Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this article, Helen Gaden of the MVNOs Series talks us through some of the key findings of a recent report they conducted into the current state of the e-SIM Market.
A year ago, the announcement by Apple that its new iPhone XS, XS Max and XR handsets were to feature an e-SIM as part of a dual SIM configuration was meant to mark a watershed moment for embedded SIM technology. Surely, with arguably the world’s most iconic smartphone brand now embracing e-SIM, the world would see a rush of manufacturers following in its wake, and the beginning of the end for the removable SIM card.
That hasn’t quite happened. One of the reasons is likely to be that e-SIM compatibility is not a one way street. Not only do manufacturers have to take the decision to build hard-wired SIMs into their devices, but operators also have to change the way they provision network services to a device – for example, by adopting means of downloading a user’s subscription profile onto the embedded SIM, rather than just scanning the profile already contained on a removable chip.
Even though Apple, like Google before it with the pioneering Pixel e-SIM phone, has adopted the GSMA’s specifications, the industry has yet to see significant collaboration between OEMs and operators about how remote provisioning might work in practice. This has caused a delay in operators offering e-SIM services that new Apple XS and XR owners can take advantage of, which in turn has probably led to other manufacturers deciding there is no rush to bring their own e-SIM devices to market.
As Andrei Ivanov, Principle Technology Architect and CTO of Canadian telco Telus says, the last 12 months have been characterised by a slow trickle of operators making e-SIM services available for smartphone owners and developing ways to deliver connections. “Initial steps are to make e-SIM available for consumer via a printed QR code mechanism, with a transition to app-based enablement likely in the future,” he said.
Amongst operators, the earliest adopters of e-SIM in the wake of the Apple announcement were international roaming specialists like Truphone and KnowRoaming, which recognised the immediate benefits to their business model of offering seamless connectivity to multiple networks as people travel. Working with Japan’s KDDI, GigSky has since built an e-SIM-based travel solution which is provisioned and managed through an app, as described by Ivanov. In terms of e-SIM services in domestic markets, early adopters include the likes of DNA in Finland, and Indian carriers Airtel and Reliance Jio.
Another operator to launch e-SIM services domestically this year is Sri Lanka’s Dialog Axiata, although its focus has been largely on delivering eSIM M2M solutions for commercial and industrial markets. Lead Engineer Amila Saputhanthri said: “The physical SIM is one of the main drawbacks in IoT solutions. Therefore the eSIM with remote SIM provisioning capability will attract more users sooner than later.
“2G and 3G networks will be shut down [in Sri Lanka] in the near future to minimize operational costs. Therefore future proof technologies such as NB-IoT and e-SIM are expected to be adopted across industry.”
Gregory Gundelfinger, CEO of global e-SIM and connectivity solutions specialist Telna, agreed that e-SIM was enjoying a lot of popularity in the IoT market, but believes it is yet to have anything like its full impact. “E-SIM is an imperative enabler for the future of IoT/M2M, it makes the deployment process simple and efficient,” he said. “This year, Telna has expanded its portfolio with white-list branded e-SIM solutions for business and consumers. It is a catalyst in the market.
“There are multiple innovative IoT use cases coming to market every day and the e-SIM has the power to transform and accelerate these developments.”
In terms of the future prospects for e-SIM, a recent forecast paper from Counterpoint Research predicted that shipments of e-SIM-based devices will reach almost two billion units by 2025, with a CAGR of 27%. It anticipates that most of this growth will be driven by the smartphone and IoT device markets, although it also expects devices like mobile hotspots, routers, PCs and laptops, drones and smartwatches fitted with e-SIM to grow in popularity.
One other interesting observation the report makes is that, despite the GSMA’s work to standardise e-SIM specifications, the majority of connected devices in circulation without a removable SIM currently make use of proprietary software alternatives, collectively known as soft SIM. This is largely down to the size of the soft SIM market in China. The paper’s authors predict that embedded hardware versions built to use the GSMA’s standard will become the norm over the next few years, although it also believes integrated SIM (iSIM), in which the UICC forms part of a larger chipset (system-on-a-chip, or SoC) will eventually become more popular in IoT.
For an in-depth examination of the e-SIM market as a whole, download the free report here.
Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this article, Helen Gaden of the MVNOs Series talks us through some of the key findings of a recent report they conducted into eSIM and the opportunities and challenges it presents for IoT.
The Internet of Things (IoT) is opening up entirely new markets for mobile connectivity, and in doing so is reshaping the mobile industry ecosystem almost from scratch. From mobile phones, tablets and a handful of other gadgets mostly focused on consumer markets, demand for mobile services is now coming from dozens of different industry verticals, for hundreds of different purposes – everything from automated smart appliances in our homes to industrial machinery, connected vehicles and self-driving drones to monitoring systems in agriculture, healthcare, utilities and more.
It is a truly massive economic opportunity for the mobile industry and beyond. By 2025, it is predicted that there will be 25.2 billion connected devices in circulation. With all of them relying on mobile networks to stay on line, the mobile industry will be contributing close to $5 trillion in economic value – almost 5% of global GDP.
The catch is how the mobile industry embraces this opportunity and provides for all these new connections across so many new devices. The emergence of 5G, with the massive increases in network capacity and speed it will bring, will certainly help. But that does not resolve another, perhaps more fundamental challenge – how to provision, authenticate and manage network access for the mass deployment of billions of new devices when traditional mobile ecosystems have been based on a one-connection-per-user model.
