eSIM: what is it for?

The next step in SIM cards evolution is not about squeezing them into even more miniscule form factor, it’s about replacing them at all — with a profile stored in connected device.

Recently, Samsung introduced the Gear S2 Classic 3G smart watch which is the first device with eSIM support. Although it’s a pilot, this technology is bound to spark a serious discussion before long. eSim is expected to be implemented in the upcoming iPhone 7 and Apple has always been at the forefront of the industry in terms of adoption and commoditization of new technologies and standards in mobile tech.

As you may remember, it was Apple who urged all telecom companies, from the biggest corporations to no-name Chinese vendors, to migrate to the microSIM and then to the nanoSIM standard. Does a new stage of miniaturisation await ahead?

No, this is not about squeezing SIM cards into even more miniscule form factor (in their desire to make SIM cards as small as possible, some went as far as carving out a chip from a nanoSIM card and stick it to an SD card for use in combined slots). eSIM — or embedded SIM — presupposes no external chip at all. Instead, all subscriber data is stored on the device itself, initially downloaded remotely.

Those who actively monitor the news agenda on the mobile front would say: “Wait a minute, isn’t there already virtual SIM cards available?” Yes, there are: Apple SIM, Project Fi and the VSCA Alliance.  Are these the same as the eSIM?

No: eSIM is a step – or even a whole leap – forward. In previous solutions, a SIM card profile is downloaded remotely, but on the device level, this profile is stored on a SIM ‘dummy’ which could be reused in a different handset. In the case of an eSIM, there are no replaceable ‘dummies’ at all, and the chip itself is embedded into the handset.

The GSM standard would not change because of the new SIM technology. It functions the same way, except for the fact that you’d change profiles instead of physically swapping a sim card out of your device.

What’s the point?

Firstly, the use of eSIM’s allows for a sleeker handset design: there is no need for physical SIM card slots.

That’s good news for device producers as it will be easier to create dustproof and waterproof designs. To an even greater extent, eSIM adoption would pave the way for more wearable vendors who design smart watches or fitness trackers: such devices would be able to get their long-craved autonomy from handsets or WiFi networks and become permanently connected, without the need to sync them to your phone.

Also, handset vendors will get a head start in their interaction with mobile carriers who traditionally exercise control of the device market. Nowadays vendors have to negotiate their cause with carriers in order to deliver their products to the shelves, but they would be able to leverage eSIM and establish direct connection to the retail market.

Vendors would be able to sell their products through their branded online stores, offering users a choice of subscription (with eSIM, vendors can remotely ‘switch’ on and off any operator) or, even better, a default operator subscription. This is why some of major carriers strongly oppose the roll-out of eSIMs: they are used to playing the main part in the carrier-subscriber interaction and are not going to enjoy increased competition.

Security is also vital here. Otherwise, why would we bother to cover this topic on our blog? A regular SIM card is easily disposed of when a person’s handset is stolen or lost. In this case an outsider, having disabled all restrictions (if it’s not an iPhone), can use the newly obtained device with a different SIM card of resell it.

But this trick would not work on eSIM: one would not be able to download a new profile without the legitimate owner’s password; moreover, on each reboot, the handset will download the previous profile, making it possible to locate the stranded device.

eSIM have already been standardised by GSM Alliance and a number of major carriers voiced their support for the new technology, including AT&T, Deutsche Telekom, Etisalat, Hutchison Whampoa, Orange, Telefónica and Vodafone.

However, the migration isn’t likely to happen overnight. Smart Insights forecasts the sales of eSIM-enabled handsets would total 346 to 864 million units by 2020. Obviously, it’s a very conservative forecast, and the industry support does not equal adoption: regular SIM cards are well alive and kicking: by the end of the decade, their sales are expected to drop just 16%.