eSIM to Reshape Mobile Communication

  • ID: 3678322
  • Report
  • Region: Global
  • Smart Insights
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FEATURED COMPANIES

  • Amazon
  • Evolving Systems
  • Giesecke & Devrient
  • Marathon Telecom
  • Oasis Smart SIM
  • SIMgo
  • MORE
The report “eSIM to reshape mobile communication” analyzes in detail the dynamics and the specificities of the innovative eSIM business on consumers devices. eSIM (or eUICC), an alternative form factor to a detachable SIM card is a soldered SIM card, an embedded SIM in the consumer’s device. The smart card is physically integrated into the device - i.e. it cannot be removed from the device and replaced with another SIM.

eSIMs have the same functions as removable SIMs, but promise to streamline the advantages of remote provisioning and subscription management. Changes in the architecture and the value chain will drive the emergence of new players and dynamic business models. Automation of subscription management and the appearance of an intermediary to manage subscriptions among multiple MNOs and end-users - a subscription manager - are likely to develop. Coming from M2M (machine to machine) and IoT (Internet of Things) markets, the eSIM has a huge potential to modernize the telecoms industry and the way connectivity is delivered to consumer devices such as wearable devices, tablets and smartphones.

For smartphones, the report “eSIM to reshape mobile communication,” analyzes three possible adoption scenarios demonstrating that the adoption rate will be differently influenced by the players driving the disruption:

- Scenario 1 - GAFAS drive adoption. GAFAS refer to Google, Apple, Facebook, Amazon, Samsung, but other large and innovation hungry competitors are also potential drivers for eSIM adoption,

- Scenario 2 - Disrupter drive adoption. Disrupters include small and innovative players looking for an opportunity to disrupt the market and win their position among larger players,

- Scenario 3 - MNOs drive adoption. Large MNOs will drive adoption motivated by the need to keep their position in the value chain and direct relationship with end-users.

Integration of eSIMs on smartphones will oblige OEMs to face a period where they will have to adapt their devices to support both eUICC and removable SIM. According to the different scenarios developed in the report “eSIM to reshape mobile communication,” 346 to 864 million handsets with eSIM will be shipped yearly by 2020, and will impact the traditional SIM industry as 1,054 to 3,493 million SIM card units will be missing. The traditional SIM card industry will see at least 16% of its shipments disappear by the end of the decade.
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FEATURED COMPANIES

  • Amazon
  • Evolving Systems
  • Giesecke & Devrient
  • Marathon Telecom
  • Oasis Smart SIM
  • SIMgo
  • MORE
- Executive Summary

- Table of Contents

- Table of Figures

1. The SIM card
1.1. Introduction
1.2. Functions
1.2.1. Authentication and identification of subscribers
1.2.2. Storage
1.2.3. Applications
1.2.4. Locking / Unlocking
1.3. SIM identification components
1.3.1. International Mobile Subscriber Identity
1.3.2. Authentication Key
1.3.3. Location Area Identity
1.3.4. Integrated circuit card identifier
1.3.5. Temporary Mobile Subscriber Identity
1.3.6. Mobile Station International Services Digital Network
1.4. SIM cards form factors
1.5. Advantages
1.5.1. Advantages for MNOs
1.5.2. Advantages for users
1.5.3. Other advantages
1.6. Disadvantages
1.7. SIM architecture
1.8. GSM network architecture
1.9. Example of attacks to SIM security

2. eSIM
2.1. What is an eSIM?
2.2. eUICC Architecture
2.3. Advantages
2.3.1. For MNOs:
2.3.2. For end-users:
2.3.3. For OEMs:
2.4. Challenges
2.5. Drivers
2.6. eUICC in M2M
2.7. Standardization
2.7.1. GSMA
2.7.2. SIMalliance
2.7.3. ETSI

3. Technical changes involved by eUICC
3.1. Remote provisioning
3.2. Subscription management
3.2.1. First subscription installation
3.2.2. Subscription replacement
3.2.3. Change device
3.2.4. Terminate a subscription
3.2.5. Connecting any device on demand at any time, anywhere

4. Value Chain

5. Impacts on the business models of the main stakeholders
5.1. MNOs
5.2. SIM Vendors
5.3. Semiconductor vendors
5.4. Users
5.5. OEMs
5.6. Subscription manager

6. Forecasts
6.1. Wearable devices and tablets
6.2. Smartphones
6.2.1. Scenario 1 – GAFAS drive adoption
6.2.2. Forecast
6.2.3. Scenario 2 – Challengers drive adoption
6.2.4. Forecast
6.2.5. Scenario 3 – Large MNOs drives adoption
6.2.6. Forecast
6.2.7. Summarizing…

7. Other business models
7.1. Soft SIM
7.2. SIM functions in TEEs
7.3. 5G and VoLTE
7.4. Google’s Project Loon

8. Companies and organizations
8.1. Apple
8.2. Amazon
8.3. Bluefish
8.4. Boku
8.5. Evolving Systems
8.6. Facebook
8.7. FIME
8.8. Gemalto
8.9. Giesecke & Devrient
8.10. Google
8.11. Infineon
8.12. Lebara
8.13. Marathon Telecom
8.14. Morpho
8.15. Movirtu
8.16. Mozilla
8.17. Oasis Smart SIM
8.18. Oberthur Technologies
8.19. Samsung
8.20. Silent Circle
8.21. SIMgo
8.22. Simless
8.23. STMicroelectronics
8.24. TransferTo
8.25. Watchdata

9. Glossary
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FEATURED COMPANIES

  • Amazon
  • Evolving Systems
  • Giesecke & Devrient
  • Marathon Telecom
  • Oasis Smart SIM
  • SIMgo
  • MORE
Since its inception, the SIM (Subscriber Identity Module) card provides secure, identifiable and authenticated access to mobile networks. The SIM card has been an important innovation in the telecommunications industry, providing many benefits to consumers in terms of security, portability of contacts, and ease of portability of devices across networks. Thus, SIM cards contributed significantly to the growing success of the mobile communications market.

