Emma Okonji writes about the need for telecoms operators to invest in dual SIM devices that are likely to trigger eSIM opportunities in the sector
The Subscriber Identity Module (SIM) cards have been in existence since the inception of the mobile telecoms industry. In Nigeria, SIM cards came with the introduction of Global System for Mobile Communications (GSM) in 2001, which was the beginning of telecoms revolution in Nigeria.
The SIM cards are little chips that come in various sizes like the mini size SIM, micro size SIM and nano size SIM, which are vital means to securely link users and their network providers who are the telecoms operators.
With the arrival of eSIM and the increasing popularity of dual SIM devices that enable users to have multiple subscriptions, telecoms operators are already coming up with rapid transformation strategies that will enable them take advantage of the substantial revenue gains associated with eSIM. Equally, operators who do not invest in the relevant technology are at risk of being unable to compete with operators who have made significant investment.
A report released by Mobile World Live and SIM Local, outlines the limitations of traditional SIMs, the huge revenue opportunities around eSIM and how dual SIM demand is driving the change and the advantages for operators who embrace eSIM. The report reveals the eSIM revenue opportunities and what those who don’t adopt eSIMs will miss out on.
Challenges with SIM cards
Since the early 1990s, the global SIM card has been an essential security component of devices connecting to mobile networks. SIM cards not only identify the customer for billing purposes but act as a secure authentication token enabling the device to connect to a particular operator’s mobile network.
According to the Mobile World Live and SIM Local report, SIM card has played that role well but the global mobile market has changed immensely since its introduction and this has highlighted many problems and limitations, with the result that the traditional SIM card is, unfortunately, no longer fit for the purpose. The report highlighted key disadvantages to include: connecting a device onto a mobile network requires the consumer to go to a retail outlet to or wait for a SIM card to arrive in the post; swapping from one device to another may require a different sized SIM card, and also an arduous ‘SIM swap’ process; for some people the Nano SIM and even the Micro SIM are just too small to be managed; SIM cards, when not inside mobile devices, are extremely easy to lose; the SIM card tray presents a major problem for device waterproofing; the SIM card tray inside a smartphone is the same size as the main processor, yet its function is far less.
The mini SIM card, which comes in 15mm size, was introduced globally as far back as 1996. The micro SIM, which comes in 12mm size, was introduced in 2003, and the Nano SIM, which comes in 8.8mm size, was introduced in 2012.
The advent of eSIM
In 2016, the GSMA released a technical specification for eSIM, removing the need for a physical SIM card in consumer devices. This specification has been implemented by many manufacturers including Apple, Samsung, Huawei and Microsoft and used across more than 100 operators worldwide.
eSIM brings many benefits to operators and other stakeholders from across the entire market. For consumers, eSIM enables faster and easier connection of devices onto mobile networks and easy addition or change of mobile operators over time. This paves the way for enabling new appealing mobile device categories such as watches and other wearables.
For operators, eSIM means less costly logistics when compared to traditional SIM cards. In addition, there is an improved customer journey and new customer acquisition and retention capabilities. For example, poster campaigns with QR codes can be used to acquire new customers while for retention, users can tap their smartphone onto new devices to add them to their existing account. There is also less impact on the environment given a huge reduction of plastic SIM cards over time.
The report explained that for device makers, eSIM allows for smaller form factor devices. Even in larger devices, more internal space is freed up for other capabilities. Importantly, device makers can be assured that devices such as tablets will be connected on the move, enabling customers with the full feature set of the device and therefore greater satisfaction. Cost is also attractive since eSIM enables a reduced bill of materials (BOM) as the SIM tray and related circuitry are no longer required. The lack of a SIM tray also means devices are more easily waterproofed.
The report further said it might seem counter intuitive but that SIM card vendors will also benefit because eSIM provides new products and service channels for them to exploit, which include embedded universal integrated circuit cards (eUICC), subscriber manager data preparation platforms (SMDP+) and eSIM profiles. For these, eSIM creates additional customers in the form of mobile device manufacturers.
