Is eSIM a friend or a foe? You may have asked this question yourself. Much has been debated about eSIM technology and its impact on roaming. These are embedded (eSIM) or programmable SIM (eUICC) that allow remote provisioning of multiple profiles without needing a physical card on the phone. 

There is no short answer. Let’s analyze it from different perspectives. 

Roaming Remains Strong for IoT 

The Internet of Things (IoT) is a global business where connected devices are often registered in various geographical markets in a state of permanent roaming. While much of the discussion surrounding cellular IoT connectivity in recent years has revolved around eSIM and its ability to localize traffic where necessary, roaming remains a critical tool to support global connectivity. There may be a misconception that eSIM impacts roaming negatively. In many instances, it is used to expand the potential roaming footprint by leveraging new roaming partners.  

Complexity and extraneous costs are preventing enterprises from adopting eSIM technology. They merely want their connected devices to ‘just work’ wherever they may be deployed, while, on the other hand, operators and specialized IoT MVNOs opt for using Multi-IMSI technology due to its simplicity.  

Some countries still prohibit permanent roaming as a preventive measure to shield their domestic markets against the resale of IoT connectivity. In the meantime, several operators have demonstrated that it can be presented as an opportunity to supercharge IoT, where most devices consume essentially very little traffic volumes. With the right tools in hand, operators can implement guardrails to selectively allow and profit from permanent IoT roaming connections. 

eSIM Roaming, a Rising Opportunity

On the other side of the spectrum, the consumer market is experiencing a rising demand for travel eSIM. This can be useful for travelers seeking more cost-effective connectivity plans to switch to different operators without having to physically swap out SIM cards. According to Kaleido Intelligence, roaming cost is the primary driving factor of travel eSIM adoption in areas outside Roam-Like-At-Home (RLAH) coverage. Their research points out that consumers are inclined to cheaper alternatives at a daily price point of 2 USD, even though they would still opt for convenience and continuity of their services with their mobile operator. Kaleido Intelligence estimates that 22% of international travelers will use travel eSIM by 2028. 

While operators want to safeguard their wholesale revenues, they should also be aware of new market entrants and the changes in consumer behavior. The introduction of RLAH regulations, defined wholesale capping charges, significantly impacted margins, however, it also boosted usage. Similarly, travel eSIM has the potential to open up new opportunities and offerings for operators. Operators can mutually collaborate and formulate new solutions to leverage the quality of their networks and user experience.  

On the retail side, operators know their own markets and can provide inbound travelers with local data options for their different needs. One may argue that this is a cannibalization of roaming, but this can evolve into new types of relationships. On the wholesale level, operators can define new eSIM roaming agreements to ensure profitability, which can include less traditional charging methods such as daily or weekly charges per eSIM. 

In light of this rising demand, TOMIA has been enabling operators with eSIM Detection capabilities so they can assess their markets and decide how to tackle this topic. The service probes inbound roaming registrations and, combined with traffic information, estimates the number of visitors using eSIM. This opens a channel for the visited network to start a strategic negotiation with the home network to retain that roaming traffic. 

Like the IoT Roaming Monetization journey, the detection is just the starting point. There are still several other topics to consider, such as the enablement of a marketplace for eSIM roaming offerings, the process for eSIM profile switching, and the awareness of these new services.  

If you are interested in knowing more about TOMIA’s eSIM Detection and would like to discuss how to profit from travel eSIM, please get in touch: