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Consumer awareness of eSIM – Analysis and future outlook

16 May 2023 9 min read

Introduction

When eSIM was launched in the consumer market back in 2016, we expected it would revolutionise the telecoms industry. It enables a full digitalisation of the customer journey by eliminating the plastic SIM card and all the hassle it entails. eSIMs save consumers plenty of time and effort, are more secure, and provide greater security. However, despite all these benefits, eSIM awareness is lower than expected. There are several reasons and consequences of the slow awareness growth. We’ll discuss both in this article. Firstly though:

What is eSIM?

eSIM, or embedded SIM, is a digital SIM that is physically integrated into a device. It has the same function as the plastic SIM card but can’t be removed from the device and replaced with another SIM. It’s activated remotely which allows operators to move their entire customer journey online.

 

Consumer expectations of eSIM. 32% - Greater flexibility and speed, the ability to switch providers and plans in an instant. 20% - Less hassle, no need to go out and buy a new physical SIM card or wait for it to arrive. 18% - Cost savings when travelling, no more roaming charges due to the ease and speed of switching to another provider when abroad. 13% - A fully digital experience, no more hassle when removing and inserting physical SIM cards. 11% - Sustainability, no more plastic SIM cards, which is better for the environment. 6% - Enhanced device features, reduced SIM size allows for improved features like larfer batteries, memory hardware & durability.Source: The eSIM Consumer Pulse 2022

 

eSIM awareness among consumers

According to a GSMA Intelligence report, eSIM awareness among consumers was around 20% in 2020. The more recent data suggests that in 2022, awareness was still lower than 30%. The level varies across different regions, generations or smartphone brands owned by consumers. That, however, doesn’t change the fact that the awareness is low and growing at a slow rate.

 

Consumer awareness of eSIM by category. By smartphone brand: Apple 22%, Samsung 19%, Huawei 17% and other 20%. By age: 18-24 24%, 25-34 27%, 35-44 23%, 45-54 18%, 55-64 14%, 65+ 12%. By network generation: 3G 17%, 4G 21%, 5G 29%. By ownership of other mobile devices: smartwatch 41%, wearable fitness tracker 28%, tablet 23%, laptop or desktop PC 19%.Source: GSMA Intelligence

 

Is it the consumers’ fault? Are they not willing to try the new technology? On the contrary. According to a recent eSIM Consumer Pulse 2022 report, 81% of 2,500 surveyed customers across the US, UK and Australia were in favour of or open to the concept of eSIM-only smartphones. Additionally, only 15% of consumers don’t want their provider to sell eSIMs, compared to 58% who do.

If it’s not consumers that are unwilling to adopt eSIMs, then who is?

 

Reasons for low eSIM awareness

There are a few reasons why consumer awareness of eSIM is so low despite how long eSIM has been around. However, the main issue lies on the OEMs’ and SPs’ sides.

As shown in the image below from a GSMA Intelligence report, only 15% of consumers were made aware of eSIM from an OEM, and only 8% of consumers received information from their mobile phone operator.

 

Finding out about eSIM. Among surveyed consumers who have heard of eSIM. 28% say they read an article about eSIM. 16% say a friend/family member/colleague told me about eSIM. 15% were told about eSIM when they bought a new device (e.g. phone, smartwatch, tablet) directly from the manufacturer, which is the push from OEMs. 10% say they saw an advert for eSIM (e.g. on TV, in-store, online, at an airport). 8% say they received some information/promotional materials about eSIM from their mobile phone operator, which is the push from Operators. 8% say they heard about eSIM in another way. 8% say they don't know/can't remember. And 7% say they heard about eSIM through their work.Source: GSMA Intelligence

 

OEMs

eSIM is not yet supported by all devices. While the number of eSIM-capable smartphones, tablets, and other mobile devices is growing, it’s still limited to mainly flagship devices. As mentioned in our previous blog post on the Top 5 Most Affordable eSIM-Compatible Phones in 2023, the number of eSIM-capable smartphone models reached 82 in March 2023. Considering there are hundreds, if not thousands, of various smartphone models, this number is still too low and constitutes a barrier to adoption at scale.

