eSIM and IoT: Q&A with Alexey Gabsatarov

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Alexey Gabsatarov, Head of Business Development, Europe at Soracom Corporation Ltd, took the time to take part in this exclusive interview with the MVNOs Series on eSIM and IoT.

Where does eSIM fit into the IoT market?

Cellular GSM connectivity represents a fundamental enabling technology for the IoT market. Obviously, there are other wireless standards that serve specialized cases, but cellular has really emerged as the leading solution for connecting devices to the cloud. There are a number of reasons for this – like ubiquitous coverage, global reach, better and better energy efficiency (especially with recent developments in Cat-M and NB-IoT), and especially overall security.

Robust security is vital for all IoT projects. Cellular offers encrypted transmission between the device and the network, along with the ability to shield the device from the internet entirely. For over 25 years, cellular connectivity relied on removable SIM cards for authenticating devices to the network. eSIM essentially permanently embeds that card inside the device while providing an equivalent level of security. eSIM already is a fundamentally important technology for IoT and Consumer markets. In fact, around 50% of all devices we connect already have an eSIM.

What benefits does it bring? 

This new form factor brings numerous benefits for device makers. With eSIM, devices can now be much smaller, tolerate harsher environments (temperature and vibrations) and since no SIM slot is required, devices can be made completely airtight. Since the eSIM is designed to host multiple subscriptions, IoT service operators may choose to use multiple networks subscriptions with e.g. different coverage, cost or quality.

For Network Operators and especially MVNO’s, eSIM also brings unique benefits. Since there’s no need to distribute physical cards, Operators can simplify supply chains and reduce distribution costs. With eSIM, Operators can build fully digital e-commerce processes to service more use cases without having to rely on retail presence.

How is eSIM shaping this new world of connected devices? 

Consumers are increasingly interacting with apps and web sites provided by Network Operators to find and manage connectivity products. eSIM is a critical component to enable this connectivity-in-an-app approach consumers expect from modern services.

At the same time consumer connectivity is often seen as a component of a bundled offering with partnerships spanning much more than the usual broadband, TV, Mobile combo.  For example, travellers can purchase an option to be connected on arrival with their airline ticket.

We also see a strong demand for eSIM based connectivity in IoT projects.  Many device makers making the switch to the eSIM form factor, and we expect this trend to accelerate in the coming years as eSIM become more readily available, more affordable, and more familiar to hardware designers and manufacturers. eSIM is essential for many IoT projects at scale since it simplifies production and logistics. As an example, we’d expect the majority of Smart City and Smart Infrastructure projects to use eSIM for scaling out.

Why does eSIM make sense for IoT device makers and the potential use cases?

eSIM makes sense for device makers for two primary reasons: improved physical characteristics of the eSIM chip over the removable eSIM and the ability to provision network credentials over the air.

eSIM comes in a variety of standard and proprietary form factors such as MFF2 and WLCSP. This offers great options for device makers who can pick a form factor most suitable for their device. In addition to that, GSMA is working on certifying solutions based on iSIM or Integrated eSIM which would not require a separate chip and will simplify it even further. In general, the current trend for digitalisation and miniaturisation will continue. Use cases that will benefit from this most immediately include wearables, where we have already seen cellular enabled completely sealed off rings as a prime example.

Being able to remotely provision network credentials is critical to delivering IoT at scale. With manufacturing becoming increasingly global, many IoT use cases benefit from a single SKU which can be provisioned with specific connectivity option once the device is deployed without opening or even accessing it.

Where does the MVNO fit into the picture?

Being able to offer products over a fully digital channel is a huge benefit for MVNOs since it’s generally less capital expensive than maintaining a network of retail stores. In addition, many MVNOs find eSIM useful for accessing new market channels, such as distributors and resellers. It’s also easier to offer connectivity bundled with partners’ products which further benefits MVNOs.

For those MVNOs active or expanding into IoT markets, being able to offer eSIM based connectivity is increasing becoming the must for many IoT use cases. With the number of connected devices expected to climb to 13.6 per person by 2022, Consumer IoT is definitely an interesting market for MVNOs to consider for future growth.

You are set to speak at MVNOs World Congress in September? What will your talk be about? Why are you attending?