The telecom industry has done a long road to achieve the security and interoperability levels we experience today. The high levels of standardization and worldwide coverage achieved through a complex network of relationships, which make it possible to use a mobile phone everywhere in the world, made this industry one of the most successful industries of our times.

But as the industry moves from connecting phones to connecting a wide range of devices, stakeholders have pushed the adoption of more flexible solutions. Embedded SIMs, also known as eSIM or eUICC, are an alternative form factor to a detachable SIM card, which provide the same assured levels of security and portability for consumers, as well as provide additional functionality for enabling new services

eSIM is a soldered SIM card, or embedded SIM in the consumer’s device. This is the smart card is physically integrated into the device - i.e. it cannot be removed from the device and replaced with another SIM. While this solution has mainly been adopted in M2M (Machine-to-Machine) and IoT (Internet of Things) devices, the opportunities to increase flexibility in consumer devices are endless.

eSIMs have the same functions as removable SIMs, but promise to streamline the advantages of remote provisioning and subscription management, while ensuring secure user authentication and data handling. For the first time, it will be possible to remotely load and manage subscriptions across devices already deployed in the field, in a fully interoperable way.

eUICCs on consumer devices are also expected to bring more flexibility to the telecom industry business models. Today all contracts are dependent on end-users signing up to a mobile network operator (MNO), and the contact is for a single MNO. However, eSIMs would mean end-users have a lot more freedom - they could change subscriptions as much as they want. The possibility of sharing subscriptions offered by eSIMs might be another game changer for the industry.

Until now, MNOs have failed to bring innovation to the industry. Mostly because they are afraid of losing the privileged relationship they have today with subscribers - MNOs are the owners of SIMs and are, so far, the only ones controlling them. eSIMs bring flexibility and diversification, allowing other stakeholders to establish direct relationships with subscribers.

Changes in the architecture and the value chain will drive the emergence of new players and dynamic business models. Automation of subscription management and the appearance of an intermediary to manage subscriptions among multiple MNOs and end-users - a subscription manager - are likely to develop.

Security challenges are expected to emerge as the value chain and new business models evolve. Until now, MNOs have been the exclusive responsible for security, but a shared approach will be needed for the successful eSIM adoption. Only through standardization will it be possible to achieve the same level of interoperability and security existing today. GSMA is currently working on a specification covering eSIM on consumer devices, which is expected to be released in 2016.

The adoption of eSIMs is expected to be experienced differently across markets, being influenced by the stakeholders driving disruption. Speed of adoption will depend on the adoption of standards and the evolution of the ecosystem. Smart Insights analyzed the adoption of eSIMs on three different categories of consumer devices: wearable devices, tablets and smartphones.

Wearables and tablets, which are seen as complementary devices rather than primary communication devices, have been marginalized when it comes to connectivity due to the need to have independent subscriptions. The additional connectivity represents a major business opportunity for the industry.

For smartphones, three possible adoption scenarios are analyzed, assuming that the rate of adoption will be differently influenced by the players driving disruption:

- Scenario 1 - GAFAS drive adoption. GAFAS refer to Google, Apple, Facebook, Amazon, Samsung, but other large and innovation hungry competitors are also potential drivers for eSIM adoption.

- Scenario 2 - Disrupters drive adoption. Disrupters include small and innovative players looking for an opportunity to disrupt the market and win their position among larger players.

- Scenario 3 - MNOs drive adoption. Large MNOs will drive adoption motivated by the need to keep their principal position in the value chain and directly relationship with end-users.

Integration of eSIMs on smartphones will oblige OEMs to face a period where they will have to adapt their devices to support both eUICC and removable SIM. According to different scenarios developed in the report “eSIM to reshape mobile communication,” 346 to 864 million handsets with eSIM will be shipped yearly by 2020, and will impact the traditional SIM industry as 1,054 to 3,493 million SIM card units will be missing. The traditional SIM card industry will see at least 16% of its shipments disappear by the end of the decade.

Despite initial negative impact on some players’ businesses currently present in the industry, most of them are expected to adapt their business models and continue thriving with more flexible structures, while evolving from a hardware-based positioning to a services industry. New business opportunities brought by the increasing connectivity and interoperability between devices, such as virtualization of solutions or big data analysis, are expected to develop.
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- Apple
- Amazon
- Bluefish
- Boku
- Evolving Systems
- Facebook
- FIME
- Gemalto
- Giesecke & Devrient
- Google
- Infineon
- Lebara
- Marathon Telecom
- Morpho
- Movirtu
- Mozilla
- Oasis Smart SIM
- Oberthur Technologies
- Samsung
- Silent Circle
- SIMgo
- Simless
- STMicroelectronics
- TransferTo
- Watchdata
Note: Product cover images may vary from those shown
6 of 5
Note: Product cover images may vary from those shown
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