The eSIM Effect: A look at the Economic Impact

Marco Bijvelds, VP International Product Management
Jul 25, 2019 11:00:00 AM

In our most recent blog, we discussed frustrating IoT challenges such as inconsistent data delivery, high roaming costs, and the eventual discontinuation of wireless service by your carrier. The culprit is the same in each of these scenarios: legacy IoT devices can only connect to a single carrier and a single technology (i.e. 2G, 3G, etc.). Your business is at the mercy of the carrier’s coverage area, their chosen roaming partners (and their roaming prices), and the carrier’s willingness to keep your service type active. As we previously shared, these challenges can be solved by eSIM.

eSIM will allow you to remotely and instantly switch IoT devices to alternate carriers, solving the problems of spotty connectivity, MIA devices, and outrageous roaming charges. Let’s take a deeper dive into eSIM technology and its capabilities.

A Glimpse into the Future

Here’s one example of how eSIM technology will deliver significant business impact. IoT-enabled smart meters have become common, with approximately 700 million currently installed worldwide according to analysts at IHS Markit. Smart meters enable utility companies to wirelessly collect accurate usage data and bill customers more quickly. For example, a water company or municipality can see consumption data in near-real-time and send invoices promptly. There’s no longer a need for a person to go to every house and “read the meter” – a cumbersome, inefficient, and costly process.

But smart meters have a flaw that will get costly at some point: they usually contain a legacy SIM card, many of which are soldered into place. Any updates to the cellular network will require a physical SIM swap – and there’s no shortage of reasons that would necessitate an update. For example, as technology evolves and new cellular networks emerge, the meter’s cellular network service risks being phased out (sunset). Or, depending on the local regulations, cellular contracts might only be awarded for a limited amount of time – often far shorter than the lifespan of the device they’re connected to. Alternatively, data usage may change because of changing meter reading frequency. As the data consumption changes, their related rate plan would need to be adjusted – potentially leading them to seek a new carrier.

Each of these scenarios will require a technician to visit each home and business, unsolder the old SIM, and install a new SIM. In some cases, the old meter won’t be worth updating, so the whole unit will be replaced by a new meter. The hardware plus the labor costs can add up. Some utility providers have been through this expensive process several times already, falling victim to network sunsets or proactively upgrading to a more effective connectivity option at great expense.

In the future, these costly truck rolls will be eliminated thanks to eSIM technology. Rather than replacing the legacy SIM with a new SIM, each smart meter can be outfitted with an eSIM. In doing so, the utility provider can now change network carriers or service types over-the-air (OTA) without ever sending out a technician. Entire cities will be able to switch all their smart meters to lower-cost providers or more effective bandwidth options at the same time, in an instant, providing significant cost savings. The upfront investment of switching to eSIM might sound time consuming but the initial man-hours making these upgrades are greatly outweighed by the future-proofing benefits. By putting in the effort and switching to eSIM now, you will save yourself from future manual SIM swaps the next time technology changes.

Learning More about eSIM

How can eSIM help your business? In our next blog, we’ll dig deeper into eSIM’s three primary applications and describe how each technology can be applied to specific business cases and challenges. If you want to accelerate your knowledge of eSIM, download our guide titled “eSIM 101: An Introduction to eSIM for IoT.”