I am going to speak at MVNOs World Congress in September regarding eSIM adoption. Based on my industry and regulatory experience I can provide insight into both consumer and IoT eSIM adoption, current challenges and new developments. And I am excited to join MVNO World Congress to share this insight and get into discussions with industry colleagues and learn about their experiences.

 

If you liked these insights from Thandi, make sure to catch her talk at MVNOs World Congress 2020 in Berlin, 1 – 4 September 2020.

Multi-IMSI, eSIM and eUICC, acronymic heaven or hell?

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this article Douglas Gilmour, Managing Director at Mobius Networks, demystifies some key questions surrounding eSIM technology, and what this means for the consumer.

There is some confusion in the market at the moment when someone asks for an eSIM. This usually means an embedded subscriber identification module (SIM)- a semiconductor chip soldered direct to the PCB, rather than the usual form factor we are all use to. But if it’s soldered to the board how can the end customer choose their network?

An embedded Universal Integrated Circuit Card (eUICC), also confusingly called an eSIM, may be the answer. This standard means that you can pick your Operator and roll out across the world. When the device wakes up you can load a local network international mobile subscriber identity (IMSI) onto your product and never have to worry about roaming charges since you are always local.

Another big advantage of eUICC is that if you decide to change Operator after your initial contract has run out you can then lift the whole estate to another network with all the negotiating power that brings. The downside is with flexibility comes complication and some additional cost.

Multi-IMSI is sometimes seen as a halfway house. You can load multiple IMSIs onto a SIM so that you can take advantage of Roaming in areas where coverage is thin. You can load local IMSIs if there is heavy lifting to be done. Effectively it turns the SIM into a least cost routing option. So it looks like eUICC without the additional costs.

But whereas with an eUICC SIM you shift the SIM from one network’s HLR to another, with multi-IMSI the fundamental relationship stays with the original provider. So if you fall out with them whatever reason the only way to change the estate is to change the SIM. Which in most IoT and M2M applications may not be possible.

With all of these acronymic options you may not know if you have made the right choice until you are three years down the line. By which point it may be too late.

 

This article is produced in the lead up to MVNOs World Congress 2020, Where Douglas Gilmour will be speaking. Read the full article here.

Multi-IMSI, eSIM and eUICC, acronymic heaven or hell?

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this article Douglas Gilmour, Managing Director at Mobius Networks, demystifies some key questions surrounding eSIM technology, and what this means for the consumer.

There is some confusion in the market at the moment when someone asks for an eSIM. This usually means an embedded subscriber identification module (SIM)- a semiconductor chip soldered direct to the PCB, rather than the usual form factor we are all use to. But if it’s soldered to the board how can the end customer choose their network?

An embedded Universal Integrated Circuit Card (eUICC), also confusingly called an eSIM, may be the answer. This standard means that you can pick your Operator and roll out across the world. When the device wakes up you can load a local network international mobile subscriber identity (IMSI) onto your product and never have to worry about roaming charges since you are always local.

Another big advantage of eUICC is that if you decide to change Operator after your initial contract has run out you can then lift the whole estate to another network with all the negotiating power that brings. The downside is with flexibility comes complication and some additional cost.

Multi-IMSI is sometimes seen as a halfway house. You can load multiple IMSIs onto a SIM so that you can take advantage of Roaming in areas where coverage is thin. You can load local IMSIs if there is heavy lifting to be done. Effectively it turns the SIM into a least cost routing option. So it looks like eUICC without the additional costs.

But whereas with an eUICC SIM you shift the SIM from one network’s HLR to another, with multi-IMSI the fundamental relationship stays with the original provider. So if you fall out with them whatever reason the only way to change the estate is to change the SIM. Which in most IoT and M2M applications may not be possible.

With all of these acronymic options you may not know if you have made the right choice until you are three years down the line. By which point it may be too late.

 

This article is produced in the lead up to MVNOs World Congress 2020, Where Douglas Gilmour will be speaking. Read the full article here.

Industry offers a bunch of telecoms predictions for 2020

It wouldn’t be the last working day of the year without the good old predictions piece so here are a bunch we got together from assorted telecoms industry luminaries. It should be noted that 2020 is also the year in which all predictions pieces will have to find a new metaphor/play-on-words for being able to see into the future, which will be tough for everyone.