That’s where eSIM comes in: to many analysts and observers, the switch from a removable SIM card to a user identification module hard-wired into a device has transformational potential for IoT. By 2025, it is estimated that eSIM will be present in two billion devices, with the proportion of total connections expected to rise steadily. But just how far do the opportunities for this virtual technology reach?
According to IoT solutions specialist Arm, eSIM will pay an integral role in revenue success for IoT, the technology they have called the “trillion device opportunity” for the mobile market. Arm predicts that revenues from IoT alone will be worth $10bn by 2025, but insists that embracing eSIM will be integral to that coming to pass.
So, what makes committed eSIM evangelists like Arm put so much faith in the technology when it comes to IoT? The added flexibility eSIM creates in the relationship between device/client and network provider might loosen the grip operators have traditionally enjoyed on network access, but it also opens the door to many more use cases for mobile technology.
For example, the connected car sector has stood out as an early adopter of e-SIM, with predictions that there will be 250 million connected vehicles on the road by 2020, while the total number of connections is expected to increase by a CAGR of 31%. Major manufacturers like General Motors, Jaguar Land Rover, Renault Nissan, Scania, Volvo, BMW and Daimler have all enthusiastically backed eSIM, partly because of the convenience of being able to embed a single, secure connection module in all vehicles ready to be shipped to any market.
But the connected vehicle sector also underlines the value of flexibility in network connectivity for IoT use cases. Connected cars rely on networks to provide a variety of services to vehicle owners, such as infotainment, real-time navigation, pay-as-you-drive insurance and breakdown services, telematics and diagnostics. With critical real-time services like navigation and breakdown provision, there’s a great deal of value in the subscription modules automatically picking up the best available network connection as the vehicle moves from place to place – especially when crossing international borders. This is of particular concern to the logistics and transport sector where fleet management and asset tracking systems need to be effective everywhere the vehicle or shipment goes.
There is also the potential for different services available in a vehicle to use different types of network according to their requirements, all provisioned through the same e-SIM. For example, while infotainment services like video streaming require the kind of high-bandwidth data services offered by 4G LTE, sending diagnostics and telematics data is much less bandwidth-intensive, and use of low-power networks like NB-IoT would be much more efficient and cost effective. The ability of eSIM to store multiple operator profiles at once opens the door to these kind of flexible choices, meaning network services can be matched closely to specific requirements.
The opportunities and advantages of a highly agile, adaptable connectivity ecosystem extend well beyond vehicle and transport industries. In utilities and agriculture, the use of self-driving drones to monitor pipelines, crops and other assets over large geographic areas offers a similar example. Automated drones require guaranteed connectivity wherever they go, with seamless transition between networks as required. Again, simple observational data such as that transmitted from sensors might be most efficiently carried on IoT-specific LPWAN networks, while streamed video would require 4G LTE or, in years to come, 5G. Goldman Sachs sees the value of the self-driving smart drone market as potentially rising to $100bn.
In manufacturing and industrial IoT, e-SIM is seen as a key enabler of so-called predictive maintenance, the use of predictive analytics and AI technologies to anticipate system issues in advance and take action before outages occur. A step beyond proactive maintenance, which seeks to resolve performance issues in the shortest possible time frame using advanced system monitoring, predictive maintenance promises to push availability, efficiency and performance guarantees to new heights.
The prerequisite for predictive maintenance is exceptionally high and consistent levels of data capture, which according to Arm poses a major obstacle. With the sophistication of modern digital processing systems, it often falls to OEMs to provide maintenance for equipment and machinery as an aftercare service. But their issue is that they ‘lose sight’ of their product as soon as it leaves their factory for the client. With e-SIM, data monitoring and analysis can be switched on instantly, providing a full picture throughout the lifecycle of the product, and with no interruptions even if it moves locations. It is this level of continuous performance data streaming that effective predictive maintenance relies on.
So overall, the widespread adoption of e-SIM gives equipment manufacturers opportunities to innovate with the type of devices they can add value to with connectivity and the range of form factors they can give those devices, including shrinking sizes and improving efficiency. It lets them rationalise product ranges with single designs that can be deployed across a wide range of markets, and it allows them to improve service and maintenance SLAs through predictive maintenance.
For operators, more connected devices across more industries opens the door to new markets and potentially enormous increases in their client base. Yes, e-SIM challenges the one device, one network model around which operators have built their traditional business models, loosening ties with customers and introducing more competition. But that in itself should be seen as an incentive to transition to the more service-oriented business models that best suit B2B markets.
Rather than jealously guarding activation to their networks through their own proprietary SIMs, operators should be encouraged to work in partnership with IoT service providers offering their expertise to support flexible, scalable ‘Network-as-a-Service’ platform models that meet the demands of business and enterprise clients.
Simon Davies is a leading MVNO consultant working at Acqua Telecom. Having worked in the industry for years and specialising in Product Marketing, Sales Management and PreSales, the MVNOs Series caught up with him for a quick Q&A to find out what his predictions were for MVNOs over the coming years.
What are the new/key disruptive technologies shaping the MVNOs industry in the APAC region?
