteria:

  • Scalable: to meet the growth needs;
  • Flexible: to adapt the changing market contexts and operating conditions;
  • Adaptable: to limit disruption to organisational practices during implementation;
  • Secure: to avoid disruptions to business critical activities.
  • Tamper proof and theft proof: an eSIM cannot be accidentally broken and/or stolen.


Table of Contents

  • Executive Summary
    • What’s the problem?
    • What should operators do?
  • Introduction
  • The rise of eSIMs for the IoT
    • Reviewing the evolution from SIM to eSIM
    • Why eSIM is essential to scale cellular IoT
    • The rise of alternative technologies: iSIM and NuSIM
  • The current adoption of eSIMs in IoT
    • eSIM value chain: Complex and diverse
    • Complexity is stifling eSIM uptake
  • MNOs role in the future of eSIMs for IoT
    • The adoption of eSIMs in IoT scenarios
    • MNO-led eSIM and IoT ecosystems
  • Conclusion: What should telcos do?

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