Reality bites

My key prediction is that 2020 will be the year realism finally hits. After years of hoping that 5G will miraculously lead to increased profit for the equipment providers and mobile operators, in 2020 it will be increasingly clear to investors that this is not going to be so and indeed it might actually reduce profits. Altnets will have to start demonstrating they can deploy fibre networks at scale and at a speed to match incumbents, and many will be found lacking. Quite how realism will manifest itself is hard to know. Keep an eye on those share prices and stay away from the Kool-Aid.

William Webb, Telecoms Consultant.

 

Fibre stimulation and content aggregation

Fibre build will be stimulated but the valuation of fibre businesses has so limited the investment players that the price of fibre companies has topped out and we’ll see consolidations. The stimulation of fibre means that 5G in new areas will become more possible, and SMEs and local initiatives will use it to do things the MNOs haven’t thought of or didn’t think of as profitable. The amount of roads being dug for fibre on top of all the other utility digs will bring all of London, Manchester and Birmingham traffic to a standstill at least once, hopefully not simultaneously.

TV content aggregation will become a key battleground as the myriad of service and bundling options (Britbox, Now, AppleTV, Amazon, Netflix, Disney, etc etc) starts to drive viewers round the bend and into bankruptcy.  This means smart rights owners will start to disaggregate their content on the basis of micropurchases per episode, maybe even per view and the provider of the best EPG may well be able to own the viewer and a portion of their data and advertising revenues without needing to spend billions on content.

Ros Singleton, UK5G Chair

 

Consumers will say “meh” to 5G

Much of 5G marketing is as we might expect it to be. One operator is hyping it as offering speed “like you’ve never seen before”, with an “instant connection” to the content you love most. Another touts “ultra-fast speeds and ultra-low latency”. But the reality is that the main benefits of 5G are complex and not best communicated with such simple messages. In fact, to date, there’s no real evidence that consumers are terribly interested in 5G, and the current rhetoric claiming that the technology is offers faster speeds than ever before is unlikely to change that. Instead, we’ll see operators focus on enterprise customers as early adopters of the technology, and rather than emphasising the speed of 5G, we’re likely to see marketing focus on 5G benefits for specific use cases.

Gavin Hayhurst, Product Marketing Lead, TEOCO

 

A move to speed-based pricing for mobile

The fact that operators aren’t charging a premium for 5G services currently does not mean they can’t in future. The fixed broadband world has offered speed-based pricing for some time and it stands to reason that mobile operators will continue to follow suit. 5G enhanced mobile broadband does offer considerable improvements in network speeds and capacity and consumers are increasingly used to paying more for the best connectivity. Industry analyst group, CCS Insight, predicts that most 5G operators will move to speed-based pricing by 2021. This will be especially true of operators looking to offer converged mobile broadband and fixed wireless access connectivity in a 5G age.

Niall Norton, CEO, Openet

 

The rise of the private network

There will be a rise of 5G private networks in the next 2 years in many cases with involvement of operators. A private 5G network is a local area network (LAN) that will use 5G technology to build and create a network. The network thus created is expected to carry along all the features of 5G network including reduced latency and higher speeds. Private networks for enterprises will be the most direct option for large businesses that want to benefit from 5G capabilities. However these networks may be offered by CSPs or directly by infrastructure and cloud and other software vendors.  Businesses, especially those involved in manufacturing and other industries, are looking forward to using private 5G networks to get high-level granular views on their sales and operations. Operations and monetization of these networks will be key to success of these networks.

Ari Banerjee, VP of Strategy at Netcracker

 

Telcos fully evolve their focus from NFV to cloud native

Regardless of the number of public cloud partnership announcements we continue to see, operators will continue to heavily invest their resources into evolving to cloud native principles. This includes the shift from VNFs to CNFs irrespective of the choice to leverage public cloud platforms or not. This shift and investment to cloud native is what will enable dynamic network capabilities, and massively streamline the cost and time to market for digital services. So, there will be less hype around ‘cloud’ itself, and much greater focus on cloud native evolution happening inside the carriers’ data centers.