In the short term, I see eSIM technology having a significant impact, both on MVNOs and on the end user:
From the MVNO’s standpoint, eSIM have both financial and logistical advantages. Talking financials, MVNOs can dramatically reduce their expenditure when they shift to the eSIM because the virtual nature of it allows them to curb the stocking and distribution costs associated with traditional, physical SIM cards. Equally noteworthy, eSIMs eliminate the burdensome manufacturing delays that usually come with new SIM batches. For those MVNOs that are involved with ‘low stickiness’ customers, this should have a significant benefit; less so for the MVNOs that have a more long-term clientele. The former includes SIMs aimed at travellers as well as the more classic ‘throw-away’ style SIMs.
From the viewpoint of the end user, their benefits are more straightforward: eSIMs equal an easier user experience by removing the physical SIM and replacing it with a virtual one, consumers no longer need to concern themselves with the often-difficult process of extracting and inserting the SIM into their mobile devices – no more scouring the house for paperclips or safety pins! . This is especially relevant to consumers that want to replace their main SIM with a temporary one for short-term use, a situation in which there is often an ongoing risk of losing their main SIM. Of course, this doesn’t apply to dual-SIM phones.
Moving onto the mid-term there is no doubt that 5G has to be the main focus. It is certainly the most talked about disruptive technology across the globe, and it promises ample opportunities both for MNOs and MVNOs (even if the killer applications have not really appeared yet).
The 5G applications that do look like opportunities – online gaming and interactive video, as well as industrial M2M – are probably already covered by the MVNOs and MNOs and the process is iterative rather than a step change. Nonetheless, nobody can ignore this game-changing technology poised to offer the most striking opportunities in the last few years.
What are your predictions and expectations for 5G launch and roll-out?
Overall, I expect that we will experience a situation like that of the arrival of 4G, in that the operators will attempt to ring-fence the new technology for their own use for as long as possible.
However, there will also be differences: two to be exact. The first difference I predict, is a much faster adoption of 5G use by MVNOs compared to 4G. Unlike its predecessor, the change cycles are getting much shorter and the commercial pressures are greater where 5G is concern. And this, in turn, I see pushing MNOs towards allowing 5G use by MVNOs at a much quicker rate.
Secondly, the range of use cases for 5G are far greater than when 4G first arrived, which means that a true niche market the Holy Grail for an MVNO – is much more likely to be available. This is especially true with the newer generations of MVNOs that are more a vehicle for semi privately accessing MNO networks than the classic consumer focused MVNOs.
In my view, this will be the same for markets worldwide: the timing will be the significant differentiator.
What are some key growth drivers in the APAC MVNO industry?
A key driver of growth in the region would definitely be technological changes and advancements, with particular emphasis on eSIM and 5G . They are driving growth by offering MVNOs (as well as others in the food chain) the opportunity to, on the one hand, reduce their own costs and offer a better, simpler user experience and, on the other hand, to take advantage of exploring new niche use cases and business verticals. MVNOs can profit from a changing environment. Changes in the regulatory environment for MVNO operations have also proven to encourage growth. One need only look at the relatively recent changes in India’s regulatory environment, which are starting to bear fruit in the way of operational MVNOs). In India, active permission to operate MVNOs coupled with a willingness by the MNOs to support them is starting to change the scene, and there is hope that other countries in the region may follow suit. Namely, countries like Pakistan where MVNO regulations have existed for many years, but neither the intent of the regulation or the mindset of the industry has allowed commercial operations to start.
What role will IoT play in shaping the APAC MVNO industry?
Where do I begin? We are seeing more and more MVNOs, as mentioned above, that are quasi-private deployments that need commercial and technical interfaces to the MNO but are distanced from any consumer business. These are the models that are being used to supply IoT connectivity today in areas such as vehicle data communications (cf Cubic Telecom supplying the VAG group) and elsewhere.
The difference with IoT is that the consumer model that uses the amount of data transmitted and the number of active SIMs has long been proven to be inappropriate for IoT and a “supplied services” model has taken over in this area. This is less easy (difficult, even) to reconcile with consumer models when the MVNO is moving across to this part of the business but I am sure that it will be taken on more and more.
The other aspect to focus on with IoT for MVNOs is the shift in the general dynamics for a successful MVNO. From a European viewpoint, 10 years ago an MVNO which had 20,000 active users was considered to be well placed and successful. As the market has changed and consolidated and MNO sub-brands have arrived, a successful MVNO now needs to have 50-100k active users to survive. Thus, the bar has shifted for consumer focused MVNOs who are now looking elsewhere to see where they can operate and the obvious target is the IoT market.
In your upcoming talk at MVNOs Asia, you will be discussing the relationship between IoT and MVNOs. What is the impact of IoT on MVNOs and what steps are MVNOs taking to make sure they succeed in the IoT space?
If I talk in terms of what steps they are – or should be – taking, I think they should be looking very closely at the IoT ecosystem and deciding in which areas they could and should take part.
By this I mean that the IoT space has a number of dedicated parts ranging from the IoT application and device management all the way through to the network supplier. MVNOs can clearly play in this space but need to decide whether it is sensible to try and operate in other parts where there are well established specialists such as the device management space. Choosing which parts to play in for both commercial gain and to be seen to supply a complete (enough) package is key to breaking into this sector (IMO!).
Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Yuval Mayron, General Manager, IoT at Amdocs, takes a look at the business environment created by the mainstream adoption of eSIM technology.
When Apple declared in September that its handsets would have eSIM capabilities, the technology was still in its infancy. Widespread adoption was still someway off, but it’s integration into the iPhone X as part of a dual-SIM function was a clear indication of the significant role it would play in the next generation of mobile technology.
The eSIM incursion
Unlike its predecessor, eSIM is built into the mobile handset, part of a global specification from the GSMA that enables remote SIM provision for any device.
Although most smartphones do still have a physical SIM slot, eSIM is already taking hold. The latest models of the iPhone and Google Pixel have eSIM capabilities, for example.
However, it’s not just the smartphone market that will be bolstered by the arrival of eSIM. The technology is set to be a key growth driver for the Internet of Things (IoT). Consumer devices, which require always-on connectivity, such as wearables (e.g. Apple Watch or Fitbit), connected home devices (e.g. Amazon Echo), laptops and tablets, will all reap the rewards of eSIM and its ability to connect consumer and enterprise IoT devices.
eSIM will transform the mobile ecosystem, and widespread adoption of the technology will have significant ramifications for many of the industries stakeholders.
Consumers, the enterprise, CSPs and suppliers – the eSIM beneficiaries
According to the GSMA, eSIM is expected to create $8.96 billion in revenues by 2020. With this figure in mind, it’s understandable that stakeholders in the industry are jostling for a slice of the eSIM pie.
Amongst those to benefit most from the technology’s introduction are consumers and communication service providers (CSPs), but eSIM will also present opportunities for the enterprise and suppliers too.
eSIM enables users to download multiple digital profiles (up to eight at any given time) from the cloud, directly onto their device; empowering subscribers to switch operators with unprecedented ease.
As eSIM enables subscribers to connect more devices, operators can offer multi-device packages and bespoke data plans. With eSIM, device bundling will become much easier, and consumers will be able to conveniently add new devices to their plans without having to enter a shop or wait for a physical SIM card to arrive in the post. Ultimately, consumers will benefit from reduced costs and enhanced customer experience through simplified device setup.
Businesses are set to profit from the convenience of eSIM too; adding new phones to a corporate mobile service and swapping devices between users with ease. The technology will also enable enterprises to offer personalised profiles and data plans for each user, which can be adjusted and optimised via eSIM remote management tools, depending on the individual needs of the employee.
Furthermore, any business that relies on IoT systems is likely to profit from the cost saving benefits of eSIM. Enterprises can remotely connect equipment to a mobile network using eSIM, which uses less space and is cheaper than traditional SIM technology. Consequently, mobile connectivity can be integrated into hardware where it was previously not feasible due to cost and space restrictions. This will be particularly useful to large-scale machine-to-machine deployments such as manufacturing and warehousing facilities, oil and gas, or power plants.
The increase in multi-device packages, enabled by consumer and enterprise adoption of eSIM, should also present new revenue opportunities for mobile operators as customers scale-up their plans by adding new data-centric devices.
In fact, the opportunity for CSPs is tremendous. With the growing proliferation of smart devices across every consumer and business market, the demand for mobile, wireless connections will skyrocket. These opportunities will only be augmented by the arrival of 5G, which is yet to realise its full potential.
Manufacturers and suppliers
On the face of it, the arrival of the new eSIM standard should spell the end for the manufacturers and suppliers of SIM cards, with the physical SIM all but obsolete. However, eSIM, combined with the momentum behind connected devices, opens up a number of exciting and untapped markets.
Each new device and future innovation in the connected devices space is, in theory, primed for eSIM technology and ripe with opportunity for manufacturers and suppliers. It’s all about supply and demand, after all.
eSIM adoption – the business and technology challenges
Despite the rosy picture that eSIM presents, there remain a number of practical business and technology challenges which need to be addressed by CSPs before it can realise its full potential.
The new eSIM customer experience is complicated by the fact that each original equipment manufacturer (OEM) has its own proprietary processes and screens. Onboarding these, as well as BSS integration and modification, is convoluted, and new protocols, processes, integrations and certifications will be required.
There may also be challenges when troubleshooting eSIM-enabled devices. Call centre support agents are not currently able to analyse profile download issue for all eSIM-enabled devices from one screen and will therefore not be able to perform proactive corrective actions.
These issues could be further complicated by the need for integration with other ecosystem players, such as retailers, point of sale, channels and roaming, which will each require its own solution.
Overcoming the eSIM challenge
eSIM represents a seismic shift in the way the mobile ecosystem operates, so it’s only natural that there will be some teething problems before the technology is up and running smoothly.
For eSIM to succeed, operators need to develop a solution that enables a simple and intuitive customer experience, with seamless support for all functionalities and capabilities that we’ve come to expect from the latest generation of connected devices. This will only be possible if call centre and customer service agents have visibility of devices and control from a single screen.
The other issue is that of compatibility and integration. CSPs need a solution that will work in tandem with the full range of eSIM-enabled devices along with billing systems that work with all the relevant players and platforms in the ecosystem.
Achieving such capabilities is a complex undertaking, which will almost certainly require a specific enabler. This will likely be in the form of an eSIM cloud solution, which would allow integration to all device OEMs and services providers, enabling a one-time integration, and eliminating the need to integrate hundreds of times with all the different players.
