June 17, 2024

eSIM: The Future of Connectivity is Here

What is an embedded SIM?

An embedded SIM, or eSIM, is a small integrated circuit embedded directly into phones and other internet-connected devices. Unlike a traditional SIM card, an embedded SIM does not have a removable physical card. Instead, the SIM profile is downloaded over-the-air (OTA) and embedded directly onto the device’s chip. When a device has embedded SIM capability, it essentially allows users to remotely activate cellular plans or change cellular carriers without having to physically swap SIM cards.

How does an embedded SIM work?

An embedded eSIM uses the same embedded SIM technology found in modem chipsets for cellular connectivity. However, instead of a physical SIM card slot, embedded SIM devices have the SIM profiles stored securely on the device’s chipset. When a user needs to activate a new cellular plan or switch carriers, the mobile network operator (MNO) sends the embedded SIM profile to the device OTA. The device then securely downloads and installs the profile, effectively activating the new service. This allows remote management of cellular connectivity without any physical SIM card swaps. The entire activation process is handled digitally via the device settings and mobile app of the MNO.

Benefits of eSIM

Compared to traditional SIM cards, embedded SIMs provide several key benefits for consumers and the telecom industry:

– Convenience of remote SIM provisioning: With embedded SIMs, users can easily activate new plans, switch carriers or add international roaming packages directly from their device settings or carrier app. This removes the hassle of sourcing physical SIM cards.

– Increased flexibility: Devices with embedded SIM support allow hassle-free switching between multiple active cellular profiles. For example, users can maintain separate work and personal lines on the same device.

– Built-in connectivity: Devices with embedded SIM chips have cellular connectivity built right into the device itself. This removes the need to source physical SIM cards separately for tablets, smartwatches or other IoT devices.

– Over-the-air updates: Mobile operators can easily push OTA updates and patches to embedded SIM profiles. This allows remote management of cellular connectivity without physical access to the device.

– Reduction in physical waste: With no physical SIM cards, embedded SIMs help reduce electronic waste. They also reduce logistics and distribution costs for mobile operators.

– Enhanced security: Since embedded SIM profiles are downloaded digitally during device setup, there is no risk of SIM cards being cloned, altered or swapped like physical SIMs.

Challenges with eSIM adoption

While embedded SIMs provide clear benefits, some challenges still remain around their widespread adoption:

Lack of universal embedded SIM standards: Currently, different mobile operators and device manufacturers follow their own embedded SIM specifications and formats. The lack of uniform embedded SIM profiles and activation standards causes interoperability issues.

Backward compatibility: Older devices may not support embedded SIM technology due to hardware limitations. Migrating existing customer bases fully to embedded SIM will require time.

Limited embedded SIM availability: At present, embedded SIM support is still not available across a wide range of consumer devices. High-end smartphones are slowly adding support, but most basic and IoT devices still use physical SIM cards.

Regional regulations: Telecom regulations in different markets need to evolve to allow seamless embedded SIM profile switching between multiple carriers. Outdated rules can impede cross-carrier embedded SIM functionality.

Security challenges: As embedded SIM provisioning is done remotely, mobile operators need robust systems to ensure embedded SIM profiles and personal data cannot be hacked or misused during downloads.

Reliance on mobile networks: Since embedded SIM removes the physical SIM dependency, device users rely entirely on having a stable mobile internet connection for initial activation and profile downloads. Dead zones can impact the embedded SIM experience.

The future of cellular connectivity

Despite current adoption hurdles, the telecom industry is steadily overcoming embedded SIM challenges. As support widens across operating systems and devices, embedded SIM is expected to replace traditional SIM cards as the norm over the next 5 years. Standardisation work by the GSMA is also improving interoperability.

For consumers, embedded SIM will deliver effortless switching between carriers and greater control over their connectivity management. Device manufacturers favor embedded SIM because it removes the need for physical SIM card slots. Mobile operators now push embedded SIM to drive new recurring digital revenue streams from services. And with growing IoT adoption, embedded SIMs are crucial to enable cost-effective connectivity in billions of new connected devices.

while the eSIM transition remains a work in progress, it undoubtedly represents the future of embedded cellular connectivity. Wider acceptance and standardisation will see embedded SIM technology eventually make physical SIM cards obsolete. The benefits of remote management will redefine how people experience mobile services in the coming years

1. Source: Coherent Market Insights, Public Source, Desk Research
2. We have leveraged AI tools to mine information and compile it.