In this article we explain how eSIMs are different to Soft SIMs and which technology is of use in which situation.
Introducing the differences : eSIMs vs Soft SIMs vs Reprogrammable SIMs
Technology often starts with a number of similar and competing rivals. Take the home video player for example. Betamax fought with VHS for a few years before VHS became the standard.
The same is happening now, in the telecommunications industry when it comes to SIMs and the rising tide of their next generation. There is a lot of talk in the industry about Embedded SIMs vs Soft SIMs vs Remotely Provisioned ‘Soft SIMs’.
A number of ‘factions’ are competing to further their interests. As usual. Each group has different needs and propose different technology to achieve them. The current status of each and the feedback we’ve heard about their motivation leads to a compelling, seemingly likely outcome.
Let’s consider who’s involved and what they want.
- Big Telcos :
The tier 1 phone companies ( including, in Australia, Telstra and Vodafone ), appear, at this stage, appear largely resistant to change. Contacts in one of these companies have indicated that they have reached some of the same conclusions as we have about the medium term effects : Specifically, that smaller phone companies will be beneficiaries of the increased competition eSIMs will provide. Bit telcos fear higher levels of churn associated with a phone plan market with the reduced friction that any non hardware based SIM would lead to.
- Small telcos :
Smaller ( ‘MVNO’ ) phone companies, are starting to look in to the next generation of SIMs and how it might affect them. The feedback we’ve had are that the larger players and their wholesale providers are tight lipped on the subject.
- Phone makers :
In the industry, these are called ‘OEMs’, a definition which includes Apple and Samsung. They have each started trials of ‘eSIMs’. However, both are actually physical SIMs which can be reprogrammed. We explain the difference below.
- Businesses :
There are a lot of businesses around the world interested in and pushing for Machine To Machine communication. The numbers are staggering. Some believe that by 2020, there will be 70 billion devices connected to the internet.
Commonalities between Embedded and Soft SIMs
The purpose of a SIM isn’t being changed by any of this technological evolution. SIMs will always be and have always been a way for people to have a secure method of accessing a phone company network.
However, as we all move to a world of billions of Machines communicating with billions of machine and the Internet Of Things, the practicalities of maintaining secure access to wireless networks for each device devices becomes problematic. There are two polarized solutions proposed and one option which appears to be an acceptable compromise for most parties involved.
Comparing Embedded SIMs and SoftSIMs
The two polarized next gen SIM solutions are :
- eSIMs – The Embedded SIMs :
Embedded SIMs are physical SIMs which are permanently placed in ( literally embedded in ) devices which connect to the internet. They are integral to the device. i.e. They cannot be removed. Embedded SIMs are already a huge deal for car companies. Most new luxury vehicles shipped in the northern hemisphere contain embedded SIMs. These are seen as more secure by the telcos but less convenient for business seeking to connect their coke machines to the internet. Machines like this could be out in the field for years, unsupervised. At some point, the owner may wish to switch telcos. If the SIM is embedded and fixed to a single telco, this could be difficult.
- Soft SIMs :
Are a conceptual capability in a device. They can be provisioned remotely ( OTA – Over The Air too. ) There is no SIM at all in the device. The provisioning information is held in memory as part of other computing equipment. Phone companies are against these because they are perceived as more exposed to the question of hacking. And hacking could compromise individuals personal information and telcos revenue / brand.
The medium ground – reprogrammable SIMs
The medium ground appears to be a practical reality. Reprogrammable SIMs are in existence and in use already.
- Remote Provisioning ‘reprogrammable’ SIMs :
A physical SIM like the Apple SIM which can be reprogrammed with the provisioning information from a number of different networks. These SIMs have more memory so they can hold more than one operator profile. Swapping profiles has the same effect as swapping SIMs between operators. However, they can still be removed from the product and replaced with the physical SIM from any other phone company. In this regard, the Apple SIM provides for the benefits of both extreme solutions and removes the ability of the phone companies to not play. If, for example, in Australia, Telstra, Optus and Vodafone refuse to sign up to Apple’s Reprogrammable SIM program, customers could not select to connect to those phone companies’ networks through Apple’s settings. It’s possible that those customers would be able to sign up to smaller phone companies’ networks who did offer to participate. In either circumstance, if the person with the iPhone wanted to get a hardware SIM from phone companies who were not involved, they could. Everyone is at least satisfied.
The GSMA is moving towards a single agreed standard which will cover the requirements of all three of these solutions. It may take a long time to get there. It appears that, with the Apple SIM and equivalent reprogrammable SIMs, the thin end of the wedge has been defined.
