Stalling the eSim – What Big Businesses Stand to Lose

Stalling the eSim – What Big Businesses Stand to Lose

Every now and again an innovation comes along that has the potential to shake up the system and force companies to reinvent themselves. It makes sense that businesses that have been built to sell a product or service threatened by the new innovation will be tempted to fight or stall development wherever possible.

The eSIM is a product that will allow customers to compare and change telecommunications companies with ease. Naturally, companies that rely on the current system of selling mobile plans and want to lock customers firmly into contract with their network will not be supportive of the new innovations.

Accusations in America

Some major players in American telecommunications are under federal investigation after claims were made by a wireless carrier and a device manufacturer (rumoured to be Apple) that they had been colluding together to interfere with certain features in the new eSIM to help them retain customers.

The companies under investigation are the two biggest carriers in the U.S.A, Verizon and AT&T, and the G.S.M.A are another party implicated in the investigations. Some sources have also named T-Mobile and Sprint. While the companies are based in America, their actions could have far-reaching consequences for the rest of the world.

What is an eSIM?

eSIM refers to an embedded SIM that comes pre-installed in devices. Because the eSIM is already part of the phone’s hardware, it removes the need for a physical, removable SIM card. SIM stands for Subscriber Identity Module, and the SIM cards we have today are a way for the phone carrier to recognise a user within their system. If you swap to a new mobile company, you will need to obtain a new SIM card so you can be identified by your new network.

In the foreseeable future, each telco will use the same technology that comes with their customers’ devices. The customer’s information will be encrypted and installed on it, and accessed by a carrier key that allows the telecommunications company to recognise them. Users will be able to easily switch carriers without needing a physical SIM. The eSIM will also be able to handle multiple carriers at once on the same device.

The eSIM Locked

eSIMs are smaller, more durable, and make it much easier for customers to change providers. While the size and durability make eSIM a desirable technology for telcos, the ability to change providers or to access multiple carriers on the same phone will mean they have to do more to retain their customers, and could result in a reduction in profitability.

The alleged collusion seem to be around finding a way to block a user’s ability to change providers while using an eSIM. That would allow companies to gain the most benefit from the technology while reducing the likelihood that they will have to lower their prices to remain competitive. The providers are accused of colluding to lock devices to their own networks, which would remove the eSIM’s ability to handle multiple providers at once.

The proposed eSIM standard would allow carriers to lock devices only with permission from the customer, and if the phone is bought with carrier subsidies. The accusation is that carriers are looking for ways to lock devices in other circumstances as well to keep people from accessing other networks on their device, even if the device has an eSIM and is theoretically capable of changing providers.

Waiting, Again

We’re still waiting for a global standard for the eSIM, and that process is now further delayed. Whether or not there has been a major collusion, the public will have to pay the price as eSIM development will be put on hold pending the results of the investigation. GSMA are responsible for releasing the new eSIM standard, which is problematic as they are one of the parties under investigation for collusion.

The delay is another disappointment for people around the world waiting patiently for the features that the eSIM offers. Once the technology has been developed and has become standard it will need to be incorporated into devices, which will bring another delay. It seems unlikely that big corporations can stall the development of eSIM forever (unless something better is developed in the meantime) but when customers will be able to access it is anybody’s guess.



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.