H2O Wireless and Pure Talk — both of which are mobile virtual network operator (MVNO) brands owned by Telrite Holdings — will begin offering eSIM in the first quarter of 2021. Both MVNOs operate on AT&T’s network.
New customers can immediately sign up for H2O Wireless or Pure Talk services with any eSIM-enabled device. There’s no need to go to a store or wait for a SIM card via the mail.
“Customers can easily switch from a high-priced plan to a Pure Talk or H2O Wireless plan and start saving money immediately,” stated a Telrite press release.
The company is using eSIM management software from Giesecke+Devrient. The onboarding software is GSMA-compliant, and it can be used independently from any eSIM technology currently in use on smartphones.
According to Jeff Moore, principal of Wave7 Research, H20 Wireless has about 1 million subscribers. “It is always one of the top three performers in our independent multi-carrier dealer survey,” said Moore. PureTalk is smaller, but Moore said it is doing TV advertising this year.
“The big picture is that the more prevalent eSIM becomes, small carriers like H2O Wireless and PureTalk are share takers, while large carriers like Verizon and AT&T lose share,” said Moore. “eSIM is in the interest of challenger carriers.”
But there’s a lot of cross-over between carriers and MVNOs. The big carriers own their own prepaid brands, and they lease their networks to independent MVNOs.
Other MVNOs and eSIM
Visible is Verizon’s digital-driven prepaid brand, and Visible is currently testing eSIM capabilities.
Global Data analyst Lynnette Luna said of Visible’s move toward eSIM, “It 100 percent makes sense. They want to be all-digital, but they don’t have eSIM.” Visible customers still have to order a SIM card to be delivered in the mail.
Besides MVNOs that want to be all-digital, eSIM is also being propelled by the Coronavirus pandemic because people don’t want to go to retail stores. “I think everybody is moving to digital in light of Covid,” said Luna.
Early this year, it looked like the MVNO Tracfone had some aspirations around an innovative SIM technology. Tracfone put out some marketing information, indicating it was planning a SmartSIM program in the United States where subscribers would be automatically connected to the best wireless service wherever they were without any interruption.
But in September, Verizon said it was acquiring Tracfone.
Luna joked that when she saw the Verizon/Tracfone news she thought, “Well that will slow [SmartSIM] down.”
“Verizon has never been a big proponent of eSIM,” she said. “They don’t market the capabilities or services. You really have to look on their websites to figure out how to use it.”
It’s also worth noting that T-Mobile and Dish have both promised to offer eSIM technology as part of their agreement with the Department of Justice related to the merger of T-Mobile and Sprint.
eSIM stumbling blocks
There have been two factors that have slowed down the usage of eSIM in the United States. First, a lot of phones have traditionally been locked. Consumers end up with a locked phone when they accept financing from their wireless carrier, paying for their new phone over time as part of their wireless bill. In exchange for that benefit, the carrier locks the phone to its own network. If the consumer wants to switch providers, he or she has to pay off the phone and request an unlock-code in order to use the phone on a new network.
But more consumers are buying unlocked smartphones now. The research firm NPD Connected Intelligence recently found about 50.1 million active unlocked smartphones are running on U.S. mobile networks, an increase of 8% from Q1 2019 to Q1 2020.
The second factor that has slowed the uptake of eSIM has been that a lot of cheaper phones don’t come with eSIM technology.
Luna said Apple has included eSIMs in its iPhone for several generations, and Samsung is now on board with eSIM. “The number of phones is still pretty small, but the number of vendors is growing, including Motorola, Google and Huawei,” said Luna. “It’s a matter of extending to more phones and cheaper phones.” Many MVNO customers are cost-conscious, and they wouldn’t be interested in the Motorola Razr, which costs at least $1,000.
Luna said there are still kinks to be worked out in terms of the eSIM onboarding software, as well. She said it needs to be streamlined a little better to make the whole process easier for consumers. “Every OEM has their own quirky capabilities in there. There’s a need for one management system that could handle them all.”
Ericsson is one vendor that has developed software to automate provisioning and other back-office systems for devices with eSIM.
Asked if she thought smaller operators are set to use eSIM to take a bite out of the market share of the bigger operators, Luna said, “Watch the MVNO space because they’re the ones that are going to adopt eSIM more aggressively. We’ll start to see value carriers and greenfield carriers like Dish being the market challengers and being more nimble this way.”