eSIM is the future of mobile according to SIM Local head of eSIM strategy Gary Waite
eSIM is already revolutionising mobile. It has made connecting everyday mobile devices much easier and quicker.
It has enabled new smaller device categories, such as smart-watches and fitness trackers.
It has opened avenues of universal connectivity for laptops and has raised the bar on the potential for IoT.
But what is really exciting about eSIM is that it unshackles mobile network operators (MNO’s) from their traditional national boundaries, allowing them to provide services far beyond that, and leverage their brands on a global scale.
Thanks to sponsorship of major sporting teams, events and ubiquitous exposure on international media, MNOs are already among the most visible brands in the world today.
However, even the largest MNOs have a customer-base limited to no more than a dozen countries of operation, whereas other equally recognisable brands such as Coca Cola, Nike and Apple see their products available everywhere.
So, why are MNOs so constrained?
Well, there are two barriers at hand, and both are resolved with eSIM.
The SIM Card – Geographically Limited
The first barrier is the physical nature of the SIM card itself: a physical token attached to a digital, region-specific product.
Consider an MNO operating in any country today. To get connected, its customers must buy a SIM card from one of the MNO’s retail outlets in that country or wait for a SIM card to arrive in the post.
Neither method is ideal for the customer, but both are perfectly feasible and accepted as the norm.
It would simply not make sense for an MNO to set up distribution models outside its border, nor for customers to travel to another country to purchase a SIM card.
The current model has worked for decades, but it places a huge barrier on natural expansion by limiting MNOs to their national boundaries.
Roaming Charges – A False Economy
Digital mobile technology has had international roaming capability built in from the start and subject to commercial roaming agreements between MNOs operating in different countries, customers can travel abroad and still enjoy mobile service without having to change their handset or SIM.
The barrier lies with the commercial roaming agreements themselves. MNOs view international roaming as an important revenue stream – charging a premium on calls and data used abroad versus what the customers pay at home – and as a result, many customers, particularly those on Prepaid contracts, make alternative arrangements when travelling.
Rather than focusing on the extra revenue from the small percentage of customers that do roam, MNOs may want to instead concentrate on the much greater revenue opportunity available from those that actively avoidroaming. And in doing so, those MNOs pave the way to gain new customers from abroad via brand expansion.
eSIM brings the Solution
eSIM, being entirely digital, solves the first barrier immediately. No need for the customer to visit a retail store or wait for a SIM card to arrive by post. eSIMs can be digitally downloaded to new customers within a few seconds after sign-up, no matter where they happen to be on the planet.
The second barrier is solved with just a little bit of new thinking.
MNOs will need to agree commercial arrangements with a network of MNOs in other countries, all with the end-customers’ interests at the heart of the deal – removing the spectre of premium pricing and allowing genuine choice.
Then, as an initial step, MNOs can offer a global solution for their own travelling customers, with those customers never realising they’re on other MNO networks at all. A number of MNOs have already taken this step and many more are expected to follow.
The next and final step – the ultimate prize for MNOs – is a seamless experience for customers anywhere in the world to engage with their mobile network of choice; the network that they see on the screen day after day no matter where they are in the world, that they see their heroes endorsing, or have recommended to them on social media. In short, the network that is the global brand that they love.
The eSIM revolution should herald the arrival of the network global mega-brands. Who will be the winners? Well, you probably know them already.
Gary Waite is head of eSIM strategy at SIM Local, which has both a B2B offering and retail presence