Monetizing eSIM
As we have already outlined, eSIM currently carries a higher per unit cost than traditional removable SIM cards, which is no doubt a factor in holding back its rate of adoption. Like any new technology, for eSIM to represent an attractive proposition and achieve widespread adoption, it must meet two conditions - it must offer clear revenue opportunities and be affordable enough to deliver positive margins.
There is a sense that each of these conditions follows on from the other. For example, if increased digitisation and streamlining of end-to-end connectivity services does eventually mean e-SIM reduces rather than raises operational costs, that is likely to be when operators, OEMs and system integrators become more proactive in exploring new revenue options for e-SIM.
For Gregory Gundelfinger, the promise is already there, just waiting to be realised. “E-SIM opens significant opportunities to reduce costs, optimize businesses and create new revenue streams for all kind of industry players,” he said. “MNOs and MVNOs, for example, can expand and compete globally, they can offer innovative and flexible e-SIM data roaming as well as provide value added services that complement underlying IoT connectivity.
E-SIM opens significant opportunities to reduce costs, optimize businesses and create new revenue streams for all kind of industry players,
“System integrators, IoT/M2M vendors and OEMs can also complement their standard offerings by choosing the right partner that enables them to add e-SIM and cellular connectivity as part of their solutions.”
Dialog’s Amila Saputhanthri argues that, in consumer markets, increased digitisation will eventually lead to reduced customer service costs and operational overheads. Instead of buying SIM cards from shops or ecommerce sites, smartphone owners will buy virtual SIM profiles and subscriptions via an app. At present, however, with many operators relying on scannable QR codes to provision services, they are still having to rely on the same kind of models used to sell SIM cards, only selling printed codes instead. The evolution of e-SIM management apps will create opportunities to make significant operational efficiency savings.
Telus’s Andrei Ivanov makes the point that e-SIM will create new revenue opportunities if, as expected, it drives sales of product categories like wearables. For operators, as more devices become available on the market fitted with e-SIM, the more opportunities they will have to up- and cross-sell services and packages, for example by offering shared data plans for multiple devices, with the option to add more as required.