Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.
November 18, 2022
Verizon this week became the latest mobile operator to announce it is using eSIM technology to offer customers a free "test drive" of its network.
The company's announcement – significant because Verizon is the biggest mobile provider in the US by number of customers – builds on similar eSIM announcements from T-Mobile, AT&T's Cricket and Verizon's own Visible prepaid brand. The mobile operators' plans also dovetail with Apple's decision to ditch physical SIMs completely in some versions of its new iPhone 14.
Figure 1: (Source: Apple)
Verizon's eSIM "test drive" will allow mobile phone users with unlocked, eSIM-compatible phones to test out the company's network for 30 days. Verizon said the offer provides up to 100GB of 4G/5G data and unlimited talk and text.
And it wasn't the only big mobile provider to make eSIM news this week. For example, MVNO Mint Mobile said it will use eSIM technology and QR codes to offer three months of free service to shoppers at participating Target and Best Buy stores. Separately, AT&T officials told FierceWireless that the company may expand its own eSIM-powered "test drive" following the launch of the offering through its Cricket prepaid brand.
"The eSIM is here to stay!" wrote Counterpoint Research analyst Ankit Malhotra on the company's website. Counterpoint predicts that the global smartphone industry will collectively ship almost 300 million eSIM-capable phones this year.
A long and windy road
The fact that the nation's biggest mobile operator is loudly embracing eSIM is a significant turnaround. Just a few years ago, the US Department of Justice (DoJ) investigated Verizon and others for blocking eSIM in the US.
Specifically, the DoJ said AT&T and Verizon in 2016 voted against new eSIM implementations by the GSMA trade association that would have further relaxed the connection between operators and phones. The telcos lost the vote, according to the agency, but that didn't stop them.
"The North American operators would not accept the outcome," the DoJ wrote. "Instead, the North American operators used their regional GSMA group to start a separate process, which was completely devoid of non-operator participation, to make the rule mandatory in North America only."
As a result of the DoJ's investigation, the GSMA agreed to implement new procedures designed to open the association's standards-setting process to companies beyond network operators. And the DoJ said it would monitor the situation to make sure the industry was "preserving the maximum freedom to respond to consumer demand for innovation."
eSIM to the future
After several years of eSIM fits and starts, the technology now seems inevitable in the US market and globally. For example, a 2021 Juniper Research study predicted that the number of eSIMs installed in connected devices would increase from 1.2 billion in 2021 to 3.4 billion in 2025, representing a growth of 180%.
But what will the technology mean for mobile providers and customers?
According to the Verge, the technology may still need some refinement before regular mobile customers become comfortable with it. "I can't say I love eSIM so far," Allison Johnson wrote of her experiences trying to use eSIM to switch among different US mobile service providers.
As for mobile operators, the GSMA trade group argues that they shouldn't be worried about the rise of eSIM. "Operators see a variety of benefits," the organization wrote in a 2021 report on eSIM.
"Most operators see eSIM as an enabler of new revenue and further digitisation for consumers, according to our operator survey," the GSMA wrote. "The most important benefit is perceived to be the increased adoption of other devices by linking them to a main subscription plan (typically a smartphone plan)."
The group added: "This comes as no surprise, as operators are a key distributor of such devices because of the link with connectivity services. In fact, on average across operators, 25% of all device unit sales to consumers are non-phone devices, including smartwatches, tablets and laptops."
And though the GSMA acknowledged that eSIMs remain relatively rare in gadgets like laptops, it suggested that the technology is worth watching.
"As eSIM opens up new opportunities, product/service innovation and new thinking on how mobile tariffs should be designed in a 5G and eSIM world (e.g. per data allowance or number of devices) will be key," the GSMA noted. "Today, most operators don't apply differences between subscription plans for eSIM and traditional SIMs, but this may change in the future. Some MVNOs are already differentiating their eSIM offerings, especially in the context of international travel."
Editorial Director, 5G & Mobile Strategies, Light Reading
Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.
You May Also Like
Rethinking AIOPs — It's All About the DataMar 12, 2024
SCTE® LiveLearning for Professionals Webinar™ Series: Fiddling with Fixed WirelessMar 21, 2024
SCTE® LiveLearning for Professionals Webinar™ Series: Cable and 5G: The Odd Couple?Apr 18, 2024
SCTE® LiveLearning for Professionals Webinar™ Series: Delivering the DAA DifferenceMay 16, 2024