eSIM-Enabled MVNOs
As with most disruptive innovations in the mobile market, MVNOs are well placed to capitalise on the opportunities being opened up by eSIM. The digitalisation of network service provisioning fits well with the increasing number of virtual operators adopting online, digital-only business models. MVNOs have also been at the forefront of the trend towards short term, SIM-only deals, and stand to gain more from any further loosening of contract lock-ins than the big carriers.
In addition, e-SIM is widely seen as opening up more opportunities in the kind of niche markets that MVNOs tend to thrive in, such as travel and the many different industry verticals adopting IoT.
However, virtual operators do face certain challenges in embracing the e-SIM opportunity, one of them being higher costs compared to removable SIM cards. Dialog’s Amila Saputhanthri explained: “eSIMs aren’t cost effective when compared with physical SIMs, so this is a major drawback. eSIMs add more operational costs in the form of e-SIM platform subscriptions and capital costs in terms of adding the eUICC to devices.”
One of the reasons e-SIM raises opex is that it requires the ability to manage multiple network subscriptions simultaneously, rather than just one. As Telna’s Gregory Gundelfinger puts it, “the main technical challenges for companies to launch e-SIM are the integration of multiple connectivity solutions and the barriers of integrating with different networks.”
With an e-SIM smartphone, users will be able to run multiple network services from the same device - for example, different numbers for work and personal use, a specialist roaming contract for travelling, perhaps even separate data packages to take advantage of things like zero rating offers for high traffic applications they use frequently. At the same time, they might want to connect several different devices - a smartphone, a smartwatch, a laptop - to the same data plan.
This creates new levels of complexity for operators, such as the need to manage resources as consumers switch services on and off, activate services on demand, manage hand over between operators, integrate several different devices and their embedded SIMs on the same service. This all raises potential issues with deployment, compatibility, network support and fleet management.
In order to handle this increasing complexity, operators are turning to remote subscription management platforms provided by third parties. While outsourcing might represent an additional operational cost, such management platforms also help to streamline the complete SIM lifecycle in a way which ultimately drives down costs. Dialog’s Amila Saputhanthri argues that this is a necessary step on the road to digitalization: “In order for consumers to enjoy the full potential of e-SIM, the purchase flows should be completely digitized,” he said.
For Andrei Ivanov of Telus, subscription management platforms deliver their own economies of scale: “Cost efficiency is realised through better availability and lower cost per unit, which can be achieved through multiplexing several subscription management platforms,” he said. “The biggest challenge is the readiness of MNO’s BSS and channel systems for multi-SIM devices with eSIM.”
Gregory Gundelfinger believes that the key to achieving the required efficiency gains and cost savings lies in adopting cloud-based service models. “To implement eSIM in a cost-effective way, companies should use connectivity partners that can handle a Network-as-a-Service (NaaS) model as well as the technical and commercial integrations needed,” he said.
“Telna provides a huge amount of flexibility for e-SIM integrations with cloud infrastructure and a centralized API platform. It offers scalability on demand and ensures the highest level of network support. It takes care of the network commercial agreements, network infrastructure, eSIM integrations, and delivers the cellular component seamlessly all on an opex-based model. Customers can access Telna’s agreements and cloud infrastructure without incurring huge amounts of up-front costs.”