This will result in a unified experience in eSIM lifecycle management, for every device type, every OEM, channel, and location, effectively and seamlessly managing settlement among all ecosystem stakeholders.
With a cloud solution in place, eSIM technology could finally be primed for take-off.
It’s that time of year again and before we set about the food, booze and pressies with shameless abandon we decided to collate some predictions from the cognoscenti of our industry.
2019 will be the year of rhetoric – William Webb, Telecoms Consultant
A lot of talking, not much doing. Everyone will be talking about their 5G deployments but many will be trials, not many handsets will be available, and there will be many teething problems with initial deployments. With 5G taking up so much attention, the industry will not be looking at alternative business models, hetnet concepts, or pushing for mergers. Current trends will continue – more fibre will be laid, more wifi connectivity provided, data requirements will continue to grow. Oh, and academics will start to talk up 6G….
Fixed Wireless Access put the revenue back in 5G – Bengt Nordstrom, CEO of Northstream
Fixed Wireless Access (FWA) has evolved into a separate 5G use case, especially by Verizon in the US. Of all the suggested 5G use cases – including eMBB and mIoT – it is FWA that provides the most tangible revenue growth opportunity over the next five years, for both the US and in specific markets in Europe. Furthermore, operators can use their existing physical network assets and competencies for FWA. In 2019, FWA will emerge as a mainstream 5G revenue opportunity beyond the US, and particularly in Europe.
The 5G hype bubble will inevitably burst, revealing its true value – Jennifer Kyriakakis, VP of Marketing at Matrixx Software
As operators battle each other to out-hype their consumer 5G offerings, the breathless mania will surely run into the hard reality of the consumer marketplace. The roll-out of next-generation capabilities will be lengthier than consumers expected, device manufacturers will be slow to adopt the standards, and a whole host of other challenges to 5G enthusiasm will surely arise. While initially painful, this bursting of the hype bubble will provide the impetus necessary for operators to pivot away from today’s heavy focus on speed, coverage and price, and refocus their businesses on monetization opportunities for new and emerging technologies. By embracing innovation as a way to help pay for their substantial network investments in the near term, it will afford Telcos breathing room for the consumer ecosystem to catch-up and fully leverage the new capabilities that 5G will offer in the long run.
Smartphone market to revive in 2nd half with 5G volume – Wei Shi, Telecoms.com Intelligence Manager
The smartphone market has registered the first 4-quarter recession by the end of Q3 this year, and is likely to continue into the first half of the next. The market needs a stimulus for revival, and that should come from 5G. With the first commercial 5G chipset launch by Qualcomm, the enthusiastic smartphone makers, led by Samsung and the Chinese OEMs and, will ride on the wave of excitement to bring a strong line-up of 5G enabled products to the market in the second half of the year. This will provide another impetus for replacement in addition to the normal Galaxy-iPhone driven cycle. However most users who buy 5G phones will not be able to use 5G services overnight.
Telcos scale back efforts in content and media – Paolo Pescatore, Tech, Media and Telecoms Analyst
Cost of premium content rights continues to escalate. In part driven by new bidders such as the online giants. This will force telcos to rethink their current strategies towards investing in content. Some telcos like AT&T and Telefonica will continue to invest heavily. While others like BT will scale back their own ambitions and take a different approach in this landscape such as partnering more closely with providers like Amazon and Apple.
Amazon will acquire DAZN to create a global sports TV challenger – Ed Barton, Analyst at Ovum
Sport is the missing piece of the content puzzle for the tech giants – but not for much longer if Amazon continues to bid for distributors with existing rights deals, such as Fox’s regional sports networks in the US. By acquiring DAZN, Amazon would gain strong sports rights in key global markets including Germany and Japan. DAZN is committed to the sports market but might find the support and growth acceleration offered by Amazon – and its huge existing subscriber base – too alluring to resist.
We will finally get the message on RCS – Mary Clark, CMO of Synchronoss
2019 is actually going to be the year of carrier sponsored RCS – some 12 years or more since the technology was introduced. Between the launch of the operator led solution in Japan and the many other operators we are talking to about this around the world, I think by the end of 2019 we will see multiple launches of interoperable RCS messaging within countries and across countries, allowing for an improved customer experience as well as commerce.
Bringing people and things closer together with applications – Patrick Joggerst, CMO and EVP of Business Development for Ribbon Communications
2019 will be the breakout year for applications that combine people and things, communicating with each other, whether through voice activated commands (“Alexa, call Mum”), or messaging alerts (“A stranger is on your doorstep.”) The lines will blur and tremendous value will be created when companies design applications, connected on secure networks, that make it as easy to develop a relationship with your smart car, smart home, or smart campus as it is to develop a relationship with human beings. The impact will be substantial and meaningful, with applications that leverage sensors to help us age at home more safely, to get to and from work more conveniently, and to generally reduce the “friction” in life that can lead to exhaustion and despair. Look for major changes to the contact center industry, as virtual and human assistants help millions of people navigate this brave, new hyperconnected world, and look for value creation in securing communications throughout.
Rise of SIM-only contracts could be bad news for operators – Kevin Gillan, Europe MD at SquareTrade
Expect to see the slump in smartphone sales continue, and subscribers increasingly turn to SIM-only contracts in 2019. Operators will need to think carefully about alternative revenue sources to combat the unavoidable slump in contract sales. Additional services such as music, TV or device insurance that will retain customers and improve subscriber engagement, while driving new revenue, will be critical.
