eSIM Disrupts an Emerging Market
eSIM, or embedded SIM, card is the talk of the town. It has received critical praise and the role of eSIM can’t be clearer:
- Device manufacturers can take advantage of reduced costs and gain more space on the processing board.
- Service providers can produce new revenue streams.
- Massive amounts of data can be collected from hundreds of IoT devices.
As for consumers, they don’t have to put up with any connectivity gaps anymore. They can access the internet from any place, change operators easily on their phone, store multiple profiles on a device for home and work use, add devices with ease, and enjoy simpler travel scenarios.
Service providers have to tread carefully. If they resist adoption, it is only going to hurt them. However, if they proactively join the party and embrace eSIM as a means of a separate revenue generation service, they can extend their mobile market presence.
eSIM triumphs over physical SIM because:
- It has a cost-efficient production, taking inventory and other expenses of physical cards out of the equation.
- A highly powerful solution that aligns with the modern digital landscape.
- Create unique, distinct “out of the box” experiences.
Service providers will combine eSIM and automation to transform the face of the entire industry. Rather than toiling hard with lock-in contracts, the future is ‘deliver every minute’ alternatives.
Monica Zethzon, who spoke to Ericsson ambassador Ronald van Loon recently, serves as the Vice President and Head of Solution Area Communication Services at Ericsson. She stated:
“This is the evolution where you no longer have to have a physical Sim card that you put into the device. But rather, the eSIM is embedded in the device during manufacturing.”
Moving forward, let’s review the use cases of eSIM and how it affects consumers and service providers.
Try & Buy
Perhaps, the most significant aspect of eSIM is Try and Buy for consumers. Around 86% of the survey respondents revealed that they would like to test at least one feature, reflecting their curiosity. However, the real application of Try and Buy belongs to 5G. With the expansion of 5G, more gaming, streaming, and AR/VR shopping and learning services are going to be introduced. With Try & Buy, 5G use is not limited to early adopters, and a greater number of people can enjoy these services. It is the ideal incentive that can make laggards take an interest in 5G.
According to Zethzon,
“You have an existing eSIM profile, and now you opt-in for something else that’s just a little… let’s say richer or faster. This new profile is just downloaded and activated, replacing the one you already have. Just like that, in an instance, it’s easily available to you. Assume you tried it for three days and decide, “No, I want to go back, this wasn’t worth it”, okay you can just load the previous profile.”
Service Provider Impact
Try and buy is not a new concept. It has been applied in marketing to great effect. It also creates positive results with content and apps. Now, it is expected to boost mobile communication. For instance, it can be used for premium speed, event offers, exclusive content, new devices, and other similar service offerings.
In these types of instances, a customer can download a temporary eSIM subscription that remains valid for a couple of days. During this time, they can experiment with new offerings without paying any cost. If they end up liking those services, they can always convert their temporary subscription to a permanent one.
Ease of Adding Devices
With the popularity of smartphones, it is astonishing to realize that consumers want mobile connectivity for other devices too. According to a survey, 94% of the respondents wanted to connect and pay for 1 or more additional device, a stunning 45% wanted to connect and pay for 2 or more additional devices. This is really high numbers and a lot of revenue is sitting there. Of all the types of devices 63% of respondents wanted mobile connectivity for their laptops. However, this interest has not been reflected in real-life adoption. One of the reasons consumers don’t activate LTE on their laptops is a lack of awareness. With other devices, the stumbling block is the cost; smartwatches with cellular support cost 25% more. Also, consumers have reportedly experienced difficulties with the enrollment process,many users believe that the process of obtaining a smartwatch subscription is quite time-consuming. With the variety of 5G devices such as AR glasses on the way, it is important to make it easy for consumers to get these subscriptions.
For example, consider eSIM-enabled smartwatches that function independently. If customers are facilitated by service providers to enjoy automated eSIM activation, they can go live within minutes. When combined, eSIM and automation can introduce innovative user experiences across different gadgets.
Service Provider Impact
Connected consumer devices include tablets, smartwatches, laptops, and other secondary devices. Contrary to some misconceptions, the smartwatch is not the most popular connected consumer device. Instead, a laptop is the most used device. Tethering is inefficient when it comes to laptops because it drains the battery. On the other hand, WiFi hotspots are not well-suited for businesses as they pose security issues. By promoting an add-on subscription for a laptop or tablet at an affordable price, things can settle well. Zethzon stated:
“How many of us have devices that we’re not connecting? How many have a laptop that has in-built LTE capability, and you never use it, you just use WIFI because you haven’t bothered figuring out how to initiate this. Freedom of reach, the independence from signing up to Wi-Fi networks all over the place? When you could simply bring your laptop because it’s as connected as your phone.”
Suppose wherever you take a trip, you can link to an operator and activate a subscription on your smartphone. For now, refer to this service as Travel Specials. Around 60% of smartphone users acknowledged that they would use Travel Specials to activate a local subscription. During trips to new countries, consumers who buy local SIM cards or use portable WiFi routers are especially impressed by Travel Specials. They are conscious regarding their spending and connect to several devices at once. They make up around 60% of individuals who control their mobile data. Zethzon stated:
We did this study we looked at what we called “travelers.” If you take the ones that travel abroad, at least once a year, and then we excluded if you are only traveling within the European Union, because that behavior was a little bit special. It turns out that 45% of these actually buy a local sim to connect to a mobile network when they are abroad.”
Service Provider Impact
Travel specials prioritize travelers who use mobile connectivity abroad. According to Juniper research, silent roamers comprised 51% of the total roamers in 2018. This is a significant revenue opportunity for service providers. They can provide a local tariff and offer a service charge. During their visits, users can download any eSIM at will, so they can continue to enjoy a connected vacation without interruptions. Travel agencies and airlines can also explore this space. They can provide complementary mobile data to their users. As a result, the customer, airline, and the service provider everyone gets on the winning side.
Concerts, sports, and trade shows capture the attention of many users. An offer can be used to target consumers with similar interests. For instance, consider an ongoing football league. Sports fans can search the tickets for their games and the service provider shares QR codes on their website to turn them into subscribers. Over the course of the season, they don’t only get ticket information, but also receive news and videos on their phones.
Service Provider Impact
Service providers can use events to collect useful insights regarding their consumers. By targeting people with the same interests, they can understand their customers and tailor their offerings accordingly.
The Industry Game Changer
eSIM provides a wide range of advantages and value to both consumers and service providers. With a strategic combination of automation, it has the potential to become a game-changer in the industry.
By Ronald van Loon