eSIM – the next big thing for the Internet

Being always connected should be an option, not a struggle. The plastic chip we call SIM has been essential for mobile phone adoption by the majority of human population. But because it grew on top of national telecoms it inherited many issues that date back to Graham Bell – the inventor of cable telephone. Fortunately, we now have an eSIM that addresses the need for international mobility of digital nomads.

GSM from 2G to 5G – speed, reliability and scale

The first generation of cell phones were like regular landline phones but without the cable. So, their primary function was to transfer voice. The idea of enabling Internet access over the GSM network started with the second generation. And then with mainstream adoption and rising demand for data heavy use the following generations were improving speed, reliability and scale of the global cellular network.

But one thing remained the same over decades – you need to have a physical SIM card. That’s because a telecom operator needs to check if paid your bill. It’s the key function of each Subscriber Identity Module. Regardless of the payment form (prepaid, monthly plan, etc.) SIM allows the operator in each country to keep the GSM network accessible for paying customers.

Buying a new SIM card in every destination – the digital nomad perspective

Technically, phones can connect to any BTS (base transceiver station) on the planet. Still the price for data use, calls, SMS and other services always depends on the SIM that’s inside the phone. Specifically to the operator that can be generous for nationwide usage and restrictive for any international use.

Therefore, most digital nomads staying long-term in one place opt in to get a local SIM card. Because it’s a high-demand product, there are always SIM card stands on airports, kiosks and convenient stores. But regardless of the country there are common issues:

  • mobile plan and usage rules can be complicated and not translated into other languages,
  • getting a card usually requires scanning a passport and providing an address, which implies possible privacy data problems (including SIM swap),
  • shabby points of sales can overcharge for SIM or sell counterfeit cards,
  • topping up the prepaid plan sometimes require countless steps (e.g. visiting a shop, paying only in cash, typing code, etc.),
  • dozens of SIM cards means – unused quotas, high costs of production and distribution, environmental impact.

What is an eSIM?

Welcome to the new era of embedded SIM (eSIM) – a programmable hardware module smaller than nano SIM that’s already implemented in smartphones since 2017. It serves the same purpose as the regular SIM to any telecom operator. Yet, the whole process of buying a plan, registering your details (KYC), installing SIM, renewing the plan is done directly on the device. This digitalization of previously long and troublesome manual process greatly improves convenience for all digital nomads.

The current state of mobile network operators and international roaming

Most mobile network operators evolved from national landline telecom companies. With the growth of the global market – there are plenty of consolidations (French Orange acquiring other operators), and development of MVNOs – the virtual operators. Due to increased international mobility of smartphone owners, there are plenty of end-user facing improvements:

  • all citizens of EU member countries can use their phones with increasing allowance regardless of where they are in the EU; some regions are creating similar programs e.g. South-East Asia,
  • in most cases, receiving SMS is always free regardless of where you are and which operator you use,
  • technologies like VoIP and Wi-Fi Calling are decreasing costs of international calls by leveraging Internet connection.

The new competition between eSIM mobile network operators

All of the above has been the result in the decade of mass smartphone adoption. Roughly between the release of the first iPhone in 2007 and iPhone XS/XR with eSIM in 2018. Not less important is the market of Android phones and other mobile devices (tablets, smartwatches, etc.) that are building the demand for fast, reliable and affordable mobile plans.

That’s why I’m very curious about the innovation that is happening due to competition in a whole new sector of eSIM operators. On one hand, we have the traditional national telecoms promoting long-term contracts with one or many eSIMs (with splitting data plan between mobile devices or family members). Then there are telco sub-brands that create SaaS-style subscriptions and aim for younger digital-native demographic – like Orange Flex in Poland. Lastly there are traveler-oriented comparison websites and user-friendly apps like Airalo and Flexiroam that offer data plans for almost all countries in the world.

The new possibilities of eSIM mobile (virtual) network operators

Honestly, I think this is just the tip of the iceberg. The digitalization of the plastic SIM card can unlock entirely new use-cases. Here are some of my ideas for the possible eSIM-driven innovations.

Laptops with built-in eSIM

Like many trends before, there are already some Windows laptops with eSIM, but it seems that the market is waiting for the first eSIM Apple MacBook. Regardless when Apple decides to do it, such implementation seems obvious as USB modems and even laptops with built-in SIM card slot have been on the market for many years. Not to mention tablets (with detachable keyboards, trackpads and mouses) are already utilizing eSIM.

Special plans for events

I can imagine a big event like Gamescom in Europe or Coachella in the USA being sponsored by T-Mobile where every participant is getting eSIM QR code with limitless internet use for the duration of the event. A similar marketing campaign has been already organized by the Polish operator Play during music festivals in Poland. The usual obstacle was with all the hassle around physical SIM card and phone number transfer between operators.

eSIM can be easily distributed even before the event and user doesn’t need to transfer their number as many eSIM smartphones can utilize Dual-SIM. Playing with the free internet access during the event, while using their current number to stay in touch with friends. After the event T-Mobile could easily attract some of these user to their network.

Travel activities – outdoor activity organizers, tour operators, hotels

eSIM plans could be a great bonus for any vacationers, travelers and of course digital nomads. Some companies already offer a SIM card on arrival to their guests. The next obvious step is to offer eSIM on arrival. Such dedicated plan can be customized to fit the travel activity.

Specific regions – continents, cities, mountain ranges, coasts, lakes, etc.

Related to travel activities can be eSIM plans for regions that are being promoted by national tourism boards. I’m confident that it can be a useful benefit for anyone considering visiting a new hip destination.

Single places – cafe chains, coworkings, colivings

While a small physical space like a cafe can offer a reliable Wi-Fi signal, I think there’s room for loyalty plans of frequent clients of specific cafe chains, coworking networks or even colivings. If one already have a membership, a bonus of a special eSIM plan that works around the franchising locations can be a nice add-on.

Companies – employees, families, associations, clubs

The same goes for any groups that can strike a good deal with the mobile operator. If installing a new eSIM is as easy as installing an app, groups could have their own customized mobile eSIM plan.

Special cases – only messaging, only one app, only calls

Lastly there could be a further process of specialization. For example, eSIM run by a messaging app that offers unlimited texting globally under a flat fee. Or a VoIP provider utilizing eSIM and offering unlimited international calls. Such niches are never-ending.

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