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Impact of eSIM on procurement and supply chain

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by Maneesh Byadigera
1 January 2017

eSIM is an integrated SIM chip conceived and promoted by GSMA based on the need for users and MNOs/MVNOs to simplify the SIM application, installation, activation and maintenance processes. With its introduction, the onus of user accountability shifts from telecom service providers to mobile device OEMs with an exclusive emphasis on providing a robust and continuous network connection and coverage to its customers.

The commercial introduction of eSIM technology for various mobile devices will however impact the business operations of Telcos and MNOs across the globe from procurement to deployment. GSMA’s near-future objective is to completely standardize the remote OTA reprogrammable and provisionable eSIM across manufacturers everywhere. The adoption of eSIM technology helps in terms of simplifying the supply chain and enabling absolute focus on Quality of Service (QoS).

However, due to the increased ease of operator selection and switching by end-users, it is advisable for Telcos to consider a contractual mode of engagement with all its customers, and have their contracts accommodate stringent lock-in clauses with a relaxed pricing model in order to subjugate competition across its geographic footprint.

Benefits for Enterprise users and individual consumers:

eSIM offers ease of operator switching at contract-expiry via a simple phone call. Users will only have to register their mobile devices to use the services without the hassles of SIM/plan change and compatibility.

There will be a common global architecture with no compromise on existing SIM capabilities. Management of large scale volumes of M2M devices will be effective with no prohibition from third parties on future expansion of connected services.

SIM manufacturers and Telco service providers benefit from features such as reduction in logistical costs associated with handling traditional SIM cards, retention of existing SIM security levels and adding flexibility to the current product portfolio.

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