Operators fully embrace eSIM for devices and the IoT- Bengt Nordstrom, CEO of Northstream
After years of concern about the impact on their businesses, operators are coming to realise the considerable benefits of eSIM technology. These include simpler provisioning, reduced logistic costs and lower barriers for new use cases. Thanks to the rising number of eSIM use cases plus the launch of major handsets equipped with GSMA-based eSIMs, 2019 will be the year that operators in Europe and North America properly embrace eSIM for both handsets and IoT use cases.
The first sixth/seventh play bundle – Paolo Pescatore, Tech, Media and Telecoms Analyst
Most converged telcos already offer a portfolio of multiplay services including fixed line broadband and pay TV. These telcos include the likes of Deutsche Telekom, Comcast, Orange, and Telefonica. Expect these providers to launch the first sixth/seventh play bundle. This will consist of but not limited to other services such as banking, financial services, utility services and other connected services. Orange is likely to lead the race with its march into financial services.
Microsoft is to finish 2019 as the world’s most valuable company – Wei Shi, Telecoms.com Intelligence Manager
Microsoft has been delivering stellar performances in recent quarters, and has weathered the market gloom better than its main competitors. The strategy shift to becoming a platform and to focusing on cloud and gaming will continue to power its resurgence. Meanwhile, its main competitors on the top of the world’s most valuable company table are seeing their share prices being depressed for different reasons. Apple’s overreliance on iPhone makes it vulnerable when the market sniffs weakness in the shipment of its latest products; Amazon’s AWS is growing slower than Microsoft’s Azure; Alphabet is still a one-trick pony: advertising through Google, which continues to throw the company into troubles. As a matter of fact, Microsoft did briefly become the most valuable company in late November. Next time this crossover happens it may last longer.
Now that they’ve got to actually do it everyone gets bored of 5G and starts banging on about 6G – Scott Bicheno, Telecoms.com Editor
So 5G just ended up being about capacity, efficiency and industrial applications. How boring is that? Once the first couple of 5G conversational gambits at MWC fall flat, people will soon realise it’s much more fun to focus on more distant technology, about which they can make all sorts of utopian predictions without fear of being called out. There will be talk of a wireless neural network connecting everyone and everything to a hive mind overseen by benign artificial super intelligence. What they won’t say is that the ultimate aim of 6G will be to erase all traces of individuality in order to create a global AR/VR Borg that will combine Chinese social credit, American cultural puritanism and European imperiousness to free us all from the burdens of disappointment, inconvenience and choice. Happy New Year!
With connectivity taking a more prominent role, Google has tied more partnerships to support eSim on the Pixel 3, taking the business into international markets.
While the eSim functionality on Pixel 2, claimed by Google to be “the first major smartphone with eSIM”, only worked on Google’s own MVNO, Project Fi (now Google Fi), the internet giant just announced it has built more support for eSim on its new Pixel 3 phones. The partners listed in the Google statement included Sprint in the US, Deutsche Telekom and Vodafone in Germany, EE in the UK, and Airtel and Reliance Jio in India. Also included are Truphone and Gigsky, two MVNOs that operate in multiple markets.
After Apple threw its weight behind eSim with its latest products, projections of the penetration of eSim have been raised. ABI Research now predicts 420 million eSim compatible phones will be shipped by 2022, 100 times higher than the four million sold in 2017. Established mobile operators may still view eSim with suspicion, as it makes churn so much easier. But, like new technologies in the past, from VoIP to OTT services, it would be hard to hold back the tides of progress. Moreover, it does force operators to be more innovative and customer centric, in addition to helping improve operational efficiency. On the other hand, consumers will benefit from the flexibility and easy roaming arrangements that eSim enables.
This trend has certainly been embraced by MVNOs too. Ralph Steffens, CEO of Truphone, one of Google’s partners, said in a statement, “This new technology signifies a massive shift in the telecommunications industry. It’s having an impact on everyone from phone providers to chipset manufacturers to mobile network operators. But most importantly, it directly impacts businesses and consumers by offering them more flexibility over their mobile connectivity.”
Pixel has never been one of the best sellers, and Google needs to get the whole Android ecosystem behind it to build the eSim momentum. To this end Google is rallying the Android OEMs.
“To enable a consistent and simple experience across the ecosystem, we’re also creating a program that allows Android device makers to build eSIM-capable smartphones. We look forward to continuing our work with our partners on the potential benefits of eSIM—whether that’s getting you connected to a phone, watch, tablet, or laptop—in the future,” Google said in the announcement.
Apple’s support of eSIM in its latest iPhones promised to kick-start that market and a couple of specialist companies are leading the way.
UK outfit Truphone, which recently raised £18 million in funding, valuing the company at £386 million, has just launched what it claims is the first eSIM app for the new iPhones. The app exploits the ease and flexibility promised by eSIM to allow users to purchase instant local connectivity for their devices in 80 countries.
“eSIM technology represents a step-change in users’ relationship with their network operator,” said Trufone CEO Ralph Steffens. “By letting people run multiple plans and change operators without having to wait for a traditional SIM card to be delivered, the eSIM is swinging the power balance back in favour of the consumer. By offering our ready-to-go SIM provisioning platform to other mobile operators, we are facilitating a new era of consumer-first mobile plans.”
