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eSIM report

Global Trends
5 Mins.

As the eSIM market continues to grow, a recent report found customers are woefully unaware of the technology’s existence. Interestingly, it also discovered a correlation between how operators act and the likelihood of eSIM adoption

Does a technology exist if nobody knows about it? This is the not-so-philosophical question eSIM operators are likely currently grappling with. That is, if they have read the most recent eSIM report.1

The report, conducted in collaboration by GSMA and G+D, surveyed 17 major markets, coming to two significant findings. Firstly, that the pace of the eSIM technology rollout is accelerating. And, secondly, that 80% of customers are still unaware that the technology exists – and what it does – which could hold back the development of the eSIM market. Importantly for operators, however, the report also noted that investment in promotional activity had an impact on eSIM awareness and adoption. The field of opportunity is set.

The state of the market

Things are moving fast. All major wireless device manufacturers already have eSIM products on the market. While initial offers catered to high-end customers, who purchased top-of-the-range mobile devices and smartphones, the technology is increasingly being embedded in products aimed at a wider range of users. By the end of 2020, eSIM technology was already available in 110 models of smartphones, laptops, smartwatches, and tablets – and this number is set to rise rapidly as the market continues to grow.

Likewise, network connectivity for devices with embedded SIMs is also increasing. Most carriers in developed countries have prepared their networks for eSIM, and it won’t be long before the remaining carriers catch up. While some regional variations, such as China and South Korea, have been relatively slow to roll out eSIM mobile services for smartphones, this is expected to change. Service availability and connectivity offerings for eSIM devices in these countries is likely to converge with markets that have already started the transition, once they begin adopting eSIM technology.

At the end of 2020, at least 175 mobile carriers had launched commercial eSIM services for smartphones across 69 countries – and more are planned for the years to come. In fact, the most recent eSIM forecast for the number of connected eSIM devices states that almost 2.5 billion will be active worldwide by 2025. A significant global market share of 33% across all used devices, by any standard.2

A field of opportunity

Naturally, the switch to embedded SIM technology has been largely encouraged by the benefits it carries for all parties – customers, manufacturers, and operators. For example:

  1. An improved customer experience over traditional SIMs. Not only is the eSIM onboarding process quick and smooth, but managing connected devices can be fully digitalized.
  2. A simplified, digitalized supply chain, which leads to a streamlined onboarding process, reducing overheads and driving cost benefits.
  3. More room, as embedded SIMs save space on devices – a factor rendered particularly important in light of the physical requirements of 5G.
  4. The anticipation of higher revenues, arising from the increasing digitalization of customers’ lives.
  5. eSIMs are eco-friendly and save CO2. By replacing removable SIM cards with an embedded SIM chip in the device, no plastic card is required, which saves a lot of material, reduces waste, and minimizes logistics issues.

Given the substantial benefits for everyone with a stake in the global eSIM market, it would not be unreasonable to expect a strong push to promote adoption. However, that has not been the case.

Focus on a smart watch displaying eSIM held by a woman in front of a computer.

A lack of consumer awareness

The market is growing, the benefits are substantial, yet one of the most notable discoveries within the eSIM report was that consumers are severely underinformed about – and unaware – of the technology. On average, only 20% of consumers in major markets knew about eSIM. In some markets the figures were even lower. For example, in Canada only 12% of consumers were aware of eSIM technology, despite the fact that the country was one of its early adopters. The figures are particularly striking when compared with awareness of 5G, which was found to run at 85%. So, why the disparity?

“The fact that 80% of consumers are still unaware of eSIM technology poses real risks to wide-scale adoption“
Søren Haubold
Strategic Marketing G+D Mobile Security

It comes down to communication. The report identified a significant communication gap, which eSIM operators must address if they wish to maximize the awareness and, consequently, the uptake of the novel technology. Most notably, the findings discovered a link between operators’ efforts to promote eSIM and eSIM activations. This was in part due to manufacturers and operators serving as an important touchpoint for consumers, when information about mobile technologies is concerned.

As a result, the finding came with a warning. If left unresolved, the current lack of promotional activity risks holding back market growth and slowing the realization of benefits for consumers, manufacturers, and mobile operators. 

Driving high eSIM uptake

The outline of a solution to this problem is very clear. A concerted push is required to educate consumers and create the right environment for a high uptake of eSIM technology. In real terms, it means operators need to develop rollout strategies for consumers, covering a number of different elements.

Importantly, providers will need effective communications and marketing plans that help consumers understand the main features and benefits of eSIMs. The aim should be to provide a cohesive basis necessary for consistent messaging and, therefore, enable coherent communication.

However, this is only a part of the story. In addition, consumers will also need access to data plans that make it attractive to switch from their existing wireless plans to those that are more customized. The right plans are an important part of the answer to the question, “Why change?”

“It is not a question of changing between operators but more about offering multi-device and multi-user packages under one operator contract“
Søren Haubold
Strategic Marketing G+D Mobile Security

Once consumers have made the decision to start or switch an operator relationship, savvy carriers will capitalize on simple activation processes to ensure a great customer experience. For example, by applying three optimal onboarding points, as described here, you ensure a smooth onboarding process, which is likely to increase the all-important word-of-mouth effect.

Finally, customer-facing staff need to be properly trained to enable effective consumer education, sales, and onboarding. The professionalism and competence of customer-facing staff will play a key role in helping the public understand and adopt eSIM technology.

There is much to do and a pressing need to act fast, given the speed of anticipated changes in the mobile market. However, the good news is that the industry has the skills and capacity to rise to the challenge, if it puts its mind – and communication strategy – to it.

  1. eSIM: State of the consumer market and the road ahead, GSMA, March 2021

  2. eSIM: State of the consumer market and the road ahead, GSMA, March 2021

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