Embedded SIM technology boosts IoT connectivity

Embedded SIM technology boosts IoT connectivity

Based on Ericsson’s latest Mobility Report, the number of Internet of Things (IoT) connections will reach nearly 25 billion by 2025. As the number of connected devices increases, industries and enterprises place more and more demands on cellular technology for connectivity. A potential catalyst to digitally manage the cellular connectivity lifecycle is embedded SIM (eSIM) technology. Although we have started to see some traction with eSIM, there are still some challenges. 

What is eSIM?

eSIM is described as an embedded universal integrated circuit card (eUICC) defined by GSMA, the global association responsible for setting the overall telecommunication framework with approximately 800 mobile operators. Compared to legacy plastic SIM cards that are removable, the eUICC can be soldered directly into the device. With the evolution of the eSIM/eUICC, it has been physically improved to be able to fit extreme environments (temperature, humidity, vibration, water-resistant, and so on), and across the long life cycle of IoT devices.  

eSIM technology also allows remote provisioning of subscription credentials to IoT devices with specifications outlined by the GSMA. One of the key requirements is that eSIMs must adhere to the same security specifications as current SIMs. 

The ease of eSIM and seamless connectivity bootstrapping 

One of the fundamental values eSIM brings into IoT is the bootstrapping of connectivity. Bootstrapping is the process of connecting new powered-on devices. Bootstrapping is used to connect devices to the trusted network as well as any other necessary management servers such as device management, connectivity management, etc. Because IoT devices usually are deployed on a large scale, the bootstrapping process therefore needs to be fully automated and standardized. Cellular connectivity can provide automated bootstrapping with the use of eUICC as a global standard to secure bootstrapping identity.

However, there is a barrier to handle legacy SIM cards for a large amount of IoT devices in both the device manufacturing and logistics phase, and during the entire device lifecycle. With more devices adopting eSIM technology, enterprises will enjoy seamless onboarding experience to connect their devices to a network in a secure and fully-automated manner. Beyond connectivity bootstrapping, some IoT devices may even be born with an eSIM that has device bootstrapping identity. It can facilitate a seamless onboarding of devices to the respective device management servers as well as secure the device access and data communication with the IoT cloud.  In a nutshell, IoT devices with eSIM are born connected, secured, managed, and even cloud-ready. 

Benefits of flexibility

One of the great benefits eSIM brings to consumers, Communications Service Providers (CSPs) and enterprises, is flexibility. As a key component of connectivity services, eSIM makes the selection, contracting, and onboarding of CSPs easier. Consumers do not need to look for CSPs and go to CSP shops to buy SIM cards. For large IoT enterprises, there is no need to physically install or replace millions of SIM cards for their worldwide connected devices. Some of these devices may be used in remote areas or locations difficult to access. 

eSIM consumers and enterprises can continue to enjoy all legacy SIM services such as roaming services, local breakout services, or SIM applets with multi-International Mobile Subscriber Identity (IMSI) services when and where applicable. As a key innovation, eSIM can trigger a localization service with the flexibility to choose a new local CSP to remotely provision and activate a new subscription to the device when needed, over the air.

This flexibility truly enables global device manufacturers to rely on a single global eSIM to be able to connect all their devices all over the world. eSIM technology simplifies device manufacturing and logistics by enabling a single stock-keeping unit. Another benefit is guaranteed seamless global connectivity services provided by CSPs across the entire device life cycle. The transition to eSIM is a key milestone and enabler for cellular IoT to take off.

Challenges for eSIM

eSIM technology can enable cellular connectivity but the current eSIM market is fragmented and delicate. Even if eSIM technology has been available for several years, adoption ​remains low compared ​to its long-term​ potential. Traditional SIM technology is still dominant and fulfills a purpose.  The implementation of eSIM technology cannot be considered a one-off event, it depends on a global eSIM infrastructure rollout and an evolution in both technical and business processes. For constrained low-cost IoT devices, eSIMs may add unreasonable bill-of-materials costs. A diverse IoT market, the security​ aspect, immaturity of technology and uncertain business models are the main challenges for widespread eSIM adoption.

Discussing eSIM with the experts

​During IoT Day Stockholm this September 2019, there was an open discussion among CSPs and enterprises about eSIM. Topics included the challenges for wide-spread eSIM adoption, the business opportunity for CSPs and enterprises, how to simplify device activation and connectivity, and future perspectives.

A better explanation and understanding of the eSIM ecosystem and the need to envision the business potential were some of the main conclusions of the discussion. eSIM technology is available, but there are some barriers to manage. These include having an infrastructure in place and technical maturity. Industry standardization, business models, and offerings need time to develop and align with CSPs and enterprises.

What now? Co-existence, new models and building the ecosystem

Although eSIM technology is challenging, it is taking off and will co-exist for a long time with traditional SIM technology, driven by market needs. eSIM will further stimulate business innovations to enable valuable use cases that unleash new business opportunities and revenues for both CSPs and enterprises. To move forward, eSIM requires a global standard, true interoperability, and global infrastructure in place.

For example, as eSIM evolves and becomes more established, new business models and solutions may need to be offered such as a co-seller model or reseller model solution. A true “single pane of glass” global connectivity service offering is expected to be in place, with a commonly agreed business model and technology platform.

Overall, the community of CSPs and enterprises need to work together to unleash and enable broader adoption of these capabilities. By looking at the broader ecosystem, eSIM can be a catalyst for wider cellular IoT connectivity.

Read more about the evolution of eSIM technology. 

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