But Chinese company Redtea Mobile has been doing this stuff for a while too and has a service called eSIM+. It’s a fairly straightforward web platform that allows you to buy connectivity in over 60 countries and requires you to scan a QR code to activate it. Redtea has apparently already activated 100 million eSIMs in China and is now looking further afield.
Possessing only and antiquated Samsung Galaxy S7, we have been unable to put either service to the test, but they both seem pretty straightforward. Trufone’s app seems easier and more intuitive than Redtea’s web platform/QR code combo , but then again you can get 1GB in the UK on eSIM+ for $13, while the deal will cost you £15 with the Trufone app. Both seem worth a look if you have a new iPhone.
Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Freelance Technology Journalist Kate O’Flaherty offers an in-depth analysis on iSIM, launched by ARM earlier this year. What is it, how does it differ from eSIM, and how will it impact the market?
This year’s saw ARM take aim at the internet of things (IoT) with the launch of iSIM technology – an integrated component built into the same chip as the processor. In many ways it’s similar to eSIM, but because it takes up less space iSIM is ideal for tiny IoT devices.
Among the advantages, iSIM lowers costs for multiple players in the IoT supply chain. It is cheaper than eSIM, because there is no need for an extra chip. In addition, there aren’t any assembly steps, and it results in fewer devices in the supply chain, reducing hardware manufacturing costs as a result.
Ease of integration is another factor that makes iSIM stand out: It reduces complexity because the modem and Sim card are “under one roof”, so there’s nothing for the device maker to integrate, Eden Cohen, senior product manager at Qualcomm, says.
ISIM technology offers multiple benefits for all players within the IoT space, according to Alex Gledhill technical specialist at Intel: “ISIM provides flexibility in business and deployment models, enables more services, simplifies OEM logistics, eliminates sku proliferation – and there is a lower bill of materials cost, in particular for low power technologies like narrow band IoT (NBIoT) and Category M (Cat-M).”
This is because iSIM is more power efficient. Indeed, the lower price and ease of use associated with iSIM could easily be applied to smart meters or connected cars “where we need high security and low cost”, says Vincent Korstanje, vice president and general manager of the Secure Identity line of business at ARM. “A smart meter needs software updates, but this doesn’t need to be fast,” he points out – which makes it an ideal use case for iSIM.
ARM is predicting that 15% of all IoT devices will have cellular connectivity by 2025. The technology therefore opens up multiple opportunities for operators, because they will potentially see more IoT devices connected to their networks as a result.
Taking this into account, iSIM will also offer interesting use cases in the consumer IoT space, says Korstanje’s colleague, product marketing director Loic Bonvarlet. “This area is really a premium and iSIM might bring new interesting use cases from saved power and space – such as wearables and things integrated into clothing.”
Asset tracking and connected spaces offer more possible use cases for iSIM. “These use cases require a small module that is low cost,” says Korstanje. “When firms are able to track pallets around the world, they can keep a good eye on where things are and therefore improve efficiency.”
At the same time, iSIM can also be used in high end devices, says Gledhill: “For high end devices, iSIM can enable vertical applications such as payment, identity and digital rights management.”
It is clear iSIM offers great potential to help drive the growth of IoT, but there are obstacles to be overcome. Guido Abate, STMicroelectronics international standards manager and the GSM Association’s RSPTEST Chair, points out that eSIM is “much more mature than iSIM”.
Gledhill agrees, saying iSIM is “in its infancy” and needs mass market adoption. “To achieve this, it requires system on a chip (SoC) integration, certification process enhancement and an ecosystem that provides the same level or better security than the traditional Sim.”
Remy Cricco, chairman of the board at the SIMalliance says the group’s members are observing “strong technological and business trends” supporting the continued growth of the ecosystem.
However, he adds: “As long as there is demand for strong device and service security – which SIMalliance sees as gaining even more relevance with society becoming increasingly connected – the provision of secure OS and subscription and data management services, remote provisioning capabilities and a comprehensive understanding of mobile operator requirements will be essential.”
Indeed, the standards for eSIM are already underway, with several devices already incorporating the technology. But to a large extent, iSIM can use the existing eSIM ecosystem and back-end infrastructure, says Gledhill.
At the same time, he says, security and certification challenges need to be addressed to satisfy MVNOs’ and mobile operator’s requirements.
But ARM points out that iSIM is in itself very secure. ARM’s iSIM offers its own low footprint OS, called Kigen, which runs on a CryptoIsland secure enclave. This means the Sim identity, a microcontroller and a radio modem can be embedded on the IoT SoC.
This is fully partitioned from the rest of the SoC, with self-contained processing and encryption elements running a secure operating system.
But despite this, Korstanje agrees there is more to be done. “We need to work hard on the standards side, but it’s not massively different: The software stack is the same,” he says.
It’s early days for iSIM, but its future is looking very bright, with devices appearing as soon as next year. According to ARM, iSIM will appear from early 2019, with more announcements due in the first quarter of the year, ramping up for full adoption in 2020.
Meanwhile, Qualcomm says it is planning to offer iSIM within connected PCs running on its Qualcomm snapdragon processors set to launch in 2019.
