In few years, E-SIM Would create problem to Telecom Market?

In few years, E-SIM Would create problem to Indian Operators ( They have to share his revenue with each others?)

Traditional removable SIM cards are being replaced by dynamic embedded ones. What might this disruption mean for the industry?

Wearable gadgets, smart appliances, and a variety of data-sensor applications are often referred to collectively as the Internet of Things (IoT). Many of these devices are getting smaller with each technological iteration but will still need to perform a multitude of functions with sufficient processing capacity. They will also need to have built-in, stand-alone cellular connectivity. E-SIM technology makes this possible in the form of reprogrammable SIMs embedded in the devices. On the consumer side, e-SIMs give device owners the ability to compare networks and select service at will—directly from the device.

From industry resistance to acceptance

In 2011, Apple was granted a US patent to create a mobile-virtual-network-operator (MVNO) platform that would allow wireless networks to place bids for the right to provide their network services to Apple, which would then pass those offers on to iPhone customers.1Three years later, in 2014, Apple released its own SIM card—the Apple SIM. Installed in iPad Air 2 and iPad Mini 3 tablets in the United Kingdom and the United States, the Apple SIM allowed customers to select a network operator dynamically, directly from the device.

This technology gave users more freedom with regard to network selection. It also changed the competitive landscape for operators. Industry players were somewhat resistant to such a high level of change, and the pushback may have been attributable to the fact that operators so heavily relied on the structure of distribution channels and contractual hardware subsidies. In fundamentally changing the way consumers use SIM cards, Apple’s new technology was sure to disrupt the model at the time.

As a technology, e-SIM’s functionality is similar to that of Apple’s MVNO and SIM, since it also presents users with all available operator profiles. Unlike Apple’s technology, however, e-SIM enables dynamic over-the-air provisioning once a network is selected. Today, the industry is reacting much more favorably. One driver of the shift in sentiment is the recent focus on the push by the GSMA to align all ecosystem participants on a standardized reference architecture in order to introduce e-SIMs. What’s more, machine-to-machine (M2M) applications have used this architecture for built-in SIM cards for several years now with great success.

Consumer devices will require a more dynamic pull mode to request electronic profiles than the passive push mode of M2M technology. This requirement translates into a big incentive for device manufacturers and over-the-top players to support the industry-wide adoption of e-SIM standards. Finally, it is becoming increasingly clear that future consumer wearables, watches, and gadgets should ideally be equipped with stand-alone mobile-network connectivity. Together, these developments have contributed to strong industry support from mobile operators for the GSMA’s Remote SIM Provisioning initiative.

As a result of both the strong growth in the number of M2M and IoT devices and the development of consumer e-SIM specifications by the GSMA, the distribution of e-SIMs is expected to outgrow that of traditional SIM cards over the next several years by a large margin 

Stakeholder advantages in an e-SIM environment

Adoption of e-SIM as the standard across consumer devices brings several advantages for most stakeholders in the industry: IoT-enabled product manufacturers (for example, connected-car or wearables manufacturers) would have the ability to build devices with “blank” SIMs that could be activated in the destination country. This functionality would make for easy equipment connectivity and allow manufacturers to offer new products in new market segments.

By adopting e-SIM technology, mobile network operators can benefit from the opportunity to take a leading role in the IoT market. They would also have the ability to provide convergent offers with multiple devices (for instance, the smart car and smart watch) under a single contract with the consumer more conveniently than they would using physical SIM cards.

Consumers benefit from the network-selection option that embedded connectivity technology provides. The ability to change providers easily means that e-SIM customers don’t have to carry multiple SIMs, have full tariff transparency, and can more easily avoid roaming charges.

Mobile-device manufacturers may be able to take control of the relationship with the customer because e-SIM, at least technically, allows for disintermediation of network operators from the end-to-end relationship. E-SIM also frees up valuable device “real estate,” which gives manufacturers an opportunity to develop even more features using the space once occupied by traditional SIM cards.

SIM vendors don’t lose in the e-SIM scenario either. Their competency in security and profile creation positions them to be valuable players in the new ecosystem. Key architecture activities, such as managing the e-SIM-generation service, are among the roles that SIM vendors are uniquely qualified to take on.

E-SIM’s potential impact on channels and operating models

Most network operators have already started initiatives to explore not only the impact of the architectural requirements on the organization—including changes to existing IT systems and processes—but also the potential effect on channels, marketing, and proposition building.

Marketing and sales. Targeting new clients through promotional activities may be as easy as having them sign up by scanning the bar code of a print advertisement and activating the service immediately—without ever meeting a shop assistant or getting a new SIM card. By conveniently adding secondary devices such as e-SIM-enabled wearables and other IoT gadgets to a consumer’s main data plan, operators might improve take-up rates for those services. On the other hand, the ease of use and ease of operator switching has the potential to weaken the network operator’s position in the mobile value chain, as customers may demand more freedom from contractual lock-ins, as well as more dynamic contractual propositions.

Customer touchpoints. The entire customer journey and in-store experience may also be affected. For example, e-SIM eliminates the need for customers to go to a store and acquire a SIM card when signing up for service. Since face-to-face, in-store interactions are opportunities to influence customer decisions, operators will need to assess the potential impact of losing this customer touchpoint and consider new ways to attract customers to their sales outlets.

Logistics. Many services will need to be redesigned, and customer-service and logistics processes will be widely affected. For example, secure communication processes for profile-PIN delivery will be required.

Churn and loyalty. The customer may be able to switch operators and offers (the prepaid client base, at least) more easily, and short-term promotions may trigger network switching. This means that churn between operators in a strong prepaid ecosystem will likely increase. But this does not necessarily mean that a customer who isn’t locked into a contract will churn networks more often or spend less. Consumers may still prioritize a deal that offers a superior user experience and acceptable call quality. Satisfied clients will likely stay with their operator as long as locked-in customers do.

Prepaid versus contract markets. E-SIM’s impact may be greater in markets with more prepaid customers than in markets with a high share of subsidized devices. While device-subsidy levels will remain an important driver of customer loyalty in developed markets, investment in device subsidization is expected to fall dramatically over the next couple of years—from approximately 20 percent of all devices sold to less than 8 percent in 2020