Additionally, OEMs don’t do a very good job of promoting their eSIM-enabled devices. According to Consumer Pulse 2022 report, only 32% believed their devices had eSIM functionality. However, when their phone models were checked, the actual proportion that supported the technology was a whopping 74%.

Both reasons combined contribute to low consumer awareness and adoption.

 

Number of eSIM-capable smartphone models. Samsung (22), Apple (19), Google (16), Oppo (4), Huawei (3), Other (18), Total 82. Other includes: Rakuten (5), Sony (4), Motorola (2), Sharp (2), Honor (1), Fairphone (1), Xiaomi (1), DOOGEE (1), Gemini (1).

 

Number of eSIM-Capable smartphones through the years. 2017: 3. 2018: 8. 2019: 16. 2020: 43. 2021: 52. 2022: 71. 2023: 82.

 

Operators

The situation is very similar on the SPs’ side.

Firstly, only about 20% of SPs worldwide support and offer eSIM to their consumers. Most of these are based in North America, which held over 35% of the consumer eSIM market share, in Europe, and Asia Pacific. In Europe, the countries where eSIM adoption is the highest include the UK, Germany, and France. In Asia Pacific, it’s China, India, Japan, and South Korea.

It also makes it the default option for operators to promote rather than eSIMs. On top of this, eSIMs have often been marketed as a premium service for consumers, hindering mass-market adoption from consumers in lower income brackets.

 

Commercial availability of eSIM service for smartphones by number of countries and number of operators. 2018: 24 countries and 45 operators. 2019: 45 countries and 103 operators. 2020: 69 countries and 175 operators. 2021: 82 countries and 232 operators. 2022: 88 countries and 260 operators.

Secondly, even though 20% of SPs launched their offerings, they are not promoting them effectively to their subscribers. It’s most likely because they are afraid of the freedom of switching providers eSIM offers to their users. But eSIM offers plenty of benefits to SPs that most certainly outweigh the disadvantages:

 

  • Cost saving: eSIM technology streamlines manufacturing and logistics costs by relying on digital channels. And, in turn, less expensive distribution channels.
  • Revenue enhancement: First, it allows SPs to offer enhanced, multi-device and multi-user subscriptions which drive higher ARPU and attract high-spending customers. Second, it provides an opportunity for international roaming and travel product use cases. These increase the inbound roaming revenue by unlocking the silent roamer segment. Lastly, eSIM enables horizontal market opportunities through embedded connectivity products.
  • Improves Net Promoter Score (NPS): Satisfactory digital customer experience in telecom is widely linked with improved loyalty and satisfaction. eSIM allows to fully digitalise customer onboarding and, in turn, the entire customer journey. In a world driven by digital experiences, digitalisation is what customers expect from their service providers.
  • Sustainability: Offering eSIM services can completely dematerialise SIM cards. Helping to reduce the plastic waste and carbon emissions associated with SIM card manufacturing and transportation.
  • Future-proof: Since eSIM will be a commonplace feature in the future, the best way for operators to avoid getting left behind is to ensure that SPs have a suitable eSIM infrastructure in place before it’s too late.

 

Because eSIM is not well promoted and explained to consumers, it makes it difficult for them to understand what it is, how it works and what are its benefits. If more consumers were aware of the technology, more of them would use it, thus driving consumer awareness and adoption.

The telecoms industry as a whole needs to improve and adapt the way we educate consumers on the technology to ensure that it’s easier to understand.

