Incredible Examples Of New Phone Plans The eSIM will Create

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How will the eSIM impact the phone plans we see for sale in Australia ?

With the announcement that at least one version of the 2017 Australian Apple Watch (version 3) will have an eSIM inside, it’s natural to wonder about the impact the technology will have on the phone plans we buy. The experience of using an eSIM in a phone is markedly different to that associated with the physical SIMs we’re used to, although, like most tech evolutions, people will soon get used to it. But eSIMs won’t just change the set up process, they will change the phone plans we’re setting up. There are already examples of phone plans which usefully evolve those we’re used to. These plans are precursors of  what’s to come. Here’s what we think the eSIM will do to Australian phone plans. We think it’s likely to shake up the whole telco industry.

The interest in eSIM technology is in part to do with smaller connectable wearables hitting the mobile scene as they barely have sufficient space to house a relatively large physical SIM card. eSIMs however are soldered internally and they are neutral to specific telcos. This means if you’re not happy with your present telco there’s no need to search around for a competitor’s high street office or wait for an online order from an unreliable courier to arrive. You simply use the information the eSIM provides about available telcos and MVNOs.

A quick reminder on what the eSIM is

The eSIM is something we have covered extensively on this website. eSIMs or ’embedded’ SIMs will replace physical SIMs and will allow users to pick a phone company and plan from settings.

Fundamentally, eSIMs will allow us to change network providers more easily. People won’t have to carry around a pocketful of sim cards, one for each of their devices. Global roaming charges will become a thing of the past. eSIMs will let us buy data only plans for and from our laptops, ingender innovation in the types of plans that are available and encourage new entrants to the market, too.

We expect to see :

  • Plans with cheap data overnight:
    Imagine if your phone downloaded much of the content you needed during the day, the previous night, while you slept. Some plans could use the network only when it’s ‘quiet’ and keep costs low.
  • Plans which offer home fixed broadband style data allocations:
    We are already seeing huge data bundles, 30GB, 50GB and more. Soon these will replace home, fixed line broadband connections for a growing proportion of the population. Imagine sharing one of these mobile data plans across all the phones in your family. The eSIM could enable it.
  • Plans for your Personal Network:
    The Internet Of Things will also be enabled and supercharged by the eSIM. There will be a host of cheap sensors, connected to the internet wherever they are with eSIM technology. Imagine adding one to your child’s backpack so you always know where they are or having your preferences transferred from your phone’s eSIM to your car’s eSIM when you get in.
  • Daily plans:
    Optus already have daily plans available in Australia. Imagine a daily plan which you could use anywhere around the world, whenever you turned it on,. Below, we have an example of just that.
  • More regular comparison and movement : Perhaps more than anything, the eSIM facility will give consumers a greater chance of switching operators and accessing offers more easily and therefore more regularly. A short-term promotion could trigger the consumer to change a network – even if only for a month or two. The eSIM will make it easier for people to become aware of phone plans offered by Australian’s 50 phone companies. The ‘costs’ of comparing will be smaller. Users will be able to do it all from their handset. In markets where there is a large prepaid consumer base, this sort of behaviour will probably likely increase.
  • Fewer phones sold under contract : At present, around 20% of all phone devices sold are subsidised by the network provider as long as the customer signs a loyalty deal. This is set to drop to only 8% by 2020, which lessens the competitive advantage of one network provider over another.
  • More plans sold online : Not all mobile providers have retail outlets. Those that do know that face to face interactions with real sales people often sway a customer to take up an offer, even if it’s not the best deal. Retail point of contact will probably start to disappear from our lives over time as the eSIM takes over, leaving online methods as the only method of advertising and persuading.
  • Targeted promotions with immediate signup : eSIMs may be able to target new customers through promotional activities and the eSIM facility will mean the service can be activated immediately. The downside for the mobile operator is that the user may not be so likely to sign up to a favourable contractual relationship with a provider if they know that better deals are springing up all the time and they want to be able to have the flexibility to take advantage of them. This will be another factor which puts pressure on mobile operators to be more competitive when luring customers both new and old.
  • Internet Of Things Plans : Anyone manufacturing IoT enabled products such as ‘wearables’ and connected car devices will benefit from this technology.  The arrival of the eSIM will mean they could offer convergent deals for a number of different devices owned by the user such as the smart watch and smart car product. Since the eSIM can be embedded in these sort of devices. There are likely to be hundreds of data plans with small, 100MB or 200Mb allowances. Shared plans which allow users to buy a big bundle of data and share it between a myriad of personal devices will become more commonplace.
  • More local options when roaming : This will be far easier to do with if there is no physical SIM to worry about. Currently, in some countries, the only way of getting a new SIM is by getting it sent through the mail after ordering it on the selected mobile carrier’s website. This is of little use to someone visiting a country for a short time who finds their own country’s global roaming solution is way too expensive. There won’t be any need to queue up for a SIM card in a busy airport and then find your phone is incompatible with the telcos that have kiosks. You will simply switch on your phone and view the network providers and their offers and make your choice.

