eSIMs Are Here and Operators Are Prepared for the Challenge

10th April 2016

eSIMs Are Here and Operators Are Prepared for the Challenge

The evolution of the SIM is seeing tremendous change. The days when a physical plastic SIM card was replaced in a mobile phone might be gone in the future. Now that we are in the Age of Connected Devices and wearables, the eSIM is going to revolutionise our devices, and yet it is going to act as the security token of our devices.

Mobile World Congress has always been a device show, ever since its early days in Cannes when it was known as 3GSM World. Even after its move to Barcelona in 2007, it has always been the device halls where the excitement has been. This year was no different, but for once it wasn’t about the device itself, it was what was built within the device – the eSIM and this is definitely one of the most important developments in mobile for the past two decades.

The eSIM is familiar to those in the mobile industry who know of it as an embedded machine‐to‐machine (M2M) technology. For attendees, however, at this year’s MWC it was clear that the eSIM is crossing over to consumer devices and it is happening rapidly indeed. This acceleration is because of the proliferation of connected devices that humans are carrying around.

According to a November 2015 report from Gartner, there will be 6.4 billion cellular‐connected ‘things’ (not Bluetooth or WLAN) in 2016, up 30% from 2015, and will reach 21 billion by 2020. This year alone, 5.5 million new things will get connected EVERY day.

The SIM card is transforming itself from a plug‐in hardware piece to a SIM that will be built into devices during production. This is a dramatic transition in the telecommunications industry and has huge ramifications for many parts of the industry’s ecosystem. As with removable SIM cards, eSIM security is based on a SIM chip; a built‐in security module.

The eSIM profile must be encrypted for the service to ensure end‐to‐end security of the entire transmission between eSIM management servers and the SIM module. Like many other transformations, this development is fully dependent on specifications that allow the global roll‐out of billions of connected devices. The latest GSMA RSP (Remote SIM Provisioning) is a massive step in the right direction in this roll‐out.

The mobile industry has always been held back at crucial times by fragmentation, but with such an agreement, the eSIM is likely to be adopted, not just by early risers, but across the industry and across the world. This is a huge issue for network operators. They may be the gatekeepers of mobile services, but at previous times their business offerings could have adapted more rapidly to the market.

The Apple Store and Google Play store were both vast improvements on the existing operator marketplaces and offered the consumer more choice on their devices. This was augured by operators offering flexible data plans, which created a consumer data culture that social media companies took advantage of.

With the advent of the soon‐to‐be ubiquitous eSIM, network operators have the opportunity of a lifetime to lead this new normal. The only way, however, to do this is to have flexible service engines that can manage billions of IoT devices.

eSIMs Are Here and Operators Are Prepared for the Challenge

G&D has moved quickly with its AirOn eSIM management solution. It recently delivered this for Group and O2 Telefónica’s first implementation of the Remote SIM Provisioning service. In industry parlance, this means G&D has launched an interoperable solution for using eSIMs in companion with consumer mobile devices.

This is especially crucial because Vodafone has already launched and o2 Telefónica will soon launch the Samsung Gear S2 classic 3G smartwatch in Germany. It is the first device in any market to contain an embedded eSIM based on the new industry‐agreed specification. Perhaps this industry development will finally consign fragmentation to where it belongs – the past.

“We have been driving the eSIM development from the beginning. Thanks to the eSIM, smart devices such as smartwatches, fitness trackers, and data glasses that don’t offer space for a conventional SIM card, can be connected to the mobile network very easily,” said Carsten Ahrens, Head of the Telecommunication Industries division, G&D.

Sales expectations of new wearables such as the Samsung Gear S2 3G smartwatch are reasonably high, but not as high as the expectations of the eSIM. Those bold enough to embrace this technology at the start of its evolution are going to leave a huge mark on how the mobile industry will develop this decade.

A quick and comfortable Customer registration

Retail Store

A consumer just bought a cellular‐enabled smart watch in a retail store, which contains an embedded SIM. He now needs to choose an MNO to serve his new device.

MNO Store

He subscribes for cellular service from the chosen MNO. At the PoS, the agent takes a starter kit which includes an eSIM activation voucher. As the SIM is already embedded in the smart watch, the package does not contain a physical SIM anymore.

MNO Store

Just like for a standard physical plug‐in SIM, the PoS agent scans the ICCID barcode on the rear side of the starter kit. This process activates the ICCID and links it to the contract of the consumer. Alternatively, this physical eSIM activation voucher can be replaced by a digital version.

Customer

The consumer completes the activation process with his smartphone later on. With the MNO’s “ConnectivityApp,” he automatically pairs both devices via Bluetooth as the smart watch has no cellular connectivity yet. He is also guided by the app to scan the activation QR code on his activation voucher using the smartphone’s camera.

Giesecke & Devrient

The smartphone sends an activation request to the back‐end system AirOn, which is provided and managed by G&D. This initiates the generation of the specific subscription profile package for the SIM in the smart watch. AirOn sends the encrypted package over the air via the smartphone’s Bluetooth channel to the SIM in the watch.

Giesecke & Devrient

The smartphone sends an activation request to the back‐end system AirOn, which is provided and managed by G&D. This initiates the generation of the specific subscription profile package for the SIM in the smart watch. AirOn sends the encrypted package over the air via the smartphone’s Bluetooth channel to the SIM in the watch.

Giesecke & Devrient

The consumer now has a full‐fledged subscription on his watch and can use the watch as a stand‐alone mobile device connected to the mobile network!

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