Jennifer Kyriakakis, Co-founder and VP, Marketing, MATRIXX Software

 

eSIM devices and 5G to stimulate the launch of pure digital parallel brand businesses

 The pressure for moving faster to digital, automated businesses and turning new technologies like eSIM and 5G services into tangible consumer propositions will further drive operators to launch parallel brand propositions. There will be a fully focused mission to deliver excellence in digital self-care, without the constraints of legacy BSS systems and old business processes.

Jukka Heiska, VP Business Development, Qvantel

 

Let’s learn to play nice again

Policymakers should work to build a consensus with industries, businesses and other nations to reinforce the principles of free trade and rejuvenate the global trading system. Tariff barriers have reduced global commerce and international co-operation and this has had an indirect and damaging impact on cyber security. Policy makers and business should come together to reinvigorate the global trading system and agree strong, new cyber security rules that apply to all – supported by robust monitoring mechanisms that help build confidence.

Victor Zhang, President, Global Government Affairs, Huawei

 

5G indoor coverage will gather momentum

In 2020, building owners will request that current wireless coverage systems be easily upgradeable to 5G. This offers the perfect, cost-effective solution. Venue owners and operators want longevity and ROI for purchases; what they don’t want is to have to buy a whole new system in a year or two, as demand for 5G in-building coverage grows. From a technical standpoint, upgrading platforms to 5G will mean wider frequency bands (e.g. 400MHz in band 3.5). I expect 3.5GHz to be in most indoor environments, however, this will not increase coverage: 3.5GHz is all about boosting capacity.

Info Flomer, VP Business Development and Technology, Cobham Wireless

 

Innovation in spectrum will enable the rise of new 5G players

5G will see new, disruptive players entering the market in smart cities, IoT devices and private networks. All these new players will also require spectrum, driving innovation in regulation and allocation. Multiple countries, including the USA, Japan, Germany and the UK are already regulating bands of spectrums to be available through shared and priority access, and to be dedicated to enterprise applications. But in 2020, as 5G begins to takes hold, this will encourage innovation, disruption, and competition in that market. Traditional CSPs will evolve to open cloud networks, network sharing, network slicing and new spectrum to attain the cost structures, agility and innovation to compete in 5G.

Angela Logothetis, CTO of Amdocs Open Network

 

Huawei, Nokia and Ericsson will lose out to open-minded vendors

As we enter the 5G era, the traditional, closed model for building the RAN is no longer sustainable. In developed markets, the race to deliver 5G is in full swing and operators are spending considerable amounts building out their next generation networks. They need a new approach that will allow them to deploy and cost-effectively run 5G technology efficiently alongside their 2G, 3G an 4G networks. 2019 saw significant moves towards OpenRAN, illustrated by Vodafone’s announcement that it would be opening its entire RAN in Europe to OpenRAN vendors during TIP Summit. In 2020, the momentum behind OpenRAN will continue to grow as other operators realise it can help them reduce costs, drive more competition between technology vendors, and stimulate higher levels of innovation in the industry.

Steve Papa, CEO at Parallel Wireless

 

Cloud partnerships and super-aggregation

I think the recent partnerships between cloud computing behemoths and network operators – Amazon and Verizon and AT&T and Microsoft being particularly notable – will accelerate innovation applicable to the full spectrum of cloud-dependent services and applications, more effectively supporting latency-sensitive use cases than ever before. We’ve been speculating about 5G use cases for some time and these edge-computing-enabled 5G networks will offer the first large scale environments in which to test, prove and deploy the wild innovations which will eventually define the 5G era. They also pose some interesting questions around the how value chains will form around the use cases which eventually scale.

CSPs who integrate the most popular video services into a single aggregated platform – offering federated capabilities such as payments and billing, search and recommendation, ad sales and targeting, subscriber retention, video data distribution, audience data analytics, etc, to all partnered video services – will offer a better UX and achieve better retention and usage rates compared to offering them separately. Integrating Netflix into a partner’s UI, billing system and bundling strategy has been commonplace for a while and we’d expect that to extend to more and more services. One CSP described it to me as “operating the mall, not the shop” but because Analysts need to give fancy names to things to charge more to talk about them, we call it “super-aggregation”.

