60 second guide – how the eSIM will affect Australia
- eSIM technology will benefit Australian SIM Only and prepaid service users most. Physical SIM cards will no longer required. It will no longer be necessary to call the phone company you want to move in order to evaluate or buy your phone plan.
- This advancement in SIM technology will make the Australian prepaid market more competitive and is likely to result in increased savings for consumers.
What has already been released when it comes to eSIMs?
The patents for embedded SIMs have been around for at least the last 5 years. There have even been prototypes brought to market by the major device manufacturers to test key elements of how eSIMs will work. Unofficially, most of the eSIM related products (previous iPads and Samsung Galaxy Watches, for example) have performed poorly, commercially.
However, it’s been announced, recently, that both Apple and Samsung have indicated they are moving towards eSIM in the next generations of their respective smartphone products. This might only seem like a minor shift in the direction of phone tech but the eSIM has the possibility to disrupt the telecommunication industry. The major Australian telecoms companies we all know have maintained the status quo (in which we buy and use physical SIMs ) for two decades. Our suggestion is that they won’t be too impressed with the eSIM, which will make it easier for consumers to move from one service provider to the next.
With an already rapidly shrinking marketplace and prepaid plans becoming the norm, this technology stands to make prepaid users lives even easier as prepaid plan changes can be completed all at the tap of a finger, from the internal smartphone or supported handheld device.
What’s an eSIM?
For those of you who don’t tend to focus on phone technology , the eSIM may be a surprise. It doesn’t take too much thought to work out what an eSIM is likely to be. Basically it’s a card fitted into the phone, directly on to the motherboard of your eSIM enabled phone before you purchase your device. The new SIM is programmable. This means you can choose whatever telco you like or any Mobile Virtual Network Operator, for that matter directly from the handset.
The new eSIM offers users facilities equivalent to an unlocked phone, but without the need to get a physical SIM card. The eSIM breaks down traditional relationship that has been formed in the past with a carrier as it’s them who have traditionally provided the SIM. However, with an eSIM you don’t need to worry about the service provider until you have purchased the phone.
Apart from the absence of a card, the capabilities of the eSIM may remain the same
- Your eSIM is likely to compress all your subscriber information, contacts and text messages into a tiny 64 kilobytes, which is what the SIM card does today. That’s a remarkably small space and comparable to the 64KB used for the 1st landings on the moon by the Apollo Guidance Computer.
- Once you start to use an eSIM it’s like a card whirring away inside your handset. Any information you store on your phone, like web pages, telephone numbers and text messages, remains stored for you to access whenever you want. You will be able to use passwords which will as they do now stop, among other things, those valuable gigabytes being used by someone else when you are using your phone as a WIFI hotspot for your computer connection.
- What you won’t have to worry about is rummaging through a container looking for the SIM card you use for data or phone and slipping it into your handset as you should be able to change your mobile network operator (MNO) when you want.
SIM cards come in different sizes but not the eSIMs.
The Nano and micro SIM have recently been the as small as SIM cards could go. The multitude of physical SIM options currently in market create problems of their own. Users, who tend not to care about these things a great deal. have to know what your phone will accept before running out of the phone store. ( Whether they need a standard, nano or a micro SIM cards.
What does the eSIM mean to phone companies (MNOs)
The purpose of the SIM card is to identify the subscriber with a unique number code, which is known as the IMSI or (International Mobile Subscriber Identity), allows the user to access the service providers network. Once the eSIM becomes standard in Australia, switching from one prepaid MVNO to other will be able to be done with only the tap of a finger, rather than removing one SIM card and switching it out for different providers one. eSIM will remove the need for users to bother with physical plastic SIM cards and future smartphones and handheld tablet devices won’t need to be manufactured with this functionality.
Network operators will need to offer competitive deals more than ever before. Once a customer has purchased a SIM card with phone call and data rights it was far too complex just to ditch an operator and move onto another one due to more favourable pricing. It means getting a new SIM card, which isn’t so easy to get one’s hands on with a limit in the number of shop fronts representing the different telcos.
