Mobile Operators Threatened by eSims?

Embedded Sims (eSims) is currently increasing with customers moving away from regular sim cards.

According to Independent mobile network analytics providers Opensignal, users who use eSim-capable devices are more likely to switch networks. Brazil, Indonesia, Singapore, South Korea, Taiwan, the UK and the US – revealed marked increases in operator switching by eSim users compared to traditional Sim card holders.

However, the data did not cover South Africa, but with eSim increasing in popularity it is a matter of time before the same behaviour takes place in the country.

“Our analysis shows that the arrival of eSims is altering how consumers switch operators. They will cause operators to adopt new tactics to retain and acquire users, and threaten to make it easier for consumers to switch operators, as it means they can do so without face-to-face interaction or waiting for the shipment of a physical Sim card,” said Opensignal in its report.

Apple and Samsung have incorporated the technology into their smartphones. Apple began shipping the iPhone 14 and all its variants without a physical sim to the US in 2022, which pushed mobile operators to add eSim support to their networks. Samsung and Google offer dual-Sim devices that support both a physical and an eSim.

“It is possible to store several purchased eSim profiles so users can switch frequently between operators, using optimal tariffs for each specific situation like making a call or engaging in international roaming,” Opensignal said.

With eSim adoption rates increase is likely to benefit consumers as it makes it easier for them to operate the sim and switch networks. However, with the increase in eSims, it means network providers will face new challenges such as a decline in retention rates.

“As the technology grows, we will see a significant focus on loyalty programmes as telcos are forced to deliver more value to retain customers,” said a technology expert at one of the prominent network operators in South Africa.

According to a technology expert, “Technology is always accepted by the market if it brings benefit. With eSims come increased reliability, more use cases and a decrease in costs.”