How the eSIM is Driving the IoT Evolution

Even though the eSIM technology has taken longer than expected, it has now started to be deployed massively and in a wide array of devices. Currently, there are approximately 200 million devices with a virtual SIM. According to the latest research from IHS Markit, in just three years, eSIM will skyrocket and reach one billion devices. Undoubtedly, a change for the IoT’s future.

Explore the most important digital trends that will impact business in 2020 like Wi-Fi 6, XR, XaaS, Distributed and Multi-Cloud Computing, Analytics and 5G on our blog post Top Digital Transformation Trends for 2020

What is an eSIM?

As its name suggests, the eSIM is an embedded SIM card that is about to replace the traditional SIM card.

GSMA, the leading global association of mobile and telecommunications operators, introduced the standard definition in 2013. Early in 2016, they announced the initial specifications for ensuring interoperability among carriers, manufacturers, and platforms.

Being as small as 4 mm length and 4 mm width, the eSIM will have the same functionality as the removable SIM and even more. Rather than having a slot and a card, devices will have an integrated chip, welded to the terminal during its assembly that is valid for all operators. It has eight electric pins like the eight contact points of the traditional SIM. The eSIM is the only virtual SIM standard with global support. This comprehensive approach will boost the Internet of Things by allowing manufacturers to design a new range of products for global implementation based on this embedded SIM architecture.

Among other benefits, the eSIM allows:

  • Higher efficiency and speed of use, implementation, and connectivity.
  • More space.
  • Mobile connectivity for any device, without the need for connection to a computer or smartphone.
  • Simplification of the logistics system of mobile operators.
  • Enhanced consumer experience and new business models through the connectivity of objects.

eSIMs and Connected Objects

One of the main features of the eSIM is the possibility to speed up the activation of devices without going through the point of sale. Moreover, it has a variety of applications in the fast-growing connected objects sector. Smartphones will no longer be the only devices with a communications package. The first object that might spring to mind is the smartwatch, but there are also security cameras or other connected devices in the smart home or health care fields. Fitness bands, intelligent clothes, beauty accessories, portable health devices: The possibilities are endless. Even though we are generally referring to general public uses, it is also possible to envisage uses at the business or community level.

At the moment, inserting a traditional SIM card into connected objects restricts its development. It’s a complicated decision for the customer, who is naturally reluctant to connect more objects with extractable physical SIM cards. With the eSIM, the first subscription becomes a kind of “core” to which customers can add or eliminate connectivity according to their needs, all in a fully digitalized way. The offerings from the operators should evolve to support this multiplication of objects attached to the same package. Operators will play an increasingly fundamental and pivotal role as a trusted partner in this evolution.

Device manufacturers could reap the benefits of eSIM throughout the evolution of IoT design. With small chip technology, devices equipped with eSIMs are becoming more compact and have better resistance and proofing for impact, dust, and water, therefore leaving more room for better batteries.

The Power of eSIMs

New elements emerge in the IoT ecosystem. Objects that were not connected before will need the mobile network so that the eSIM becomes essential. Four factors link the future of the Internet of Things to the eSIM.

  • New physical possibilities: the format of the eSIM is more flexible, small, practical, and efficient than its predecessors. Thus, it allows to enhance the versatility of the connected devices and bring down manufacturing costs. At the same time, it reduces the energy needs of IoT objects.
  • Interoperability with a single standard. The eSIM works on any device and across any network.
  • Greater security. The possibilities of updating are more significant, which raises the safety of the network and the devices connected to it.
  • New business models. The devices will be ready to use. The operator will forget about being a supplier of objects and products.

New Mobile Networks

In a world where connected devices are growing exponentially, the industry works on network segmentation. This way, mobile phones use 4G or 5G networks, and IoT objects connect through other networks, such as Narrow-Band or CAT M.

This will avoid latency between networks for IoT and mobile phones. Sometimes it uses reduced bandwidth as required by the use case being solved. These networks are intelligent, and they anticipate contingencies. The tendency is to move towards eSIM. With eSIMs, users do not need to change their card, as it adapts to the provider of the mobile network, its subscriptions, and the region in which it is located.

5G will be an accelerator for the embedded SIM market. As well it will connect more devices – ranging from low power IoT devices, cars to PC/ tablets – to operator networks.

It will urge on different models, and the user or company can move between networks without physically changing the SIM card. A particularly useful feature when applied to IoT devices.

As the ecosystem evolves, there will be many more possibilities for MVNOs and mobile operators that seek to take part in the IoT space. Yet, this will also put pressure on carriers to guarantee that their networks can deal with potentially billions of new devices over the next few years.

How eSIMs and IoT are Transforming the Ecosystem

IoT is not an isolated technology but a vital component of a process of transformation in all aspects. It creates open ecosystems to connect devices and systems, allowing valuable information to be extracted and used to make sense, in a controlled environment, with no unstructured data.

The new ecosystem offers diverse forms in which consumers get and choose the solutions and devices for their homes, businesses, industries, and cities. This creates a once-in-a-generation, golden possibility for the mobile sector. IoT devices embody a new world with niche demands – particularly for MVNOs and IoT connectivity providers. Experts at the MVNOs World Congress make it clear that IoT technology is by far the most prominent new trend reshaping the industry. The first obstacle is to recognize each player’s role in this very unusual kind of market.

Smaller, more agile businesses that provide global connectivity solutions can become relevant partners to well-established operators in the IoT sphere. As innovative professionals, they make sure end-users get the seamless connectivity they need. This goal can be accomplished through partnering with device OEMs, acting as intermediaries. The key to success lies in the capacity to make oneself indispensable to the partner.

eSIM is revealing completely new revenue streams to mobile operators. They can function as new service providers with all the add-on services to be provided on top of connectivity. Data, monitoring, security, billing, integration with other business, provisioning, and communication services can be bundled and sold as apps. The real challenge presented is to find the correct partner who knows how to succeed in complex IoT ecosystems.

iSIM: The Future

Both iSIM and eSIM are technologies employed for validating users and devices on any given mobile network. Even though the eSIM was the initial innovation, iSIM enjoys broad industry support as it is part of the next-generation SIM standards.

Explore the most important digital trends that will impact business in 2020 like Wi-Fi 6, XR, XaaS, Distributed and Multi-Cloud Computing, Analytics and 5G on our blog post Top Digital Transformation Trends for 2020

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