Other technologies will also help fuel the use of both iSIM and eSIM in devices. For example, Gledhill thinks 5G will be an accelerator for the embedded Sim market. Gledhill explains: “Simply put, 5G will connect more devices – including low power IoT devices, cars, and PCs and tablets – to operator networks.
“This means more deployment and enablement of Sims on various existing and new technologies. It will drive new models and the user or enterprise has the ability to move between networks without physically changing the Sim card. This is particularly useful when applied to IoT devices in the field.”
As the ecosystem matures, there will be many more opportunities for both MVNOs and mobile operators that wish to play in the IoT space. But this will also put pressure on carriers to ensure their networks are up to scratch and able to handle potentially billions of additional devices over the next few years.
Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Logan Armendone-Mowbray, Content & Communities Manager at KNect365, explores how with Apple onboard the eSIM market is set for accelerated growth and why the technology is likely to impact operator’s roaming revenues.
The benefits of Apple’s eSIM adoption in the latest iPhones will extend further than just consumers, who will be able to choose an operator dynamically. The decision to expand eSIM support to iPhones is expected to accelerate eSIM market growth in general, boosting deployment and development of the technology.
The eSIM smartphone market is set to reach 420 million units annually by 2022, according to ABI Research. This represents a shift in the eSIM smartphone market from one which was solely occupied by Google and its Pixel devices, which shipped 3.9 million devices in 2017.
“This is the moment industry players were waiting for. With both Apple and Google deploying eSIM enabled devices, this is only going to speed up the adoption of this technology. It is now more important than ever to refine profile portability and management, how greater connected devices can be added to user accounts and to have a clear customer journey mapped out,” says Tania Ferreira, Senior Producer for KNect365’s e-SIM Connect.
Analysts have started to put their bets on Samsung as the next OEM to integrate the eSIM technology to their devices. Phil Sealy, Principal Analyst at ABI Research, shared that “Samsung will likely adopt a tiered approach, integrating the eSIM into its S and Note range first, then expand into its A and C ranges later.” Other names on the ‘who’s next’ list include Huawei, LG and Xiaomi, all companies which offer a range of high-end smartphones. More localized vendors are also expected to come onboard, including OPPO, who are looking to expand beyond China.
As we contemplate which other devices might become eSIM enabled, it is likely that the technology will feature inside the multiple ‘smart’ devices in people’s homes, and shipping companies might start to explore the advantages of eSIM within IoT devices to track goods as they move along the supply chain. Ivan Laden, CEO at Blue Wireless, believes “IoT, 5G, eSIM are all developments which will offer major opportunities in the enterprise and government sector, enabling new applications around augmented reality, robotics and autonomous vehicles to name a few”.
Due to different eSIM solutions for different scenarios, like M2M and consumer market, “there’ll be more start-ups and small companies dedicated to different segmented areas, which could be too fragmented for traditional MNOs to tag in,” says Godfrey St. Claire, Chief Business Officer at Joy Telecom.
eSIM might impact operators’ roaming revenues as it might be incredibly easier for travellers to switch to a local operator when visiting a new country. On a Google’s 2017 blog post, Joy Xi, a product manager for Project Fi, highlighted the flexibility eSIM brings to consumers by explaining that “you no longer need to go to a store to get a SIM card for wireless service, wait a few days for your card to arrive in the mail, or fumble around with a bent paper clip to coax your SIM card into a tiny slot.” Adding that “getting wireless service with eSIM is as quick as connecting your phone to Wi-Fi.”
Joy Telecom focus on roaming and the outbound travel market in the APAC and Europe regions, specially travellers from China, Japan and Korea, is an interesting case study for operators and other MVNOs who might consider the flexibility brought by eSIM a threat to their roaming revenue. Joy combined MVNO and travel businesses together to best serve this niche customer group.
In Godfrey’s own words “for end customers, outbound travellers, telecom service is merely one part of their needs overseas, flight/cruise, hotel, attraction ticket, coupons… so many services they would want during the travel, and Joy wants to be an integrator of these areas.”
The eSIM form-factor is a transformative technology, which will undoubtedly impact the entire SIM value chain, including business models, sales channels, and processes across the smart card, secure IC, Mobile Network Operator and OEM vendor landscape. “This will mark the beginning of a significant required change in the SIM card hardware value chain,” adds Sealy.
Back in 2017, Joy Xi shared that whilst Google was piloting eSIM on their newest Pixel devices with Project Fi. They also looked forward to sharing what they learnt and “work together with industry partners to encourage more widespread adoption”. Now that Apple is onboard, eSIM integration into smartphones seems like fair game and widespread adoption looks much closer to reality.
But for Sealy, “today the market is not ready to completely embrace the eSIM for a number of reasons, and notably this is due to lack of MNO eSIM readiness. OEMs will need to remain mindful of this to continue supporting their respective global client base until all MNOs are ready to make the switch full time.”
The traditional SIM card is not going to disappear anytime soon, and Apple’s new range of iPhones is a testament to this fact, given its dual-SIM functionality. Yet, embedded SIMs present operators with multiple opportunities, including multiple devices subscription which could generate new revenue streams.
The e-SIM Connect 2018 is the only dedicated eSIM event. It’s your chance to meet with the eSIM industry leaders; including Kerrie Lenhart Hogan, Google’s Director of Business Development, Communication and Connectivity Products.