eSIM: the gateway to growth
At first glance, eSIM technology looks like a welcome evolution of the physical SIM that billions of people use every day around the world to get their mobile devices connected. Instead of first acquiring, then inserting, a plastic SIM card into our phones, we’ll simply be downloading them over the Internet, in the same way we download music today instead of purchasing CDs.
But if we look deeper, eSIM is actually revolutionising mobile, and those organisations that embrace the technology quickly, will steal a march on their competition.
The benefits of eSIM, over and above quick and easy device activation, are well known. Firstly, the removal of the SIM tray in devices enables much smaller and more water-resistant devices. Then, the costs and logistics around SIM card distribution, as well as the environmental waste impact, disappear and lastly, IoT devices can now be hermetically sealed from their outside environments and allow the network provider of a large estate of devices to be changed entirely remotely.
We’re seeing tremendous support for eSIM in most consumer devices, with nearly all the major device manufacturers now adopting eSIM across their entire product ranges - Apple, Google, Microsoft and Samsung to name but a few. Although consumers are only just starting to try out this new technology, it’s only a matter of time before they start making buying decisions in favour of mobile network operators who can supply eSIM services.
The GSMA, the trade body for over 700 mobile network operators across the globe, predicts that within 5 years, more than a third of all smartphones worldwide will be connected via eSIM rather than using a physical SIM card. Even within 2 years, that figure will be 10% and likely twice that for developed countries, according to our own research. What does this mean then for operators who do not have eSIM capability in place by then? Simply put, they stand to lose 10% or more of their existing customers who will have no option but to move to other networks in order to obtain the many benefits of eSIM. As is typical with disruptive technologies like eSIM, they provide multiple opportunities for growth for those operators that move quickly to adopt such technologies – whilst at the same time, representing a significant threat for those that do not.
eSIM brings numerous benefits to network operators, starting with faster and easier customer acquisition through all channels, but most notably direct (where the real profits lie). For example, imagine a consumer seeing an advert on TV for an unlimited 5G data plan; that consumer might just have purchased an iPhone 12 which supports 5G, but their current provider doesn’t provide a 5G plan. If the consumer scans the QR code shown right there on the screen, they are taken to a “try before you buy” sign-up page, download a 5G data plan and are connected in minutes. After experiencing 5G for a couple of days, the consumer doesn’t want to give it up so arranges a 12-month contract with the new operator – all without having to leave the comfort of their armchair.
You may have come across the term, “silent roamers” – these are people who when travelling abroad, switch off mobile data on their phone for fear of getting hit with high roaming charges. Instead, they make do with Wi-Fi wherever they can get it, or purchase a local SIM card. This is a lost revenue opportunity for the home operator, and eSIM provides an easy way to resolve this issue. All the operator has to do is provide the customer with a mobile app that will show the best local deals, no matter which country they are travelling to. Everybody wins here - the customer because their connectivity problems are solved, the local operators because of new business, and the home operator because of the revenue share deal they will have negotiated with the local operators.
Thinking bigger, why are operator brands limited to the countries they operate in? Why can’t they acquire customers from any part of the globe? The physical SIM card is a major blocking point in this case – the customer has to acquire a SIM card somehow and if they’re living outside the operator’s country of operation, there won’t be any retail shops to visit, and international delivery of SIM cards doesn’t make much sense. eSIM solves all those problems – because it’s entirely digital, the operator can set up partnerships with other operators to provide global services, advertise their brand at the Tokyo Olympic games in 2021 and quickly acquire customers from all over the world.
These are just a few of the opportunities that eSIM will bring, and all the mobile network operators must do is start planning today, buy in the required technology, and at the same time, define the new innovative services. The operators that choose to sit back and wait might well end up seeing their competitors stealing a march.
New government strategy to put UK ahead in global innovation
The UK government’s plans to increase private sector investment into elevating the UJ’s position in the global innovation race have been outlined in a new Innovation Strategy developed and launched by the business secretary, Kwasi Kwarteng. The strategy is part of the government’s “long-term vision” to boost private sector investment in R&D across the UK, enabling tech companies such as mobile networks to create new technologies.
While the private sector is important in boosting R&D spending, the government says that the UK “is still committed” to increasing annual public investment in Research and Development with the aim of reaching a record US$30.2bn (£22bn).
What will the Innovation Strategy allow the UK government to do?
By adopting the Innovation Strategy, the government claims it will be able to achieve several other goals. These include:
- Ensuring government procurement is proactive and supportive, providing a route to market for innovative new products and services
- Consulting on how regulation can ensure that the UK is well-placed to extract the best value from innovation
- Commissioning the Regulatory Horizons Council to consider how best to support innovation through regulation, including looking whether there are a set of high-level guiding principles for regulation that may apply broadly to any sector of innovation
- Introducing new High Potential Individual and Scale-up visa routes, and revitalise the Innovator route to attract and retain high-skilled, globally mobile innovative talent
- Undertaking an independent review to assess the landscape of UK organisations undertaking all forms of research, development and innovation
- Reducing complexity for innovative companies by developing an online finance and innovation hub between Innovate UK and the British Business Bank within the next 12 months
- Expanding IP education programme for researchers and launch International IP Services to bolster innovative companies’ and researchers’ ability to confidently collaborate, export and invest overseas
- Publishing of a new action plan on ‘Standards for the Fourth Industrial Revolution’, promoting standards that enable innovation to flourish
- Investing £200mn (US$275mn) through the British Business Bank’s Life Sciences Investment Programme to target the growth-stage funding gap faced by UK life science companies
- Supporting 30,000 senior managers of small and medium-sized businesses through Help to Grow: Management to boost their business’s performance, resilience, and long-term growth
Business secretary Kwasi Kwarteng said in a statement that “the UK can look back on a proud history of changing the world through innovation. From the industrial revolution to the vaccine development of the past year, the impact on our everyday lives is undeniable.
“That spirit of discovery is still alive in this country today, but we have not always turned our genius for innovation into jobs and companies here in Britain.
“The countries that secure leadership in such transformational technologies will lead the world, enjoying unrivalled growth, security and prosperity for decades to come – and it’s our job to ensure the UK keeps pace with the global innovation race”.
The organisation added that through the long-term plan, it aims to “rekindle our country’s flame of innovation and discovery”, and to aid businesses in taking the “vast opportunities” brought about by innovation.
“If we get this right, we can build the foundations for the new industries of tomorrow, and ensure British firms are at the front of the pack to turn world-leading science into new products and services that are successful in international markets”, the organisation concluded.
To implement the strategy, the government plans to work with universities and research organisations with five projects receiving part of £127mn capital injection through the Strength in Places Fund, which is delivered by UK Research and Innovation (UKRI).
In addition to the Strength in Places Fund, £25 million of funding for the Connecting Capability Fund will help drive further economic growth through university-business innovation.