SIM Cards Are Dead, Long Live The eSIM!

Over the past thirty years, cell phone technology has changed dramatically, evolving from hardware designed primarily for voice and SMS to hardware that we use to manage our lives and access an expanding universe of online content. The technology used in phones has changed a lot. However, there's one mainstay in devices over the past 30 years: the SIM card.

First invented in 1991, there are now billions of Subscriber Identity Module (SIM) cards in circulation today. In fact, there are more of them in circulation than people on the planet. SIM cards have always had the same purpose — to confirm a user's identity to a mobile carrier and allow them to use voice and SMS messaging services. The technology has got smaller and improved in functionality, now able to encrypt voice and data services and transport contacts between devices.

However, SIM cards are beginning to feel a little dated. They're awkward to install and a pain to change over every time you get a new phone, change provider or want to roam abroad with a local carrier. Add to that the fact that most SIMs are made of plastic, so not great news for the environment and carbon footprint goals carriers are setting themselves.

Now it looks like the days of the traditional SIM card could be coming to an end. Embedded SIMs (eSIMs) are emerging as an alternative to current SIM cards and already growing in popularity across the globe.

What Is an eSIM and Where Are They Being Used?

Instead of a plastic card inside your phone, an eSIM is a small chip that sits inside your device. The hardware cannot be removed. However, the data stored within an eSIM is designed to be programmable. It means that you can digitally activate yourself onto a provider's network in a matter of minutes, without having to wait to receive a physical SIM card or visit a store in person. It also means that you can have multiple numbers on your phone on the same eSIM, from different operators, for different purposes. For example, one for personal use, one for travel abroad and one for business.

Many of the latest models from the world's biggest phone makers now support eSIMs, including Apple's iPhone 12 range, Samsung's S20, S21 and S22 and Google's Pixel 3. For many of these brands, eSIM is currently offered in addition to traditional SIM functionality and has not replaced legacy technology. The reason for this is that some operators still don't support eSIMs, so despite the will of consumers and businesses to use this technology, it may not work.

In the US, Verizon, AT&T, T-Mobile and DISH all enable eSIM, with activation typically made possible via QR codes or applications. In Europe, eSIM is available in over 40 countries, with providers such as Orange and Vodafone. In 2021, Juniper Research reported that there were approximately 1.2 billion eSIM devices in circulation, and that number is only likely to have increased over the past year.

What Are the Immediate Benefits?

The immediate benefits of eSIMs for consumers include the ease of switching providers without having to visit a store or wait for a new SIM in the post, coupled with the cost savings from not having multiple devices for different purposes — i.e., one for work and one for personal usage. In some cases, this could even translate into saving for businesses not needing to invest in multiple phones for employees.

Consumers that go abroad a lot may find it cheaper and easier to use a local eSIM and benefit from local rates. It will also provide businesses with this same level of flexibility for employees that have to travel abroad.

eSIM technology also offers potentially higher security. With traditional SIMs, if a thief steals a phone, they can easily insert and new SIM and move the phone onto a new network. It is not so easy to do this with an eSIM when online authentication of the user profile is required. On top of this, this month, the GSMA, which represents the global communications industry, announced its eUICC Security Assurance scheme (eSA), which looks to ensure that new eSIM products are resilient against a range of high-level attack threats. This will only help to improve security levels for eSIM technology.

What Are the Long-Term Benefits of eSIM?

There are also several long-term benefits of eSIMs. Because eSIMs make it easier for customers to change providers, it provides healthy competition for providers to improve network performance and customer service. As the technology becomes more widely adopted, we will see general service levels improve across the telecom industry.

eSIM technology saves space in devices, which can then be used to make them smaller, or improve the battery power or other features such as the camera — handy for all those influencers out there. The functionality of smartphones should improve as manufacturers find new ways to use the space previously occupied by SIM cards. Reducing plastic and e-waste is also a huge benefit of eSIM, and as more and more SIM cards are removed from circulation alongside those secondary work devices many of us have, it will help with carbon neutrality aims.

eSIM technology also means that cellular connectivity can be more easily embedded into different devices, from smart meters to machines and connected devices within the home. It will help accelerate the development of IoT devices and their use cases across a range of different industries. Additionally, for companies that have connected devices that need to travel across borders — think connected devices on ships as one example — eSIMs can make it much easier for these devices to roam across borders, without having to change SIM cards.

With 3.2 billion eSIM devices expected to be in circulation by 2025, the momentum behind this technology is unstoppable. Some carriers will be reluctant to support the technology as it could increase churn, but they can't afford not to, with the majority of new handsets now supporting it and demand for it among consumers and businesses on the rise. So, if you haven't checked if your devices and carrier can support eSIM, now's the time to do it!

(Luc Vidal-Madjar is the head of IoT and eSIM solutions at BICS.)