Global demand for eSIMs is skyrocketing — in 2021, there were 1.2 billion eSIM-enabled devices. This figure is expected to rise to 3.4 billion by 2025. But what exactly is the eSIM future? In this article, we’ll answer this question based on the available eSIM trends data and our predictions.
2022 was an important year for the telecoms sector. A major move in the right direction by Apple had the industry in an uproar, pushing eSIM further towards mainstream adoption in the consumer market.
After a slow uptake, since it was introduced in 2016, momentum for eSIM technology was anticipated to boom but remained slow in 2022. Operators are very lethargic in adapting eSIM which impedes the expansion of the market.
In 2018, 2 years after consumer eSIM was launched, 45, or 3.6%, of operators around the world had eSIM implemented and available to their users.
This, however, isn’t surprising, considering there had only been a few eSIM-enabled devices and awareness among consumers was low.
4 years later, in 2022, the number of operators offering eSIM services grew to 260. That makes around 20% of operators globally (total number of operators = 1,250, source: GSMA). Considering it’s been 7 years since the technology was launched and offers plenty of benefits to operators and consumers, the number is surprisingly low.
Nevertheless, telcos still seem to be hesitant to embrace eSIM. However, they need to reconsider their eSIM strategies. Operators will be forced to launch eSIM services for their users if the rumours of iPhones bringing their eSIM-only capabilities to Europe are confirmed. But why wait until it’s inevitable when you can act now?
To help telcos make an informed decision about launching a consumer eSIM proposition, we collated relevant data and insights related to the consumer eSIM market. We analysed the development of the eSIM market over the past 7 years and available forecasts and predictions to present what the future holds for those who decide to take a leap.
eSIM support across consumer devices
eSIM was first introduced by the GSMA in 2010, primarily to serve the Internet of Things (IoT) segment. However, soon after it became apparent that the same technology could be applied to consumer smartphones, Apple became the primary advocate of the idea. The company’s main motive was to minimise the extremely valuable real estate that a SIM card occupies in their devices.
Surprisingly, when the consumer use of eSIM was approved by the GSMA in 2016, the first handheld device supporting eSIM technology was released by… Google! Its Pixel 2 smartphone was launched in 2017 and, since then, the number of eSIM-compatible smartphones hasn’t stopped growing. Apple, however, was quick to follow in Google’s footsteps and in 2018 introduced eSIM support on iPhone XR and iPhone XS. Currently, Samsung boasts the largest portfolio of eSIM-compatible smartphones with 22 models (as of March 2023).
Another notable moment was when Motorola revealed its RAZR model in 2019. The smartphone had no physical SIM slot, which made it the first eSIM-only smartphone in the market. However, at that time, not many telcos were supporting eSIM, which significantly narrowed down the number of operators for end-users to choose from.
A major step towards eSIM-only functionality was made quite recently by Apple. Earlier this year in April, following the launch of the iPhone 14 as eSIM-only in the US, Apple continues to embrace eSIM technology. Recent reports indicate that the iPhone 15 will also be eSIM-only in Europe. This move will further reinforce the company’s commitment to leading the change in consumer eSIM adoption. Setting a precedent for other device manufacturers.
Currently, most of the new smartphones released by Apple, Samsung and Google are eSIM-compatible. There are also other OEMs who seem to have recently gotten onto the eSIM wave such as Huawei.
What’s also worth mentioning is that by 2025, eSIM-compatible smartphones will be more affordable and therefore more accessible. When the first eSIM-compatible iPhone was launched, the device retailed at around $999 — placing it at the higher end of mobile device affordability. Now, just a few years later, the choice is much wider and a new smartphone supporting eSIM costs less than $500.
In our opinion, it’s just a matter of time before other OEMs launch eSIM as a standard in their devices. We also expect a greater shift to eSIM-only models in the next 2-3 years. Especially since the rumours of the iPhone 15 have come to light. This’ll make the majority of smartphone shipments (83%) eSIM-enabled by 2025.
OEMs are doing a much better job in supporting eSIM than operators. The number of eSIM-enabled smartphones is constantly growing and affordability improving. There is, however, one thing OEMs and SPs have in common – low promotion of eSIM functionality, its benefits, and available devices. It heavily reflects on user awareness and adoption rates, and it shows.
In the coming years, we expect the catch-up from operators and OEMs alike to happen very quickly.
