Innovation & Strategies
Consumers have everything to gain from e-SIM
After a confidential arrival on the connected objects’ market, the e-SIM should widely be used soon. According to Strategic Analytics, in 2022, almost half of the smartphones sold in Europe will be compatible with this technology. What will be its benefits for consumers?
What is the e-SIM?
The e-SIM (or virtual SIM) is a chip embedded into the terminal which enables the person to connect to the cellular network of an operator. To access this network, the user must download an e-SIM profile provided by his operator. This profile contains all the information related to his mobile plan and replaces the physical SIM card. To change operator, you just have to download a new e-SIM profile.
Numerous benefits for the clients
A facilitated subscription
Subscribing to a mobile line becomes entirely digital. After ordering online, you no longer need to wait for your SIM card to be shipped to start using your plan. This subscribing simplicity is also a risk for the operator. It allows you to change your mobile plan in a less cumbersome way. It entails then a risk of generating an increased competitive pressure on already highly competitive markets.
Miniaturization of terminals and development of the Dual SIM
Due to the small place used on the terminal compared to a SIM card holder, the e-SIM enables the manufacturers to offer thinner devices, more than ever.
It also allows the terminals to hold several SIM at once: it is notably the case of the latest iPhones embarking a slot both for a physical SIM and for an e-SIM. The customer may then use several mobile lines on the same device.
We could tomorrow very well imagine telephones with 3 embarked e-SIM . This would be particularly useful when travelling abroad or for those who have both a professional and a personal plan.
Furthermore, mutualizing the usages runs the risk of accelerating the declining sales of the terminals. No more need of a device per plan.
Finally, having at one’s disposal several SIMs may develop new opportunistic behaviors. A user could tomorrow combine the best voice plan of the market to the best data plan. He will then create for himself the plan matching his needs perfectly with the best value for money.
e-SIM highly reduces logistical constraints to distribute connectivity. Consequently, the number of virtual operators (MVNO) may surge. For consumers, it means an even larger choice of mobile plans, including when travelling abroad.
From the mass market point of view, e-SIM only has advantages. However, by facilitating subscription, thus making the change of operator easier, it will increase competitive pressure between operators. It may well put Telcos’ business at risk.
Innovation & Strategies
by Lou CHEVREUX the 24/02/2019Read more