SIM cards have been in use for communication purposes since the advent of digital phone technology in the 1990s. What they offered the most is the ability to communicate by phone, wirelessly, without having to dash to a call box. Data came later, adding to the wide number of features that the handset hunger has been able to access in recent years.
It has been estimated that more than 7 billion SIM cards are being used worldwide. That’s a massive figure, seeing the world’s population is just a little more than that. It virtually equates to one SIM card for every man, woman and child. That’s a bit like every single person having an extra finger nail. If you calculate the weight of all that electronic memory and the material used to make it, it’s equivalent to a whopping 30 million kilos!
However, the traditional SIM as we know it is soon to be preceded by the card less eSIM.
G&D booth very popular at Mobile World Congress
The recent Mobile World Congress that took place in Barcelona, Spain hasn’t left much mobile technology untouched. A company called Giesecke & Devrient, has been dominating the market of Mobile SIMs. The company is over 100 years old, but despite its age is certainly up there in terms of tech know-how.
Gemalto G&D is now taking an important role in developing the eSIM. There was considerable interest in the G & D stand throughout the Mobile World Congress. This company is not only the brains behind the eSIM, but it also makes the chip module and is in control of the management of the software that is capable of downloading the specific profile of an individual network provider to the eSIM. G & D also looks after the security of the eSIM, which has been a particular concern in recent years . Their most up-to-date deal which Morawietz and Gerstenberger have highlighted, is supplying Huawei, one of China’s phone corporations, with “Watch 2.” This is a smartwatch that includes an eSIM, making it possible to sign up your smart watch that is cellular enabled as soon as you have purchased it.
How Can an eSIM Benefit Users and Mobile Network Operators Alike?
Often the best deal for all the facilities you love about your mobile phone is buying into a term plan which fixes you for that period. You go for it because it’s the simplest option and only needs one SIM card. With the eSIM it’s not tied to an MNO until you have agreed to a deal. With a simple click or 2 you can access another MNO once you have finished with the last. There is no need to queue up at the MNO’s shop front as you won’t need a SIM card. Obviously, you will lose out if you terminate an agreement before time is up but you won’t need long term agreements with a particular MNO anymore.
Increasingly phone makers and network managers are beginning to understand the advantages of the eSIM. They are already included in some mobile devices in the U.S. such as iPads, and car manufactures have been told to incorporate an emergency call facility into new cars in the form of a SIM that can’t be removed. This is fitted to alert emergency services if an accident has taken place. This new form of information storage is certainly more convenient for those who like to shop around for the best mobile deals as the eSIM will not be tied down to any one network provider.
As for the MNO, it will have to be less complacent about its subscribers and get out there offering better deals and access than ever before. If you are a global roamer the eSIM is the best option for you. No more hidden roaming fees added to your bill. You just get online in your new country and select the best offer that suits you.
It seems that the eSIM is quite likely to become a reality, as it has already been given the go ahead by the GSMA. This is the most important global association for mobile devices, operators and makers. Apple and Samsung are well into the planning stages of incorporating this new chip technology into their new products as they are rolled out. It will affect all new devices, such as smart phones, tablets, wristbands and smart watches. At this stage no one is really certain what the relationship is going to be between the telcos and this new technology. It may depend on what they negotiate with the phone manufacturers.
At the moment, you have two options for using a phone. The first is to buy an unlocked phone of your choice and then choose your telco or MVNO. The second option is to buy a phone from a telco and pay for it over time. Currently both options require a commitment to the MVNO of your choice. If you have an unlocked phone you can join two different telcos and put into your phone whichever SIM you choose, whenever you want. This is a great advancement on the first days of mobile phones in the late 1990s, where you bought a phone from the telco and it couldn’t be used with any other service provider. It was certainly of no use when going overseas until global roaming was later introduced at a substantial cost to the purchaser.
