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November 22, 2016

E-SIM for consumers - Transforming Telecommunication Industry

Author: Vishvajeet Ramesh Saraf, Senior Technology Architect

"E-SIM (Embedded SIM) for consumers" is creating a buzz in telecommunication industry. Mobile network operators are gearing up for assessing the impact and transforming themselves to cope with the change. In a traditional removable SIM model (what we use today in our mobile phones), the consumer is able to change SIMs by physically removing a SIM and replacing it with another. In this scenario the physical SIM is personalized for a specific mobile network operator. 


"Reprogrammable SIM" is a step towards the new era of Embedded SIMs where consumers will not need to change the SIM while changing the new operator. Reprogrammable / Embedded SIM technology has seen a large adoption in M2M market especially in automotive sector due to advantages it provides. But recent advancements in E-SIM specifications for consumer application generates a need for us as system integrators and enterprise architects to think and focus on this area. 

Changes over the years because of following reasons -

1.       Apple released its "Apple SIM" (for iPad Air 2) couple of years back. This technology enabled consumers to select a network operator (limited preconfigured options) without changing the SIM physically. This was one of the key triggers to shift towards E-SIM as mobile network operators want to avoid a situation of MNO disintermediation by an OEM/OTT-centric customer experience

2.        E-SIMs give mobile phones/device owners the facility to compare different networks and select service dynamically.

3.    GSMA is focusing to align all ecosystem participants on a standardized reference architecture - "Remote SIM Provisioning (RSP) Architecture for consumer Devices". (Ref - RSP Technical Specification Version 2.0 published on 14 October 2016).  

4.     IoT devices are getting smaller. These devices will need to have cellular connectivity. E-SIM makes this possible

Recent advancements mostly focuses on consumer applications. This change will drastically modify the existing ecosystem. Another reason to adopt this technology in consumer market due to current and future launches of ESIM enabled devices (smart phones, smart watches etc.).

How the overall ecosystem will change -  

1.       GSMA reference architecture suggests few new roles for E-SIM ecosystem. Also there are enhancements in existing roles according to     GSMA specifications. Description of those roles are detailed out in - RSP Technical Specification Version 2.0 published on 14 October 2016. Those new roles and interactions between those roles describe the new way of activating, downloading and deleting profile on device. GSMA also describes need of new systems to generate profile, deliver profile and a system/methodology which will enable not provisioned or pre provisioned device (E-SIM device).

2.    OTA provisioning / remote provisioning will add additional systems / components to overall ecosystem 

3.    Billing collection, service suspension/deactivation/termination for various reasons like defaulting, fraud usage need to be rethought. Billing process which supports migration from SIM to eSIM model and mapping customer to new plan, discount and offer will also have impact

4.    The era of Physical SIM cards will come to end slowly. This will not happen overnight and hence a time frame where devices with physical SIMs and E-SIM enabled devices both needs to be supported by MNOs

Impact on Digital ecosystem -

E-SIM introduction will have impact on entire customer journey.

1. Activating the service (without store or contact center interaction) - New scenario will not need customer going to physical store or calling contact center agents for activating the service. The new ways to activate the E-SIM devices will become primary touch points for customers. Pre bundled apps, activation through QR codes, activating using Kiosks will be new ways of activating the service

2. Activation via Store Agents and call center representatives - New software applications need to be built for store agents and call center representatives for clients who still want activation and related services via these channels. These applications need to be built to comply with GSMA standards

3. Help & Support - Help & support channels need to update the E-SIM specific FAQs, articles, process.  These categories will be based on new processes for exchanging existing devices with new E-SIM devices, returns etc. Web chat application needs to add additional E-SIM related categories. People training will play an important role here

4. E-Commerce applications - In current situation, E-commerce applications check for available SIM inventory before device and plan can be sold to customers. Inventory check process will not be necessary for E-SIM devices.  E-SIM may have impact on the way product bundles and plans are being sold. This will trigger change in Product catalogue

5. Marketing, Offers, recommendations - E-SIM provides facility to switch the network provider dynamically. This feature can be seen as a threat for MNO as the probability to lose a loyal customer will be high. This trend may force to offer competitive rates by different ways. Customer's usage, her location, network availability, time & statistics of eSIM / non eSIM needs to be analyzed to propose relevant recommendations. New Loyalty plan with low roaming charges can be a boon to end users.

6. Secure Delivery of activation code - New processes will be in place to deliver activation code in a secure fashion to end user.

Advantages to Consumers & MNOs -

1.      Consumer can now easily switch between carriers without any hassle SIM swapping

2.      A customer can switch between networks in areas where the network coverage of one provider is better than the other.

3.      A customer using eSIM enabled device can switch between operators to take advantage of pay-as-go data plans without signing up for a separate long term contract. This may trigger huge sales in prepaid markets.

4.      Frequently roaming customer can benefit from using local plans rather than pay huge premiums for Data roaming.

5.    Even a small % of customers connect additional IoT devices (as secondary devices) enabled by e-SIM mechanism, MNO will earn billions of revenue due to increased data usage. Hence E-SIM will be seen as a revenue generating opportunity rather seen as a threat or cost center

Opportunity for Enterprise Architects & System Integrators -

Many network operators have already started programs to assess the impact of E-SIM trend. Impact includes changes to existing systems & applications, processes & operating model. Enterprise architects should have Industry specific EA offerings to tackle "Emerging Trend impacting business" scenario. This would definitely create opportunities for EA to present a business case, identify the gaps and recommend strategic initiatives identified as outcomes of EA assessment and roadmap. System integrators can then deliver the strategic initiatives by developing, changing and transforming the necessary landscape 



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