Will eSIM eradicate international roaming?

First engagers will play off device evolution to create differentiation and digital interfaces
ESim, SIM CARD, Roaming, Operators and Esim, REMOTE SIM


Consumer eSIM could eradicate the need for international roaming within the next three to five years, according to the findings of a research by ROCCO and UROS.

Although there is a lot of speculation on the rate of adoption of eSIM, no consensus has been reached. Analysts remain vague on figures, however a six to eight times growth over the next five years appears to be a common estimate.

When asked about whether domestic consumer eSIM was an opportunity or a threat, 14 operators from the Middle East consider the effect to be positive while nine consider it would be negative. eSIM will help device manufacturers and OTT players to directly manage subscription. This would suggest that eSIM plays into the hands of MNOs’ competitors, and that MNOs can only assume a passive role in the eSIM value chain, the report adds.

MNOs are positive that eSIM can bring with it several new opportunities. The technology can enable MNOs to build new interfaces with their customers and expand sales channels in ways that haven’t been possible before. With eSIM, MNOs can extend their sales of data plans to any device through unique digital marketplaces, and collaborate with digital players to expand their channels. “With eSIM, companion device bundling will become easier for consumers to adopt and modify. Shared data plans with split device and service fees can attract consumers who do not wish to commit to separate plans for each companion device,” says Jason Bryan, ROCCO CEO.

Better understanding of eSIM will also enable MNOs to engage with all types of opportunities in IoT through cellular IoT and LTE-M, which both require eSIM solutions.

However, the effects wouldn’t be all positive for the MNOs, the report warns. For instance, the dynamics of industry rivalry may be affected, as MVNOs will be able to enter the market with more ease.

When MNOs were asked if they would support eSIM within a roaming scenario, 33% consider it a threat to inbound roaming revenues while 27% see it as a threat to outbound roaming revenues. However, a majority of the MNOs support the scenario or are still considering it.

So, would consumer eSIM could eradicate the need for international roaming completely? 47% of MNOs think it’s very likely and 28% think it’s likely. Due to the impact of eSIM, operators think not many MNOs in the Middle East would consider it. While operators had several remarks on this topic, one seems the most plausible: “There will be benefits and drawbacks, I only hope that MNOs are strategically ready.”

Overall the research distributed the MNOs into two main categories based on their various responses to the question of eSIM- 20% were identified as first engagers while the rest 80% were the fast followers. First engagers will play off device evolution to create differentiation and digital interfaces, while the fast followers know eSIM devices are coming however aren’t exactly ready for mass adoption of the same.

The introduction of eSIM will not directly change the fact that MNOs will remain in control of their network as well as its users, pricing and service quality. Consumers will still be demanding a combination of quality networks and reasonable pricing, instead of always sacrificing the former to the latter.  

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