MVNOs will likely be the biggest winners from eSIM supported smartphones
MVNO providers which traditionally deliver great value money for deals will no doubt be the winners in the current marketplace, as they have the ability to quickly lower costs and alter their prepaid plans, leaving them with a massive advantage over the national carriers. The eSIM will mean that Australian MVNO providers will end up with much more leverage in their negotiations with the national network operating carriers, which will result in lower costs for their end users. One sector which will notice a loss in earnings is the manufacturers of the physical SIM cards, which are currently in use around the world. As of 2014 the SIM card manufacturing business globally was worth an estimated $5.4Bn.
An exciting piece of industry news which we can take away from this announcement is that eSIM will enable the barrier of entry into the market to be lowered, allowing large global companies such as Google and Facebook to launch MVNOs in Australia.
It hasn’t happened yet, but it’s on the cards. That’s the introduction of the e-SIM, or embedded SIM, in which the equivalent of a SIM card is permanently installed into a smart phone. This takes the responsibility off the shoulders of telcos and other smaller Mobile Virtual Network Operators (MVNOS) when it comes to providing a unique SIM card which is dropped into a smart phone or other mobile device like those emerging from the Internet of Things or IoT.
Many gadgets are getting quite small with barely sufficient room for the SIM card to be inserted. Most IoT devices need to be able to communicate with a smart phone using cellular connectivity so that means a SIM card of sorts is required to ensure a reliable connection. Once the e-SIM has transited from myth to reality it will give consumers the chance to compare different networks and choose a service from any connectable device and choose a service that best fits their requirements.
Digital transformation is around the corner
After resentment against Apple’s original e-SIM innovation the telecommunications industry has now swung in favour of the idea. This is partly to do with GSMA’s position on aligning all participants onto a standardized architecture to make the transition to e-SIMs much smoother. Also applications for machine-to-machine (M2M) technology have been adopting this architecture for embedded SIM cards for a long time with considerable success.
Research has indicated that for the future of consumer watches and other wearables it is better for them to be fitted with their own unique mobile-network connectivity. Due to the expected increase in the number of IoT devices and M2M gadgets, the GSMA has developed e-SIM specifications ready for distribution and in the next few years their presence is expected to significantly outdo the use of traditional SIM cards
In Conclusion – eSIMs rock
No-one needs to panic and start saving for new phones as the embedded SIM phone won’t become the norm for some time yet. When e-SIMs start becoming more common place profiling will be used through the same processes that has been used for the profile developments for the customary physical SIM card. SIM sellers will be using authentication information provided by the network operators so that unique keys for accessing the network can be generated.
As there will be no physical SIM card present, the details will most likely be saved using a digital form and will be waiting for a request to be downloaded which will be activated by what’s referred to as the embedded universal integrated circuit card (e-UICC), which is located in the handset.
Many industry analysts are predicting in the coming years, Apple will announce that they too will enter the telecommunications industry, offering their own MVNO prepaid plan services to consumers. While Apple have publicly denied wanting to be an MVNO, industry rumours suggest that their thinking on that has changed. While they will launch their offerings in the US to start with, it won’t be long before they are operating in the Australian marketplace. That’s especially true if, as we believe will be the case, the Apple Watch 3 has an iPhone in it, when launched in late 2017. Apple products tend to get launched in Oz at the same time they are launched in the USA.
Any move from the smartphone and tablet device makers will threaten the already cosy arrangements which the national carriers in Australia enjoy. The movement to eSIM once launched is predicted to take from 18 months to 2 years to reach a critical mass, but as users become more accustomed to the eSIM, it won’t take too long before physical SIM cards are a thing of the past.
Apple and Samsung have talked for some time about their imminent, important eSIM launches : http://www.dailymail.co.uk/sciencetech/article-3165198/Death-SIM-card-Apple-Samsung-keen-rolling-e-SIM-rumours-claim.html
Apple have said many times that they don’t want to become an MVNO. And they wouldn’t mislead us, would they ? :o) http://fortune.com/2016/05/24/apple-wireless-carrier/