Ericsson launches automated eSIM solution: A threat to operators?

News

Ericsson’s new embedded SIM (eSIM) solution will replace physical SIM cards, aiming to improve user experience.

The vendor says its new eSIM offering will also be beneficial for device manufacturers and operators. However, the latter may be wary, seeing a threat rather than an opportunity as eSIMs offer customers the ability to swap providers more easily.

The eSIM solution offers remote provisioning of user-profiles and device management, key functions that Ericsson says will enable communication service providers to manage user profiles in a more flexible way.

“Good user experience of the services requires management of both devices and network elements,” a statement said.

Consumers ‘willing to pay’

The development of the automated ‘eSIM manager’ is based on data from research, carried out in five countries and representing approximately 200 million smartphone users, which found that customers want to use eSIM services and are willing to pay for them.

Based on the survey, Ericsson estimated revenue growth potential at 10-15% per eSIM smartphone subscriber. Initially, the largest contributor is expected to be connected devices.

Lynnette Luna, Principal Analyst at analytics and consulting company GlobalData, commented, “Most communication service providers see eSIM-enabled smartphones as more of a threat than an opportunity. But eSIMs may very well be what CSPs need to break the falling ARPU curve, if they implement and market the capability correctly. eSIM can enable new use cases that can actually strengthen the customer experience."

Use cases

The research highlighted the potential for six eSIM-based use cases:

• connected devices (easily add on other devices to an existing bundle);

• ‘try and buy’ – try out new offerings for three to four days before purchase, for example;

• travel specials as in use a local data tariff for surfing – billed by home operator;

• connectivity insurance – when the user has no network coverage and needs to make an important call or send a message, any mobile network can be used;

• marketing campaigns – flexible business and marketplace model used by other companies for special launches; and

• events meaning flexible business and marketplace models used by event organisers.

Ease of use for consumers

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 the consumers.”

Ovum’s recently published eSIM Device Sales Forecast Report: 2019–24 predicts that in 2020, 5% of all smartphones will be eSIM. This is set to increase to 20% in 2024. Further, eSIM devices are predicted to grow annually by 60% CAGR, driven by efficient and automated support for end-to-end onboarding of these devices.