ESIM Providers: Do MNOs Need Them?

There is an inexorable increase in eSIM (embedded subscriber identity module) users.

ESIM Providers: Do MNOs Need Them?

In ESIM: State of the consumer market and the road ahead, Global System for Mobile Communications (GSMA) claims that there should be 2.4 billion eSIM smartphone connections by 2025. Meanwhile, a report by Juniper Research says accelerated consumer eSIM adoption means eSIM device installations should grow from 1.2 billion in 2021 to 3.4 billion in 2025, a 180% change in just four years.

This means mobile network operators (MNOs) should find an eSIM provider with the connectivity management platform they can use to begin offering the eSIM option to their customers.

What Is an eSIM Provider?

An eSIM provider supplies MNOs and mobile virtual network operators (MVNOs) with the tools and technology they need to offer secure and reliable connectivity to eSIM customers.

An eSIM provider can:

  • Enable network operators to accept eSIM subscription registrations and remotely provision eSIM-capable devices.
  • Equip telcos with the entitlement servers required to activate subscriptions for eSIM companion devices.
  • Give networks the ability to offer different eSIM activation methods.
  • Furnish network operators with an eSIM management hub to let them manage multiple eSIM tenants, sales channels and platforms.

In the case of machine-to-machine eSIM management, an eSIM management company supplies connectivity management (e.g., custom applet development, network switching solutions) and remote management (remote SIM provisioning, over-the-air subscription management) services to MNOs and MVNOs. There are even eSIM providers that manufacture machine-to-machine SIM modules that enterprise clients need for their asset trackers and industrial internet of things (IIoT) devices.

ESIM companies also provide telcos with an interface through which they can easily and conveniently track and monitor their eSIM subscriptions, bill clients, and generate reports.

An eSIM company does many things for their MNO and MVNO clients. But you can think of an eSIM provider simply as a company that provides telecommunications companies with the software, hardware, and systems that enable these telcos to accept eSIM subscriptions, operate eSIM services and administer to eSIM subscribers.

Own Infrastructure or Software as a Service eSIM Management?

Of course, MNOs always have the option to establish their infrastructure instead of obtaining the services of an eSIM management platform and connectivity provider. Should an MNO lease the infrastructure of an ESIM provider or build its own?

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Own Infrastructure Hosted Onsite

MNOs that build their infrastructure onsite will own and thus have absolute control over such infrastructure.

Ownership means MNOs can use and dispose of their resources as they see fit. Thus, they can create and use their proprietary software to manage their eSIM subscriptions instead of being dependent on or constricted by the third-party provider's solutions. It also means they have complete jurisdiction and authority over who has access to their data. Thus, they can put as many safeguards as they deem necessary to protect their subscribers' data and reduce security risks.

Likewise, having their own infrastructure is particularly advantageous for MNOs in countries with strict regulatory controls over the storage and transmission of data. Onsite hosting means data is stored in-country (i.e., in the MNO's country). Thus, MNOs won't have to violate regulations prohibiting the overseas storage and transmission of subscriber data.

Unfortunately, this option can be costly. MNOs must invest significantly to build and establish their eSIM management infrastructure. They do not have eSIM subscribers but must spend money on eSIM infrastructure.

After infrastructure setup, moreover, MNOs will have to wait for the GSMA to audit their onsite management facilities and systems. Given the current lead time on GSMA's onsite hosting audits, it can be one to two years after infrastructure completion before MNOs can obtain the necessary approvals and finally start offering eSIM connectivity to their customers.

After passing the GSMA audit, they have to pay more than $100,000 (AED 367,304 or GBP 86,746.50) for their site's Security Accreditation Scheme (SAS) approval. Once they're operational, of course, they'll have to hire technical staff to run and maintain their eSIM framework.

Indeed, building one's eSIM infrastructure onsite is a slow, laborious, and expensive process, although it does provide excellent security and control.

Software as a Service eSIM Management

Instead of building their infrastructure onsite, MNOs can lease access to an eSIM management provider's infrastructure, available through the cloud.

This is ideal for MNOs that wish to get up and running with eSIM as soon as possible. They won't have to build anything. The infrastructure is ready to use and accessible through the cloud. Thus, they can immediately (or almost instantaneously) start accepting eSIM subscribers when they obtain eSIM management software as a service.

MNOs that choose this option do not need to make a big investment. Their infrastructure leasing costs (i.e., their eSIM management SaaS payments) are easily justifiable because they generate revenue for the company. This is unlike the first option, where MNOs have to make a significant capital expenditure to build infrastructure that may not be usable for years (considering the time they'll need to wait to get their sites audited and approved).

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One other great thing about this option is that MNOs need to pay only for the tools and the resources they need. Thus, MNOs can scale up and down as needed. They don't have to pay upfront to develop the infrastructure they cannot yet maximise.

Additionally, SaaS eSIM management solutions provide geo-redundancy. ESIM providers have data centres worldwide. Therefore, even when an outage occurs in one location, they can still maintain service through a backup infrastructure in another site. For MNOs, this means little to no downtimes, which should positively influence customer satisfaction rates.

For all its convenience, however, cloud-hosted SaaS eSIM management solutions can limit MNOs' eSIM management options. They can only use the system the eSIM provider makes available to them, and they do not have full control over their subscriber data.

Start Providing eSIM Service Soon

The eSIM market adoption rate continues to increase, especially in the consumer market. ESIM is thus a considerable opportunity for MNOs.

A good strategy for MNOs and MVNOs is to use the cloud-hosted eSIM management platform of a third-party SaaS service provider so they can start accepting and servicing eSIM subscribers as soon as possible. Once their eSIM service delivery is well and truly established, they can slowly develop their own infrastructure.