Ed Barton, Chief Analyst, Entertainment at Ovum

 

The Balkanisation of the business world

There’s no way US President Donald Trump, who seems likely to be re-elected in 2020, and Chinese Premier Xi Jinping, who has dispensed with the inconvenience of elections entirely, will give any ground to each other in the foreseeable future. As a consequence the trend established this year for waging a cold war via trade and business will continue. Chinese telecoms giant Huawei was the focus of this activity in 2019 and it will be joined by others from both countries, with companies becoming bundled in with trade tariffs as the great global pissing competition escalates. China is already moving towards national self-reliance in PCs and other industries are bound to follow. The US will reciprocate and regions such as Europe will increasingly be asked to pick a team. 2020 may mark the high-water mark for globalisation as China and the US increasingly seek to become self-reliant in order to deprive each other of chips to use in the great geopolitical game.

Scott Bicheno, Telecoms.com Editor

GSMA promises not to rig the eSIM standard in favour of its members

The US Justice Department has concluded a two-year investigation into the GSMA’s handling of the eSIM standard after the latter promised to play nice.

The investigation was started because the Antitrust Division thought the eSIM standard was being developed in such a way as to make it difficult for new entrants to the market to compete with the incumbent operators that comprise the GSMA’s membership. Getting rid of the hard SIM theoretically makes it a lot easier for subscribers to change providers as it would only require an OTA update. The prospect of the resulting increased competition presumably alarmed said operators.

According to the Antitrust Division’s investigation, the GSMA and its mobile network operator members used an unbalanced standard-setting process, with procedures that stacked the deck in their favour, to enact an RSP [Remote SIM Provisioning] Specification that included provisions designed to limit competition among networks,” said the DoJ announcement. “When standard-setting organizations are used in an anticompetitive manner, the division stands ready to evaluate that conduct under the antitrust laws and take whatever action is necessary to restore competition.”

It looks like this process was concluded in the right way, with the GSMA volunteering to change its anticompetitive ways sufficiently to placate the DoJ. “In response to the investigation, the GSMA has drafted new standard-setting procedures that will incorporate more input from non-operator members of the mobile communications industry,” says the announcement.

“The new standard-setting process will have a greater likelihood of creating procompetitive benefits for consumers of mobile devices; it will also curb the ability of mobile network operators to use the GSMA standard as a way to avoid new forms of disruptive competition that the embedded SIMs (eSIMs) technology may unleash.”

“I am pleased that the GSMA is ready to use its standard-setting process to create a more consumer-friendly eSIM standard,” said Assistant Attorney General Makan Delrahim. “The GSMA’s old procedures resulted in certain eSIMs rules that benefitted only its incumbent mobile network operators at the risk of innovation and American consumers.  The new procedures proposed going forward significantly reduce that risk and should result in new innovative offerings for consumers.”

The GSMA’s responding statement, not attributed to any individual, is curt to the point of petulance. “The Justice Department reviewed millions of documents covering a multi-year and complex process to establish common standards for eSIM technologies,” it said. Its Business Review Letter is conclusive that the agency found no violation of antitrust laws.”

There’s no point pouting about it GSMA, if you can’t learn to play nice then you’ll have your toys taken away. There is a clear conflict of interest when you have a trade association developing standards that need to be made available to industries outside of its own. Of course it’s going to try to favour its members – that’s what it’s there for.

The sensible thing, surely, would be for the GSMA to incubate technologies such as eSIM and RCS but then hand them over to proper, independent standard-setting bodies like the 3GPP as they mature and become commercial realities. We don’t know why it doesn’t but it surely can’t be a matter of money; the GSMA has Mobile World Congress for that.

e-SIM Market 2019: A slow burner with impressive growth potential

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.

The many opportunities eSIM promises for IoT

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.

 

For more insights into the relationship between eSIM and IoT, download the full report: “eSIM: Challenges and Opportunities for IoT.”

Simon Davies of Acqua talks eSIM, 5G predictions and growth drivers for MVNOs

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!).

Find out more about the MVNOs Asia event where Simon will be speaking here.

Opportunities and challenges as eSIM technology is primed for take-off

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.

Consumers

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.

The enterprise

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.

CSPs

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.