More on these new SIM types
As we’ve said, a soft SIM is an entirely software based replacement for the classic SIM card. It’s an alternative to the eSIM. There are no plans that we are aware of to roll out soft SIMs at this time. In theory, it will do the same thing as any other SIM, it will allow users to connect to their network of choice, by selecting the carrier which they wish to use and entering in their details. No longer will users needs to replace the current physical SIM card in their device and wait to be ported to their next service provider. Switching providers will be automatic and instant, all done from within the device with only a few taps of your finger.
How these new SIMs will affect users
Consumers are the biggest winners from any of these changes in SIM technology. Being able to connect to a different network operator at the drop of a hat in real time, is great news for Australian consumers which are calling out for more choice and freedom in the mobile plans which they use.
While in recent years in Australia consumers have been lucky to receive much more choice thanks to the introduction of MVNOs entering the telecom industry, allowing them to switch providers if they find a better deal, still, for the most part, the telcos hold all of the cards. Apple understands this which is why they are so heavily investing in this type of future-thinking technology. A happy consumer is more likely to be loyal to a brand, which puts them in a good position in the future should they also enter the Australian telecommunications market as an MVNO themselves.
How these new SIMs will affect phone manufacturers
Apple, Samsung and Google have for a long time wanted to reduce their reliance on the telecom operators, for when it comes to both distribution of their devices and the plans which are associated with their devices. In recent years, all three companies have slowly started to move more in the direction of selling their own manufactured devices online, as in the case of Google and their Nexus smartphone. It’s pretty obvious that they are doing this as they want more control and a much larger share of the telecom industry.
While this sounds like good news for consumers, we could end up in the future with a situation where the smartphone manufacturer controls the device which we use, the MVNO we use and the network which we connect to. Apple is a large company which is constantly making consumers lives easier with the advancement of new technologies which they introduce via their innovative products. However, we could all end up with a situation where we are locked into their eco-system ultimately and that includes the telco cellular coverage aspect of the customer experience.
How the phone companies might feel about it
Telcos for the most part will be the biggest losers from the large scale roll-out of soft SIM technologies. Removing all the power from them and putting it back in the hands of consumers will no doubt have a large effect on the telecommunication companies earnings, which will not make them happy at all.
Consumers who are not fans of the large smartphone manufacturers Apple and Samsung might find themselves in a future situation where they will have to purchase these companies products to take advantage of soft SIM technologies, if it becomes an industry standard and if smaller mobile phone manufacturers don’t offer the same range of functionality features.
What could the world look like in a few years when everyone has one of these new SIMs?
The traditional physical SIM card will continue to exist along with the soft SIM, but as with all traditional technologies, newer advancements will always offer better features, choice and functionality. Australian consumers will be much better off, allowing in real time to select the current best SIM only or prepaid deal for them, based on their real-time usage. Postpaid mobile phone contracts will no doubt go the way of the dodo, as there will be no need to be locked into long-term two-year contracts.
Being able to buy the latest smartphones outright and direct from the manufacturer, with the ability to switch network providers in real time using soft SIM technology, users will be able to take advantage of promotions and special deals on the fly.
Reprogramable SIMs beat eSIMs and Soft SIMs
This situation is not unique. Telco is an industry beset with technology and acronyms. Similarly, 4G and LTE are used interchangeably when they are different things.
A lack of agreed standards always disadvantages any industry. Trains with different gauges in different Australian states were more expensive to produce ( less mass production was possible and freight had to be unloaded at the state line and repacked to have it continue on its journey.) This was obviously more expensive as a transport cost – an expense which would have eventually been passed on to users.
When it comes to standards for Embedded and Soft SIMs, there are so many credible players with invested interests in the status quo, it’s turned in to a ‘Game of phones.’ ( With apologies to Virgin Mobile who coined that phrase for a game 2 years ago. ) It seems that Samsung, Apple and ( potentially ) a consortium of other OEMs have established reprogrammable SIMs as a way to start the avalanche of movement towards much more flexible, potentially ultimately entirely soft SIMs.
The reprogrammable SIMs they’re trialing now are probably worse for the phone companies than they realise. They can hold two SIM profiles at once. This removes coverage as a differentiator. Shortly, people will be able to use a cheap Vodafone connection when they are in town and a more expensive Telstra connection when they’re out in the bush. Apple have thrown all the cards in the air again. Let’s see where they land.
- What is a reprogrammable SIM ? : http://blog.cartesian.com/project-fi-programmable-sim-on-googles-android
- the GSMA clearly outlines the differences between the different iterations of the SIM evolution : https://www.gsmaintelligence.com/research/?file=81d866ecda8b80aa4642e06b877ec265&download
- E&Y also offer clarity on the similarities and differences between the types of virtual SIM available : http://www.ey.com/Publication/vwLUAssets/EY-mobile-network-operator/$FILE/EY-Embedded-Sim-Studdy-White-Paper-September-2015.pdf