eSIM is booming but are operators adopting it fast enough?

The TCA yesterday announced the results of its latest study which found that eSIM shipments soared during 2020. Shipments grew in number by 83% last year, reaching 309 million units, facilitated at least in part by a rapidly increasing number of devices that support the technology. These new devices not only include smartphones, but also IoT devices and smartwatches, both of which are rapidly growing industries in their own right.

 

The TCA also noted the impact of regulatory changes in supporting eSIM industry growth, such as the European eCall initiative driving eSIM deployment in automotive use-cases.

 

The results show that it is not only the availability of the new technology that is increasing, but the uptake of eSIM functionality itself. eSIM profile transactions, where a mobile operators profile is downloaded to a device, increased by over 300% in 2020.

 

“The latest TCA market data reflects the ability of eSIM technology to deliver the flexible connectivity and dynamic security needed to meet the demands of our connected society, both now and in the future,” said Claus Dietze, Chair of the TCA Board. 

 

“With the number of eSIM-enabled consumer, IoT and M2M devices continuing to rise, along with increasing uptake of eSIM functionality, the foundations are laid for significant and sustained growth. And continued expansion of the supporting infrastructure means we can also anticipate new business opportunities for industry stakeholders through the delivery of eSIM personalisation, lifecycle management and security services.” 

 

Research published in January by Truphone concurred with this estimated growth, showing that 87% of mobile operators and device manufactures plan to implement eSIM by 2025. According to the report, almost half (48%) of manufacturers and two thirds (66%) of operators already offer eSIM services, with 75% of these companies having added these services in the past two years. 

 

However, Trumphone’s research also showed that many operators still expect to rely heavily on traditional SIM over the coming years; less than a third reported that they believed eSIM would account for more than 40% of their total connections in 2025. This could indicate an upcoming clash of supply and demand, with manufactures pushing for eSIM adoption while operators remain sluggish. Truphone’s CEO Ralph Steffen’s described this as “the inflection point for eSIM”. 

 

Interestingly, the TCA’s study found that the growth eSIM use and availability does not necessarily indicate a dip in demand for traditional SIMs. Despite a year where much of the world was trapped at home and in which smartphone sales declined, the TCA estimates that global SIM shipments remained comparatively resilient and stable at 4.8 billion units.