eSIMs are currently causing a real buzz in the world of connectivity and mobile. How are they different from a traditional SIM?
Pierre Barrial: It is difficult nowadays to avoid eSIMs. Personally, I have met over a hundred MNOs (Mobile Network Operators) from all around the world in recent months and the question of eSIMs has come up in every conversation. They allow a whole host of previously unconnected objects to be connected to cellular networks, allowing numerous new potential uses.
Viken Gazarian: It must be said that eSIMs constitute a major development compared with traditional removable SIM cards as we know them. Now the physical part of the SIM and its software part are separate. eSIMs are not only directly soldered into objects such as watches, tablets and phones, but can also be reprogrammed remotely. The physical component, which guarantees security, now takes up less space within objects, allowing them to be made smaller and more waterproof. Meanwhile, the reprogrammable aspect paves the way for greater flexibility for consumers and is part of the digital transformation taking place among operators.
What uses are you thinking of?
V.G: The ability to incorporate an eSIM into any object opens up a very wide range of possibilities for OEMs (Original Equipment Manufacturers), as well as users. For example, a watch fitted with an eSIM can be connected directly to the mobile network, without the intermediary of a smartphone. This is the principle behind Samsung’s Gear S2 connected watch that we presented at the Mobile World Congress in Barcelona, last February. Once their mobile subscription is activated on Gear S2, users can make calls, receive notifications and use data services, even if their smartphone is switched off or out of reach. That allows OEMs to offer consumers a wider range of services thanks to the greater connectivity of products marketed. Cellular connectivity offers much wider coverage and much higher service quality compared with the Wifi connections previously used by most secondary connected objects. And they can now enjoy that connectivity autonomously. That also means greater flexibility and immediacy for users. Up until now, users had to change SIM card when they changed operator. That is no longer necessary with eSIMs. They will eventually be able to choose which network to connect to for a given period and depending on their location, in order to benefit from the best service at the local rate, by viewing available networks on their device as they do with Wifi at the moment.
P.B: This simplicity of use represents a massive change compared with current practices. For example, imagine you are travelling abroad. Once there, you will be able to choose to retain the profile of your initial operator, under a traditional roaming agreement, but also connect to the local operator’s network. When you get back home, simply reactivate the profile of your national operator. As a user, you will enjoy seamless connectivity without having to physically change the SIM.
The eSIM therefore changes the previous balance established between MNOs, OEMs and users. Who does it benefit?
P.B: eSIMs benefit everyone, although at first sight it could appear that this technology is unfavorable to MNOs since in principle customers could be less loyal than before. In reality, eSIMs will give operators the ability to connect many more objects and therefore to create many more transactions, i.e. authentication to their network, encouraging data exchanges via that network. Operators will therefore move from managing logistics flows designed to sell a physical product – traditional SIM cards – to providing a downloading platform to users to take out a new subscription or add new objects to an existing subscription. This expanded range of services will now be used by operators to build loyalty among their end customers. By reducing the logistical complexity associated with physical cards, eSIM technology will also allow operators to concentrate their investments within their digital transition. In addition to new usages linked to consumer electronics, they will therefore be able to develop new revenue by offering vertical services aimed at companies and users such as equipment fleet management services in the industrial domain or the supply of connectivity for the automotive sector.
V.G: OEMs are therefore positioning themselves more than ever as special partners to MNOs, since their role is to produce high-connectivity products that respond to consumer expectations and to operators’ range of services. For example, 70% of tablets produced around the world today are connected via Wifi. Once equipped with an eSIM, they will be able to connect anywhere, even in areas without Wifi.
How does OT plan to support these developments?
V.G: Our role in this eSIM revolution is to offer the most efficient and most secure technology possible, capable of responding to the needs of OEMs, MNOs and consumers. That is what we did by installing our eUICCs into new connected objects, such as the Gear S2 connected watch from Samsung which we mentioned earlier, and by offering our subscription management solution for loading the profile required to connect it to a mobile network.
P.B: It goes without saying that this comprehensive solution from OT is designed to ensure the confidentiality and security of mobile network operators’ data. Connection, authentication and payment represent three important security requirements in our daily lives. OT is involved in each of them to ensure that the user experience is as simple as possible while remaining secure. In the case of eSIMs, as with all the mobility technologies we support, our role is to make security procedures transparent to ensure that usage is not restrictive for end-users. The challenges in the present case concern the object’s authentication on the network during remote loading of an operator’s profile, extension of the object’s initial subscription to other objects, as well as protection of the data transmitted.
The arrival of a new technology also raises the question of the standards that apply to it. Have specific standards been defined yet for eSIMs?
V.G: A specific standard for connected machines, called M2M, was already established by GSMA a few years ago. This is suitable for objects whose connectivity is managed by the manufacturer, as in the case of cars, for example. In terms of consumer devices, needs and usage cases differ due to the end-user’s involvement in the choice of operator. The first version of a dedicated standard was defined in December 2015. Phase II will be launched in June 2016 to refine this standard and encourage commercial rollout on a larger scale. Phase III will begin next year. Within two to three years, this will result in a totally mature and unified technology to allow mass rollout.
P.B: However, eSIM standardization for consumer electronics does not mean the end of the current SIM card. By 2020, 5.8 billion a year will still be sold worldwide. But they will be joined by more than a billion eSIMs. At the end of the day, eSIMs will above all be a way of connecting ever more objects. Both technologies will continue to coexist according to needs. While SIMs are closely linked to individuals, like their telephone number for voice services, the flexibility offered by eSIMs, which are irremovable so necessarily linked to the object, will be particularly relevant to data services, for which the user’s telephone number is unimportant.