PARTNER INTERVIEW: Over the coming years eSIM is expected to achieve astounding growth in both the consumer and IoT sectors. It forms a central part of operator digital strategies and opens many new use cases.

Here, Mobile World Live speaks to Thales’ Marketing Manager Marylene Arnoux-Roetynck about the status of the technology and operator opportunities brought about by eSIM.

Mobile World Live: How would you assess the current status of the eSIM ecosystem and the main trends?
Marylene Arnoux-Roetynck (pictured, left): The journey to eSIM started with M2M industrial applications over ten years ago and we are now seeing it widely adopted across a number of sectors, perhaps most notably automotive.

The last two years, though, has been about equipping the consumer market. There had been limited activity here prior to Apple’s release of its eSIM compatible iPhones in September 2018, but this is where it really began to take-off.

Other device makers have now followed and there are currently almost 70 compatible consumer devices comprising smartphones, smartwatches and other wearables, connected PCs or tablets. Going forward, we expect further drastic growth with more than 1 billion compatible consumer devices shipping annually by 2025.

Globally around 215 mobile operators worldwide not only support eSIM but have launched commercial propositions around it.

For telecom operators eSIM is seen as almost as important as 5G compatibility in smartphones. A recent GSMA Intelligence telecom operator survey found respondents prioritised devices compatible with both eSIM and 5G technology.

What advantages does eSIM offer to operators, and how does the technology fit into wider digital strategies?
Remote SIM provisioning contributes strongly to operator moves towards fully digitalised distribution channels, which in turn allows them to greatly improve customer experience.

By allowing simple and instantaneous addition of subscriptions onto a device, users can achieve instant connectivity and service. It also contributes to reducing logistical complexity and is part of what a fully digital experience is all about.

The importance of this ability was underlined during 2020, as operators embracing digital were able to launch campaigns to recruit customers amid lockdown measures imposed as the pandemic took hold.

A new breed of digital communication providers (CSPs) has also emerged, which place eSIM as a vital element of their proposition. These players put extensive digital transformation into practice and redefine the B2C value proposition.

For example, Telefonica Germany offers customers the ability to sign up for eSIM via the company’s mobile app called “MEIN O2 APP”. This allows the activation of a subscription from the comfort of consumers’ own homes or on the go, rather than them having to visit a physical retail store.

Allowing end users to complete a greater number of enrolment steps from home using digital methods is an important and growing trend, which Thales is supporting many operators with.

Using the Thales Trusted Digital Journey solution linked to our eSIM Management server, we also can provide tools for online trusted digital identity verification (also referred to as eKYC) and payments from a tokenisation platform.

What steps can operators take to encourage consumers to adopt eSIM and what potential challenges do they need to address here?
Even in the context of the fast-growing eSIM market and clear advantages for all parties, achieving commercial success may not always be simple. The right strategies to persuade consumers and ensure the move to the technology is a smooth one need to be put into place.

In our e-book on this subject, available here, we have covered this in great detail but there are several main elements to consider.

Firstly, providers should aim to support as many devices as possible and make the technology available to everyone.

In addition to outlining tangible benefits to consumers, such as opening access to innovative new services, free exchange from SIM to eSIM can incentivise consumer adoption.

Providing a seamless experience for consumers to switch to eSIM is very important, ideally using online enrolment and ID verification (also referred to as eKYC) where local regulations allow.

In terms of aftercare, operators must ensure they have easily accessible customer service channels providing simple information in place alongside support from staff familiar with the system.

As with the move to any modern, digital technology there are some operational changes brought by eSIM.

For CSPs without existing online processes, they will need to find ways to enrol users with eSIM. One way is to use a physical element to trigger the eSIM activation through a QR code voucher available in store or sent by mail before eventually developing fully digital facilities. But solutions to support the transformation towards a digital journey using eSIM are also available with the digital voucher or carrier app.

Once launched, operators need to look at the future and anticipate how their systems will cope with a rapidly growing number of eSIMs. They need to be prepared to get scalable because traffic could get very high.

Thales is here to help address these issues. We offer the infrastructure to allow high-level services and can help to manage peaks and potential incidents; we can also help maximise eSIM adoption and usage thanks to providing training, as well as marketing and consulting on use case design.

As a key player in the sector could you give us some examples of how established and challenger operators have utilised eSIM to differentiate and improve their customer offering?
With more than 250 platforms covering Consumer, M2M and IoT markets Thales occupies a unique position in the eSIM sector, working with both traditional operators and a growing number of CSPs, including global challenger carriers. We have seen many different ways of exploiting eSIM across these different types of providers.

Established operators such as Telefonica, Three and A1 Group have launched eSIM through a group strategy. In their biggest countries they deployed solutions which allowed them to get started quickly, often this meant selling physical vouchers which had no immediate impact on their back end.

Since then, many have progressed to digital sign-up methods, used their own mobile app and in some cases offered eKYC. Other large providers have offered eSIM through a multi-SIM service, like when they launch a new smartwatch, along with related price plans covering multiple devices.

Zain KSA, for example, started to offer weekly and monthly unlimited eSIM packages, which are exclusively sold through digital channels. Those packages can be activated and recharged on its app.

In Thailand, AIS offered the first eSIM for roaming abroad, which can be activated in many Asian countries. The advantage is that you can download a QR code sent by email and activate on entering a new country.

In terms of interesting initiatives from challenger players, we have seen some global CSPs offering worldwide services using eSIM. They can allow profiles to be on-boarded very rapidly through their carrier app to connect with customers wherever they are in the world.

Smaller CSPs often aim for an all-digital proposition. Here, eSIM is part of achieving that aim with several also developing new, unique use cases using the technology.

How prevalent do you think eSIM will be in the long-term and what new uses do you expect to emerge?
The ecosystem is entering the phase of scaling and the industry expects the transition to accelerate very fast in the next two-to-three years.

The whole ecosystem has become aware of the need to go digital in mobile subscriptions distribution and, of course, this is in favour of eSIM. We have seen more and more operators launching mobile apps or using digital vouchers for eSIM activation, which shows strong interest in digital solutions.

There are new use cases being introduced such as roaming and players offering connection on several devices under a single contract. The latter can be used for tariffs aimed at families, but also for enterprises. Here, thanks to Thales eSIM Generic Voucher, we are able to activate mobile family subscriptions.

It is clear eSIM Solutions are a central component of offering a complete digital journey to obtain a subscription. However, this is not the only required step. We also need digital enrolment and authentication and digital payment methods. Providing all of the digital bricks is an area Thales is very experienced in through the complete Thales Trusted Digital Journey.

IoT is often discussed as a major use case for eSIM. What is the current status in this area and how do you see this market developing?
The number of connected objects, and those using cellular connections, is certain to increase in the coming years. To bring solutions to the whole ecosystem and simplify management of IoT devices for manufacturing and in-field scenarios eSIM is a key element.

If we look at another GSMA Intelligence survey, 80% of the companies interviewed (comprising telecom operators and industrial or services companies) considered eSIM as an important asset for IoT developments.

This shows eSIM technology is well understood by stakeholders as a mature technology bringing tangible benefits.

In addition to uses in traditional consumer and B2B markets, we see a new sub-category emerging here, consumer IoT. There are a range of new connected consumer devices appearing such as e-bikes, smart home devices, robotic home care devices, healthcare wearables and sleep trackers.

There are all kinds of new devices being introduced across all sectors, some low power without screens or user interfaces. To better address these, there is a new GSMA group working on the evolution of the current specifications, where Thales is a strong contributor.