With usage and device support on the rise, eSIMs have already started to change roaming habits, and they'll have broad implications for telcos' relationships with their customers, as well as IoT connectivity.
For years, removable SIM cards have acted as the only way to authenticate a user's identity, but their dominance is slowly being eroded by the eSIM – a chip embedded (hence the "e") inside a device, which can be activated remotely over the air.
The average user could be forgiven for not knowing eSIMs have been around for nearly a decade, with the GSMA publishing the first specifications in 2016. Operators were initially not enthusiastic in their support for the technology, which holds the potential to make switching carriers easier and to slash roaming rates. In fact, the US Department of Justice investigated operators in the country for blocking it back in 2019.
But fast forward a few years, and eSIMs finally seem to be gaining traction. This is especially the case in the US, where more than half of global eSIM users were located as of June. US telcos got a nudge from Apple – leader in the local smartphone market – when it removed the physical SIM tray from its smartphones starting with the 2022 iPhone 14.
There have been rumors Apple may do the same in Europe and some Asian markets, most recently prior to this year's launch of iPhone 16, but the company has refrained so far. Whether 2025 will be the year it takes the plunge is anyone's guess. Meanwhile, Samsung has yet to launch an eSIM-only model anywhere.
Will eSIMs lure in customers...
Big US operators have now seemingly embraced the technology, offering free test drives of their networks via eSIM, for example. Their European counterparts have yet to announce similar initiatives, but they are embracing the technology as well, focusing on the opportunities it can offer.
Vodafone took a tentative first step in the UK this year by introducing a free trial to visitors at certain summer events. More initiatives could follow.
Meanwhile, there is no doubt that eSIMs targeted specifically at travelers are starting to gain traction – and that trend is set to continue. Juniper Research forecasts that by 2028, the number of travel eSIM users will shoot up from a predicted 40 million this year to over 215 million by 2028, with Western Europe remaining the biggest market.
Many companies have flocked to this space, offering travel-specific eSIM offers. Specialist firms like Holafly and Airalo, as well as players with a broader travel focus including EasyGroup or Revolut – or even those in other industries like the supermarket chain Carrefour – have launched travel eSIM packages. Some operators, such as Orange and Bouygues, have followed suit, while others are partnering with eSIM firms.
...or make travelers fly away?
The trend may continue, with some arguing this flurry of activity may lead to consolidation in the long run. CCS Insight predicts that by 2028, eSIM specialist companies will be swallowed up by better known brands, following a wave of mergers and acquisitions in this space.
BICS, part of Belgian incumbent Proximus' international division, seems to be betting heavily on eSIMs. Early next year, it plans to launch what it calls a SIM applet connecting a customer to the optimal network in any country, relying on multi-IMSI (international mobile subscriber identities) technology.
And the disruption doesn't end there as the trend may end up forcing operators to rethink their approach to roaming. Earlier this year, Michaël Trabbia, the CEO of Orange's wholesale division, told Light Reading that the company needs to make sure customers aren't lured by better deals from elsewhere and act to address what he called "silent roamers" – users who are put off by high prices of roaming.
That may sound like a bad thing for the continent's ever cash-strapped operators, but Trabbia was insistent this will not be bad for revenues as more users will be addressed. And with the number of international travelers expected to keep rising, according to Juniper Research, there may be more money to go around.
Meanwhile, the IoT sector is also poised to grow eSIM adoption. The number of connected devices is on a growth trajectory, with one estimate saying the number of IoT connections made via eSIM will grow by 43% annually.
What's more, yet another successor to the humble SIM, and potentially the eSIM as well, is already emerging. While eSIMs are still separate soldered components, an iSIM is integrated (denoted by the "i") directly into the device's circuits. Some operators are already moving forward with the technology: In September, Vodafone partnered with Kigen to bring iSIM to IoT devices.
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