A specific example – Truphone

Truphone are one of the leaders in eSIM plans. They’ve given us an indicator of the way phone companies might approach things in the future with the recent launch of an entirely new type of plan, released to market already and based on the eSIM. Truphone is a phone company, a UK startup, with a difference. They use clever software and contracts we’ve never seen before to collect network capacity (essentially buying big bundles of data, SMS and voice services) from a number of phone companies in multiple countries. They then piece all of these together and sell it to users. What that enables is a new type of phone plan. One that automatically switches with you when you change location and move across a national boarder. All the user has to do is turn their phone on, then, the new eSIM technology Truphone has built their product around will give your phone a working connection, wherever they land.

Truphone’s is an example of the sort of advancement that the eSIM will allow. From a consumer (and, importantly here, the business traveller’s) point of view, removing the complexity of finding a phone plan whenever you land in a new country is a great feature which makes it worth buying the product. The new plans demonstrate an important principle but are not very good value. Typical plans might offer 500MB or 1GB of data and cost $10 AUD – $15 AUD. We have prepaid plans and data plans which offer much better value, already. Of course, the ones we show can only be used in Australia.

The pricing of global roaming will be easier to understand than current global roaming facilities offered by customers’ home network provider. Truphone are an example of the new entrants and new products entering the mobile telco market with the new eSIM launch. Maybe that’s why the company is currently valued at $300 million. This new plan makes Truphone an international inter-operator MVNO. The competition will affect revenues for conventional mobile network providers, as they might have to more competitive here as well as in their domestic markets. If they want to maintain their stake in the mobile network environment, now seems like a good time to start their planning now. They’ll want to take a lead in possible new initiatives and not wait by following others in their market.

In itself, the agreement Truphone have struck with the phone companies in each geography is innovative. It does build on some ideas which are already around, though. In Australia, we have companies which partner with more than one phone network. Take CMobile for example, who have agreements with both Telstra and Vodafone. You can buy a SIM from CMobile and attach to either the Vodafone or Telstra networks with it.

Note : These new plans from Truphone are only available through the UK at the moment.

 

eSIM WhatPhone

eSIM impact on data plans for laptops & wearables

Gemalto joined up with Microsoft in initiating the embed eSIM into Windows 10 devices for seamless connections. This will be rolled out with subscription management software, allowing Microsoft devices like the soon to be released Microsoft Surface Pro 5, which will be manufactured with eSIM technology and sold worldwide. It won’t be tied to any one telco and the telco chosen can be connected remotely.

Manoj Kumar, Gemalto’s M2M solutions head for Japan and South Asia, has reported that this development will change connectivity forever. This is because laptops will be able to connect to the Internet anywhere without having to tether to another connection. The expected roll out is planned for later this year.

The Gemalto eSIM is now used in Samsung’s Gerar S3 smart watch and the Limmex smart watch for the Euro market. It can connect to a cellular service anywhere.

Summing it up

There have been a number of false starts on the eSIM. We’ve thought for a long time that the new technology was on its way and nearly here. Now, the future seems likely to arrive soon.

“We would predict that the eSIM is coming to smartphones in the near term,” said Alder. “In Asia, you’ll find there are a number of Chinese providers who have eSIM on smartphones, and if you see it in one part of the world, it will spread. And if you see it on tablets in the Western world, it’s a fair prediction to say it will be on other devices.”

Industry scuttlebutt suggests that the main barrier to the implementation of the eSIM has been the carriers dragging their heels. That too is changing. Rumors suggest that at least one of the major phone companies is testing the eSIM in Australia. Having worked for most of the larger Australian telcos, I can tell you that what one phone company know/do the others tend to know/do too.

The phone companies may not like eSIM technology of course. The reason phone companies don’t want the eSIM to arrive is that it will increase customer choice of networks and might encourage new entrants into the market like Truphone. But that the very reason the move to the eSIM is a good move for users. Examples like Truphone, these new laptop focused plans and the other theoretical examples we’re provided are just the beginning. We will see new and innovative plans which consumers coming to the fore in the very near future.

Sources

AppleInsider has suggested a number of times ( as we have ) that the eSIM is on its way and will be here very soon: http://appleinsider.com/articles/15/07/16/apple-samsung-carriers-working-together-on-e-sim-standard-for-mobile-data-plans

The best information on the specs of imminent iPhones and Apple Watches with eSIMs often comes from https://www.macrumors.com/roundup/iphone-8/

We’ve talked a lot about Truphone here. You can find out more about their plans on this page : https://www.truphone.com/au/solutions/business-plans/

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.