Ericsson has unveiled an embedded SIM (eSIM), which it says will remove physical SIM cards for improved user experience.
Assessing the available market for devices with eSIMS, Ericsson quoted January 2020 research from Ovum, Device sales forecast report: 2019–24, which predicted that, in 2020, 5% of all smartphones will be eSIM, and this is set to increase to 20% by 2024.
It also suggested that eSIM devices will achieve a compound annual growth rate (CAGR) of 60%, thanks to the efficient and automated support for end-to-end on-boarding.
Ericsson said the new eSIM offers remote provisioning of user profiles and device management – key functions that enable CSPs to manage user profiles in a more flexible way.
Ericsson is also confident that, as well as boosting CSPs, the product will benefit device manufacturers, whose products can be designed with end-users and consumers in focus.
The launch is also said to be based on data that reveals consumers are ready to take the next step and pay for eSIM services. Ericsson said the creation of the eSIM began from the consumer perspective and that its research – carried out in five countries and representing about 200 million smartphone users – supports the creation of six eSIM-based use cases.
These are: connected devices, adding other devices to an existing bundle in a few clicks; try and buy new offerings for three to four days before purchase; travel specials, where users tap a local data tariff for surfing but are billed by home operators; connectivity insurance, where the user has no network coverage and needs to make an important call or send a message, and so any mobile network can be used; marketing campaigns, where business and marketplace models are used by other companies for special launches; and flexible business and marketplace models used by event organisers.
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Based on its survey data, Ericsson calculates the estimated potential at 10-15% revenue growth per eSIM smartphone subscriber. Initially, the largest contributor is expected to be connected devices.
“Most communication service providers see eSIM-enabled smartphones as more of a threat than an opportunity,” said Lynnette Luna, principal analyst at communications-focused research firm GlobalData. “But eSIMs may very well be what CSPs need to break the falling ARPU [average revenue per customer] curve, if they implement and market the capability correctly. The eSIM can enable new use cases that can actually strengthen the customer experience.”
Monica Zethzon, head of solution area communication services at Ericsson, said: “When we developed our eSIM manager, we focused on ease of use for the end-customer. If a service provider has both the secure entitlement server and eSIM manager from Ericsson, we can enable a 100% automated provisioning of eSIMs. This offers a highly efficient way to provide flexibility and good customer experience for consumers.”