 

Impact of low awareness on eSIM adoption

Low consumer awareness has a massive impact on the adoption of eSIM, including:

  • Reduced adoption of eSIM. If consumers are not aware of eSIM, they are less likely to adopt it. This can slow down the adoption of eSIM technology, which can have a number of negative consequences. For example, it can delay the development of new eSIM-enabled devices and services.
  • Reduced competition in the market. If consumers are not aware of eSIM, they may be less likely to switch SPs. This can reduce competition in the mobile market, which can lead to higher prices and fewer choices for consumers.
  • Consumers may miss out on the benefits of eSIM. eSIM offers a number of benefits to consumers, such as the ability to easily switch carriers and add a second or third line of service to a device. However, if consumers are not aware of these benefits, they may not take advantage of them and are less likely to want to adopt them.
  • SPs may lose customers. If consumers are not aware of eSIM, they may be more likely to switch to a carrier that supports it. This is because eSIM offers a number of benefits that can make it easier for consumers to switch carriers, such as the ability to activate a new service without having to visit a store or call customer service.
  • The mobile industry may not reach its full potential. eSIM has the potential to revolutionise the telecoms industry by making it easier for consumers to switch carriers and add multiple lines of service to their devices. However, if consumer awareness of eSIM remains low, the mobile industry may not reach its full potential.

 

Mobilise can help!

At Mobilise we created our own eSIM as a Service platform. It’s a turnkey solution that enables SPs to offer consumer eSIM capabilities to their customers quickly and efficiently. Offering one-tap installation, eSIM as a Service eliminates the need for QR codes, enabling a truly transformative user experience.

eSIM as a Service comes as a white-labelled eSIM app. Thanks to our strategic partnerships, the platform offers eSIM DP+ infrastructure that is compliant with SAS-SM certification by the GSMA.

With these functions, mobile network operators (MNOs) and mobile virtual network operators (MVNOs) of all sizes can embrace the opportunities created by eSIM technology and form entirely digital journeys for their subscribers.

 

 

The future outlook for eSIM

Potential growth of eSIM technology

Even though the current awareness and adoption of eSIMs are low, the technology has the potential to revolutionise the industry.

The global eSIM market is expected to grow from $7.3 billion in 2021 to $17.5 billion by 2030, at a compound annual growth rate (CAGR) of 10.2%. This growth is being driven by the increasing adoption of IoT devices, the growing demand for smartphones and wearables, and the need for more sustainable connectivity solutions.

Additionally, the adoption rate of eSIM is expected to accelerate in the coming years. According to a GSMA Intelligence report, 98%, which is around 1,225, of operators, plan to offer eSIM service by 2025. That means an almost 371% increase between 2022 and 2025. In comparison, the eSIM adoption rate grew by 152% between 2019 and 2022. This growth will be driven by the increasing availability of eSIM-enabled devices and the growing awareness of the benefits of eSIM technology.

 

Commercial availability of eSIM service for smartphones by number of countries and number of operators. 2018: 24 countries and 45 operators. 2019: 45 countries and 103 operators. 2020: 69 countries and 175 operators. 2021: 82 countries and 232 operators. 2022: 88 countries and 260 operators.

 

Following the launch of the iPhone 14 as eSIM-only in the US, Apple continues to embrace eSIM technology. Recent reports indicate that the iPhone 15 will also be eSIM-only in Europe. This move will further reinforce the company’s commitment to leading the change in consumer eSIM adoption. Setting a precedent for other device manufacturers.

The iPhone 15’s eSIM-only approach will have far-reaching consequences for the telecoms industry. There’s now little doubt about the direction the industry is going when it comes to the physical SIM card. The plastic SIM is on the way out, and operators must continue to adapt and innovate to stay competitive in the evolving market.

 

 

Conclusion

The rise in popularity of consumer eSIM is transforming the telecoms industry, offering multiple advantages to consumers. As with any technology shift, there are potential challenges involved. Overall, consumer awareness is playing a massive role in the adoption of eSIM, and OEMs and SPs need to rethink their strategy to make sure they can remain competitive. With the potential release of an eSIM-only iPhone 15 in Europe, they’ll need to act fast to remain competitive.

For more information on our eSIM as a Service offering, click here. Or click here to contact us and schedule a meeting.

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