Embedded SIMs key to unlocking internet of things

GSMA’s eUICC Embedded SIM Specification will help M2M communications and the IoT become mainstream, say analysts

Mobile operators are now beginning to line up behind the GSMA’s embedded Universal Integrated Circuit Card (eUICC) SIM specification, a replacement technology for traditional handset SIM cards that could make life much easier for the developers of machine-to-machine (M2M) or internet of things (IoT) enabled devices.

According to the GSMA, the type of SIM card used in a day-to-day mobile handset presents a number of challenges for insertion and replacement in M2M products, adding costs and creating barriers to sales.

The association believes that embedding a specific, non-removable SIM at the point of manufacture will enable remote provisioning with the subscription profile of the operator providing the connectivity and eliminate the need to replace SIM cards during the product’s useful life. Both of these points will reduce operational and logistical costs for operators, said the GSMA.

Analysts at Beecham Research have just released a report further highlighting the drawbacks of removable SIM cards and the opportunity for embedded SIMs in sectors such as automotive, consumer electronics, smart metering and so on.

Besides enabling remote, over-the-air provisioning for M2M devices that are often hermetically sealed, such as connected cars or smart meters, the report suggested the standard would help operators provide more reliable and secure connectivity to users, reducing the likelihood of damage or theft, both of which present significant risks to removable SIM cards.

The availability of the GSMA embedded SIM specification is a big deal for the connected devices market

Robin Duke-Woolley, Beecham Research

“The availability of the GSMA embedded SIM specification is a big deal for the connected devices market,” said Robin Duke-Woolley, CEO at Beecham Research.

“This is targeted primarily at the manufacturing community to make it easier and more streamlined both to build cellular connectivity into their products and to sell them through many more channels to market. It also considerably opens up the second-hand market in cars and other products for continued use of support services by second and subsequent owners,” he said.

In effect, when a connected car was sold on through a used car dealer, the car’s mobile contract would most likely be associated with the car, not the previous owner, and would change hands as well.

The report suggested that the uplift in the installed base of IoT-enabled devices over the next five years through using embedded SIMs could be as much as 34%, generating $8.9bn of additional revenues, which Beecham said was a “conservative view”.

“This is great for the auto industry and likely to lead to faster growth. We also think it will drive a lot of new sales internationally in the consumer electronics market and lead to more elegant product designs,” said principal analyst Saviero Romeo.

More on the Internet of Things

A number of operators, including AT&T, Telefónica and Vodafone, as well as manufacturers, have now lined up behind the standard and are in the process of launching hardware compliant with the eUICC standard. The GSMA has already published test specifications for embedded SIMs, and introduced a security accreditation scheme.

“Our vision has always been to unite all stakeholders behind a single, common and global specification that will help accelerate the growing M2M market. It has also been our intention for the GSMA Embedded SIM specification to become the de facto industry standard,” said GSMA CTO Alex Sinclair.

“Industry-wide adoption sets us on the path for the long-term growth and development of the industry, and we welcome the news that the M2M community is ready to do business using the specification,” he added.

AT&T was the first operator to launch a global SIM designed to help enterprises wirelessly connect and manage M2M devices, basing it around the eUICC specification.

“We believe a unified solution is in the industry’s best interests and will accelerate the adoption of embedded SIMs,” commented Chris Penrose, AT&T's senior vice-president of emerging devices.

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