Operators fear eSIM, but Ericsson says it’s coming

An Ericsson exec said, “eSIM is here to stay. We want to support our customers to embrace the opportunities.” (Getty Images)

Ericsson has developed software to automate provisioning and other back-office systems for devices with eSIM. The Swedish vendor acknowledges that there is fear among some service providers about eSIM because it will allow consumers to easily switch carriers whenever they want. Ericsson is spinning its new eSIM offering as a way for service providers to improve their top-line growth.

Ericsson this week announced its new secure entitlement server and eSIM manager. Monica Zethzon, head of solution area communication services at Ericsson said, “The part that we’re doing is not the actual eSIM within the device. The piece that we have focused on is the remote management of the profile that you’re going to download. You need to automate the whole provisioning flow to access the right services in the network with the right data speeds and the right voice services.”

Apple is already using eSIM, as opposed to a physical SIM card, for the Apple Watch because the device is too small for a physical SIM card. 

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And GSMA has already set standards for how to download the user’s profile to the device with eSIM. “What has not been standardized is how the data is provisioned to the network databases and all the credentials behind it,” said Zethzon. “This is the missing part that’s been lacking from GSMA. Provisioning is always done by the server in the network.”

RELATED: Apple adds eSIM to new iPhones

Robert Khello, a strategic product manager with Ericsson, said the GSMA is working on standards for eSIM provisioning. But at this point carriers are still using legacy processes for physical SIM cards even when they’re provisioning devices with eSIM.

Khello said the Ericsson solution would allow a user to order a new device over the internet and then get it set up and able to use the new service “in seconds” compared to a provisioning flow that could take much longer with a physical SIM card.

Face the fear

The thing that carriers fear is that with eSIM, customers may constantly switch providers every time they see an advertisement on TV for faster speeds or cheaper prices. The mobile industry could see the same kind of fickleness that the streaming video industry sees: where customers subscribe to Netflix, for example, only long enough to watch a particular show. And then they unsubscribe and move on to a different OTT platform.

But dynamic pricing (and subscribing) is the wave of the future. Just ask anyone who's ordered an Uber and seen the price increase before their eyes. Asked if they thought eSIM was coming whether service providers liked it or not, both Zethzon and Khello said “yes.” Zethzon said, “eSIM is here to stay. It will for sure come. We want to support our customers to embrace the opportunities with the unique capabilities the service providers have.”

Khello said, “Everyone expects within a couple of years the amount of eSIM devices will reach to a billion. No one can ignore eSIM as such.”

RELATED: TracFone prepares a nationwide SmartSIM program

Ericsson is striving to point out all the upsides of eSIM. It says that with eSIM carriers can easily up-sell customers to add more devices. Also, consumers will be able to try out new offerings for a few days before purchase; It will be easier to provision travel specials; and it will aid in marketing campaigns.

"Most communication service providers see eSIM-enabled smartphones as more of a threat than an opportunity,” said Lynette Luna, principal analyst with Global Data, in a statement. "But eSIMs may very well be what CSPs need to break the falling ARPU curve, if they implement and market the capability correctly. eSIM can enable new use cases that can actually strengthen the customer experience."

Ericsson is working with mobile device manufacturers including Apple, Samsung, and Google. And it’s even in discussions with Microsoft. Of course, its new offering for eSIM provisioning and automation is targeted to service providers.

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