“Because most mainstream mobile devices such as smartphones can only accommodate a single SIM card, a customer will tend to have a long-term relationship with just one operator whilst owning the device. Even if the customer changes mobile service provider, the SIM card is replaced and a new long-term relationship between customer, device and operator begins,” the report further said.
Nigeria’s experience with eSIMVoice
Taking advantage of the current global trend about eSIM, Smile Communications has introduced an innovative Voice and SMS Only product, dubbed eSIMVoice, which is believed would enhance the future of seamless access and mobile connectivity.
Smile disclosed that the eSIMVoice would come as a free downloadable application, and when activated the consumer can enjoy 10 minutes free local calls, unlimited on-net calls and Short Messaging Services (SMSs). The customers can also savour zero roaming charges, free on-net audio and video calls and the lowest call rates to any network.
The company advised customers and prospects eager to enjoy its latest innovation, to simply walk into any Smile shop, kiosk or contact an authorised dealer. The service comes with varying voice plan options that will suit every need.
To enable as many customers as possible to take advantage of the offer, Smile has simplified the process towards adopting and enjoying the new product. To activate the offer, the customer needs to buy a Smile eSIM, complete the mandatory know-your-customer (KYC) and get their assigned SmileVoice number. Thereafter, the customer will download the SmileVoice app from Google play or App store, click “get activation code”, enter their registered email address to get their activation code and follow other instructions. To make a call, the customer can simply launch their SmileVoice App, dial the number they wish to call and enjoy SuperClear voice calls.
Dual SIM as new revenue strings for eSIM
Highlighting the importance of dual SIM device as an easy means of generating huge revenue for eSIM service providers, the Mobile World Live and SIM Local report explained that having two SIM card slots, could support two mobile network connections at once. The costs of these devices have reduced in recent years with the introduction of Dual SIM / Dual Standby (DSDS) radios. Rather than having two radios in the device, a single radio is able to listen to two networks simultaneously, rapidly switching between each.
The report said a key driver for eSIM over the next few years would be dual SIM devices. The report explained that although dual SIM technology has been available for many years, it has never become mainstream in the USA and Europe where coverage is good and roaming frictionless. Instead it has only been popular in countries like India and Nigeria, where conditions required customers to maintain two or more subscriptions in their device to ensure adequate connectivity. Furthermore, popular devices, such as iPhones, have not offered dual SIM capability until the advent of eSIM.
This is borne out by research firm IDC’s second quarter (Q2) 2018 Mobile Phone tracker which reported that in the United States (US), just four per cent of smartphones sold had dual SIM capability. This contrasts with markets such as India and The Philippines in which the IDC tracker reported that 98 per cent and 92 per cent of phones shipped were dual SIM smartphones.
Device manufacturers looking to support eSIM in their products still need to retain a physical SIM card slot for those countries not ready for eSIM yet.
The report said with the advent of eSIM, Dual SIM has quickly become a mass market feature of smartphones globally. “And as customers experience the many benefits of Dual SIM technology, this will drive further adoption of eSIM in devices, creating a virtuous circle.
“What is key here is that Dual SIM instils new behaviour in the mind of the customer – essentially the notion of a primary subscription, which is generally permanent, and one or more secondary subscriptions that can be easily changed by the customer depending on time and location,” the report stated, adding that Dual SIM devices therefore present an immediate challenge for operators who, up till the arrival of eSIM, saw themselves as the only subscription on the device. With eSIM, customers can have relationships with several operators concurrently.
Dual SIM use cases
International travellers can avoid expensive roaming charges by purchasing and using a local SIM card in each country they visit. Although eSIM simplifies this as there’s no need to physically swap SIM cards anymore, it is not possible to make and receive calls on your primary mobile number when another subscription is being used.
Dual SIM devices solve this as the primary subscription and travel subscription are active at the same time, meaning cost effective data whilst still remaining in contact on the primary number. Again, many customers carry two phones with them, used for separate purposes, but the Dual SIM technology allows all of this on just one phone.
A dual SIM phone provides the customer with far greater coverage than any single operator can provide, and also protects against operator service outage, which happens from time to time.