The prospect of a reprogrammable embedded SIM (eSIM), capable of easily switching user profiles in wireless devices, has been around for some time. Some of the first implementations of eSIM were in 2016 in the Samsung Gear S2 3G smartwatch and the Apple Watch 3.
Carriers understand the value of the eSIM in connected devices, as they are designed to drive sales. As more devices become available on the market fitted with eSIM, the more opportunities carriers will have to up- and cross-sell services and packages.
For example, Apple’s new Family Setup feature is an untethered first-Apple product targeted at children and seniors. With this feature, users get their own Apple account, a phone number, and parental control features, which parents can access from their iPhones.
Carriers are wary of eSIM
The eSIM in the smartphone, however, remains an uneasy prospect for carriers, as they fear a competitive landscape in which users choose their service providers on the fly from their phones, resulting in massive churn. Apple has dragged the operator community into this realm, but it is playing nice with carriers so far as it isn’t selling the iPhone with the eSIM enabled as the primary service activation method; it’s selling phones with both a physical and eSIM slot, and the physical slot is always filled by default with whatever carrier a customer signs up with.
As such, there is little competitive impact on the market today from an e-SIM enabled smartphone. While the Samsung Galaxy S20 is eSIM-enabled, the three nationwide US carriers – AT&T, T-Mobile and Verizon – have not enabled the capability.
Support is accelerating
But the trend toward digitalization is changing adoption trends. Digital-oriented MVNOs in the US are moving toward eSIM, while operators across Europe appear to be ramping up their adoption, working hard on the user experience to make it seamless and marketing the capability as digital onboarding.
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Carrier support for eSims has accelerated noticeably in the past few months, as many operators see the convenience in being able to activate new customers without having to deliver them a physical SIM during a protracted pandemic that is seeing governments enact another round of lockdowns.