Anyone involved in the Internet of Things (IoT) and M2M communications sectors is well aware of the growing ambition and investment surrounding the Embedded Universal Integrated Circuit Card (eUICC), commonly known as the eSIM.
A 2017 report from IHS Markit estimated eSIM shipments would rise from 109 million in 2016 to 986 million by 2021. Much of this growth is expected to be driven by continued IoT development, with eSIMs playing a central role in connecting billions of devices worldwide.
The automotive industry is a prominent example of a sector eager to adopt eSIM technology. As connected vehicles become mainstream, eUICC-compliant eSIMs offer manufacturers opportunities to simplify logistics and reduce costs.
Beyond automotive, the eSIM is being promoted as the next evolution of the SIM card. Vendors, operators and service providers are testing eSIM-based edge solutions to secure positions across the expanding cellular, IoT and device connectivity markets.
There is strong optimism about eSIMs, based largely on benefits highlighted by the IoT telecom sector. But is there a gap between the perceived advantages and the current reality of eSIM deployment?
Perception
The most often-cited advantage of eSIM technology is improved provisioning.
Conventional SIM cards are provisioned with a single mobile network operator (MNO) profile that cannot be changed without physically replacing the card. While that is acceptable for personal mobile phones, it creates significant cost and logistical challenges for IoT customers managing thousands or even millions of remotely deployed devices across wide areas over many years.
eUICC-compliant eSIMs aim to change that by enabling over-the-air provisioning. These embedded cards can host multiple, changeable operator profiles and can be updated remotely without physical access. In theory, customers could switch carriers frequently based on factors such as connectivity quality, resilience, customer service SLAs and data pricing.
This capability has major implications for enterprises with large-scale IoT deployments. Embedded eSIMs reduce the cost and logistical burden of manual SIM replacement and network changes, and can maximize device uptime by allowing devices to connect to the best available local network.
Manufacturers and operators can also benefit. Devices equipped with eSIMs can ship ready to activate, potentially simplifying supply-chain logistics and eliminating the need for local device setup regardless of deployment location.
Promised benefits such as stronger negotiating power with cellular providers, simplified management and reduced ongoing operational complexity explain why many IoT customers are attracted to eUICC-compliant eSIMs.
However, despite these advantages, the current eUICC specification does not yet resolve all IoT challenges.
The gap to eUICC delivery
While industry conversation has emphasised the potential benefits for businesses, there are several commercial and technical hurdles that must be addressed before eSIM adoption can reach its full promise.
Commercial challenges: Operators face the prospect of increased commoditisation of M2M cellular data if switching between providers becomes effortless. The core value proposition of eSIM technology is to avoid contractual lock-in, but that outcome does not align with operators’ interests and may not deliver the customer benefits many expect.
IoT deployments can be highly complex. Organisations increasingly depend on reliable transmission of critical business—or even life-critical—data from vast numbers of devices across diverse locations and environments. Delivering and maintaining this level of service incurs costs. While some providers can lower total cost of ownership through specialist services, advanced multi-IMSI routing and 24/7 IoT support, guaranteed data delivery still carries a price.
Moreover, although eSIMs can simplify the technical process of switching providers, contractual obligations and defined procedures will often remain in place and must be followed.
Technology challenges: Significant integration issues remain, particularly around remote provisioning. The industry’s narrative that eSIMs let customers switch suppliers at will overlooks the practical reality: both the outgoing and incoming providers must be integrated at a systems level to allow transfers, and the device must be able to communicate with both platforms.
In practice, both parties need to agree to a transfer and their systems must be connected and compatible to enable it. Based on experience with dynamic IMSI routing and IoT device optimisation, this process is likely to be more complex and time-consuming than many expect.
eSIM standards represent a positive step forward, but there is still work to do before eUICC achieves the transformative impact many predict.
Read more: How eSIM is disrupting the telecoms industry
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