If you’re still thinking about eSIM as a side hustle, it’s time to change your focus.
Whether it’s for wearables, IoT, or other edge use cases, most mobile operators have a way to offer their network via embedded SIM (eSIM), rather than traditional plastic SIM cards. However, until now - it hasn’t been the main event.
Tim Cook’s announcement that the iPhone will be eSIM-only in the USA should have operators rethinking their priorities, as eSIM is about to become the major way to deliver service to your consumers.
The impact of eSIM-only on the consumer market
It’s easy to understand why so many operators might see the growth of eSIM-only as a threat. After all, it will now be a whole lot easier for consumers to move between operators, simply downloading new profiles as and when they choose. For example, when subscribers go on holiday, why would they agree to expensive and limiting roaming agreements through their home operator, when they could just download local connectivity and get better performance at a much lower cost?
As travelers lead the way, and it becomes increasingly easy to download electronic profiles, the trend will grow, leaving the legacy method of relying on roaming agreements in the dust, and making local connectivity the de-facto choice.
Without the stickiness of a plastic SIM, and without the revenues associated with roaming, operators will need to think about new ways to keep consumers around, competing on service and support. They will also need to consider new revenue models, one of which is the local connectivity itself. The first operators who jump in and make their network consumable will get the most coverage, while lagging adopters will need to follow suit, or risk being left behind.
Roaming under attack: what does this mean for IoT?
If consumers don’t need roaming for travel any more, and they can download a local profile for a tenth of the cost of roaming, then operators are going to need to accept that loss of revenue, and the whole market becomes much more challenging.
Let’s just say it. Roaming was never the right choice for IoT. IoT agreements were built on the back of the systems that worked for consumer travel. For consumers, if roaming is cost-effective, it’s a great solution. However for IoT, there are problems right out of the gate.
Permanent roaming restrictions are a massive hurdle for IoT implementation, as well as data privacy regulations for meeting compliance requirements. Security is regularly a problem when roaming, and performance and low latency are almost impossible to obtain while roaming, too.
It’s time to call it. If roaming no longer works for consumers, for whom it was built, it’s simply not going to go the distance for IoT. And hey, we suddenly have a reality where local profiles are easier to download, manipulate and consume than ever before!
Welcome to the era of localized connectivity for IoT.
Meeting global needs with local connectivity
Rather than a looming threat, I believe that operators are right on the cusp of an exciting opportunity. So ask yourself, what do your customers need? The truth is, they don’t care about the underlying technology, they just want connectivity, and they want it when and where they choose. That’s why we are already seeing large operators such as AT&T and T-Mobile invest heavily in eSIM to take advantage of its potential.
The future for IoT connectivity is something that has global availability, but in a localized way. The local part jumps the hurdles of compliance, security, and performance, but MNOs still need to allow customers to keep their reach, as IoT is a global business.
However, on top of that, enterprise IoT customers also want greater control than they have had up until now. They need service capabilities, visibility into the network, and insight into what’s happening with their devices on the ground. They don’t want connectivity to be a black box. As a critical element of their solution, being sidelined is no longer an option.
In order to position yourself as the next-gen solution for global data needs and IoT, and to stay on top of market trends and remain best-in-class in your own territory, there are a few key takeaways:
- Allow your customers to consume your data connectivity solution through eSIM, and not only through Plastic SIM cards.
- Look for a solution that allows customers to use local connectivity rather than roaming for their IoT use-cases, so you can pitch the values of a modern IoT solution, and so they don’t look elsewhere. That means making sure the SIMs you sell (whether plastic, or eSIM) support multiple profiles, whether that’s multi-IMSI or eUICC.
- Ensure that application developers are given full visibility and control over the network services you offer, as your IoT customers are becoming modern and therefore demand modern, cloud-like solutions. For example, allow customers to view network events in real-time, control their QoS in real-time, and view their charges in real-time.
- Offer these capabilities as broadly as you can and let them consume them as they like, whether that’s API, web portal, or otherwise.
When the dust settles from the iPhone 14 announcement, there will be two categories of MNOs left standing.
First, legacy operators who are clinging to a limited roaming model, losing both consumer and IoT revenues, and wondering where to go next.
However, the second group will be modern companies with a future-focused eye on connectivity trends. These will be identified by how they minimize the use of roaming while ensuring they keep global coverage, open doors for localized connectivity and consumption, and promise their customers unprecedented visibility and control, through a modern, easy to use platform.
