E-SIMs: Opportunities & Implications for MNOs
2016.05.26   |   32 pages   |   Convergence & M2M

Author:
Nicola Warren


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Operator ownership and control over SIM cards is being threatened as OEMs and device manufacturers push for embedded SIMs that are operator-agnostic.

Early moves by Apple were strongly resisted by MNOs, but recent specifications released by the GSMA indicate that operator attitudes are changing.  Operators are seeing the opportunities that such developments can bring, particularly in terms of increasing the number of M2M connections and potential for consumer wearables and IoT devices.

Progress is also being seen in terms of operator-agnostic SIM technology being included in smartphone devices, i.e. movement beyond data-only devices.  This sits less comfortably with operators as it suggests potential disintermediation of primary subscriber relationships and relegation of MNOs to the role of dumb pipe commodity providers.

This report aims to understand developments in e-SIMs in order to identify the associated opportunities and threats so that MNOs’ overall approach to operator-agnostic e-SIMs can be informed. 

 

Companies: Apple, GSMA, Google, AT&T, NTT DoCoMo, OECD, Enexis, Samsung, Airtel, Swisscom, Limmex, Gemalto, Telefonica, Vivo, Jersey Telecom Wholesale, Blackberry, Movirtu, Gigsky, Verizon, Microsoft, Transatel, Zong, Truphone

Countries: USA, Netherlands, Japan, Africa, Switzerland, Brazil, UK

Keywords: soft SIM, remote SIM provisioning, Windows SIM, e-SIM, SIM manufacturer, managed network selection, operator-agnostic, e-SIM issuer, standardisation, Apple SIM, wearables, roaming, SIM ownership, Project Fi, SIM specification, disintermediation, embedded SIM, IOT, OEM, distribution, private virtual network operator, Virtual SIM, subscription manager, IMSI ownership, smartphone, M2M, MNP, handset subsidies, churn,

1

Overview

1

2

Introduction

2

2.1

Background to the Report

2

2.2

Report Content

2

2.3

Currency and Conversions

3

2.4

Further Questions and Feedback

3

3

SIM Evolution

4

3.1

Early and Current SIM Cards

4

3.2

GSMA Embedded SIM Specification

4

3.3

GSMA Consumer Remote SIM Provisioning

5

4

Factors Influencing E-SIM Development

7

4.1

Introduction

7

4.2

Leadership of the E-SIM Solution

7

4.3

Standardisation Beyond Technical Aspects

8

4.4

Regulation

8

4.4.1

MNP

9

4.4.2

IMSI/ SIM Ownership

9

4.4.3

Competition

10

4.4.4

Subscription Manager Function

10

4.4.5

Know Your Customer

10

4.5

Consumer E-SIM Education

11

5

Potential E-SIM Challenges for MNOs

12

5.1

Introduction

12

5.2

Increased Churn

12

5.2.1

Increased Incidence of Multi-SIM Use

12

5.2.2

Shorter Term/Prepaid Plans

12

5.2.3

Permanent Churn

12

5.3

Decline in Handset Subsidies

12

5.4

Price Pressure

13

5.5

Loss of Roaming Revenue

13

5.6

Disintermediation

13

5.7

Lower Security

14

5.8

Power of E-SIM Issuer

14

5.8.1

Growing Role of Subscription Manager

15

6

E-SIM Benefits and MNO Opportunities

16

6.1

Introduction

16

6.2

M2M

16

6.3

Incremental Connections of New Device Types

16

6.4

New Consumer Propositions

17

6.5

Becoming an E-SIM Issuer

18

6.6

Distribution Costs

18

6.7

Handset Cost Reduction

19

7

E-SIM Applications

20

7.1

Introduction

20

7.2

M2M Services

20

7.2.1

Swisscom, Switzerland

20

7.2.2

NTT DoCoMo, Japan

21

7.2.3

Jersey Telecom Wholesale

21

7.3

Consumer-driven SIM Swapping

22

7.3.1

BlackBerry

22

7.4

Consumer Managed Network Selection

23

7.4.1

Apple SIM

23

7.4.2

Samsung Gear S2 3G Classic

26

7.5

Third Party Managed Network Selection Service

27

7.5.1

Project Fi

27

7.5.2

Windows SIM

27

7.5.3

Zong, Pakistan

28

7.5.4

Truphone

29

8

Key Findings and Conclusions

30

9

Recommendations

32

 

Appendix – Feedback Questions

33

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