Consumer awareness and demand
There are plenty of conversations going on around eSIM awareness among consumers. Many of them suggest that it’s very low, with GSMA stating that only 20% of customers, on average, were aware of eSIM in 2020. However, up until then, only 14% of telcos have launched eSIM offerings worldwide. Based on our research, the promotional activity of those offerings is negligible. Many of those operators do the bare minimum in promoting eSIM. In addition, many operator implementations of eSIM technology are not designed in a way to deliver the true user experience benefits eSIM can offer. It can therefore be deduced that if telcos put more effort into promoting eSIM and educating their users of its benefits, the awareness (and adoption) level will be much higher.
Awareness is the highest among the 25-34 age group, 5G users and owners of other consumer mobile devices such as smartwatches. These groups represent the early addressable market for eSIM. They are tech-savvy and expect digital-first propositions. When they evaluate the experience they have with their network provider, they do not assess it against other telcos. They assess it against all other apps and services they interact with, so the likes of Amazon, Netflix, or Spotify. The high demand for greater digitisation combined with more effort from the telcos’ side to educate their customers on eSIM will lead to much higher awareness rates.
Even though awareness is considered low, customer demand for eSIM is growing. According to a recent eSIM Consumer Pulse 2022 report, 81% of 2,500 surveyed customers across the US, UK and Australia were in favour or open to the concept of eSIM-only smartphones. Additionally, only 15% of consumers don’t want their provider to sell eSIMs, compared to 58% who do.
eSIM profile transactions (i.e., the number of times a mobile operator profile was downloaded to a device) increased by over 300% year-on-year in 2020. GSMA predicts there will be 850 million eSIM smartphone connections globally by 2025, growing to 6.7 billion by 2030.
Another report by Kaleido Intelligence claims that active eSIM connections are expected to grow by 1400% between 2022 and 2027, resulting in more than 4.5 billion connected devices by 2027. Operators who won’t offer eSIM service by then will miss out on a significant part of the market.
Opportunity for operators
Out of OEMs, consumers and operators, the latter seems to be the least enthusiastic when it comes to eSIM. Only 14% of all telcos decided to launch eSIM in 2021, with it coming to 232 operators in 82 countries. In 2022, it increased to 20%, with it coming to 260 operators in 88 countries.
Operators in the US were forced to move quicker with their eSIM service plans, whether they liked it or not. And the new rumours are a clear indicator to the rest of the world that it’s time and nothing is more motivating than being left behind and a clear churn risk. Some players are arguably better prepared than others, but many smaller local operators and MVNOs will face a frantic rush to catch up.
According to a GSMA Intelligence report, by 2025, 98% of operators plan to offer eSIM services, which is around 1,225. Considering the benefit of eSIM for network providers, the number still seems quite low. But the mobile operator race to develop eSIM offerings is expected to accelerate.
However, by the time the majority of operators offer eSIM, most of them will fall under the Late Majority stage of the eSIM technology adoption lifecycle, missing out on the opportunity and the eSIM market share.
At Mobilise, we strongly believe that the real and the best time to act on the eSIM opportunity is now, more than ever before. And it’s something that we specialise in with our eSIM as a Service. Telcos who want to stay ahead of the curve need to lead the way through the current barriers and obstacles. There are quite a few of them starting with low customer awareness and ending with complicated technology-network integrations. The benefits stemming from deploying the consumer eSIM offerings, however, are worth the hassle.
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To capitalise on those and other benefits posed by becoming an Early Adopter of eSIM, we have 3 recommendations for telcos:
- Promote your eSIM offering to increase awareness and capture a dominant market share (and enjoy higher profits than your competitors!)
- Improve your customer experience to match customer demands for digitalised onboarding and in-app experiences.
- Embrace a fully digital eSIM model with in-app provisioning and an eKYC process.
Here at Mobilise, we have launched eSIM as a Service platform that will enable telcos to utilise the power of eSIM technology to deliver fully digital customer journeys and transform customer experiences to better meet their expectations. Not only that, but we also have our eSIM SDK for non-telcos to implement connectivity within their existing apps.
Conclusion
Historically, telcos have tended to be slow to react to change and adopt new technologies. And we’ve seen that more in the last few years. Whilst the first best opportunity to make a change was yesterday, the second best is today. Now’s the time to think digital first and to foremost prioritise the customer experience. It’s time to educate customers. Present eSIM as a frictionless, more sustainable, and easy-to-use service activation option.
With recent reports of the iPhone 15 in Europe being eSIM-only, we’re quickly moving towards a more connected and sustainable future. Customers can only learn and adopt new telecom technologies through the operators. OEMs and the GSMA have done their part to deliver the consumer eSIM technology, so now it is up to the operators to bring it to the wider market.
Need help with your eSIM service plans? Click here to find out more about eSIM as a Service, our eSIM SDK solution or contact us now to book a demo!
