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Who Needs eSIM for IoT?

by Robin Duke-Woolley, CEO

May

Article

The quick answer to this question is – everyone. The somewhat longer answer is . . . it depends. You need to look carefully at the teeth of any gift horse and eSIM is no exception. It pays to take care because the subject of SIMs is surprisingly complex. It is not just about technical solutions –the greater complexity actually lies with commercial issues.
  
Why is eSIM needed?
For product manufacturers (OEMs), there has never been a greater need or opportunity to connect their products to the Internet. As Figure 1 shows, a product that is not connected stands or falls by the product offering itself. That offering cannot generate data for new services or be updated with new software features, so will quickly lose its competitive position in the market compared with others that are connected and can do these things. More than this, an unconnected product cannot be remotely maintained either and its performance in the field cannot be checked. The total value of an unconnected product resides in the product itself, whereas the total value of a connected product includes both the product and all the services created by it being connected.
 
In essence, that means a product that is not connected is likely to have an increasingly serious competitive disadvantage compared with a similar competitive product that .isconnected, and is
therefore less likely to prevail in the longer term.

Figure 1: Connected products create more value than unconnected ones.

As this fact has become more widely understood, the means for connecting IoT products have become more critical. For mobile operators, the traditional SIM card is both a boon and a problem. A boon because it provides increasingly important security safeguards. A problem because, as the volume of connected IoT devices grows more quickly, the logistics of shipping so many SIM cards and matching them up with the right connected devices becomes ever more challenging and costly. Either the volumes get throttled by the logistical difficulties – which add potentially huge costs – or the SIM needs changing to accommodate them. This is one reason why SIM evolution is needed

OEMs in all sectors – buildings, consumer, energy, healthcare, industrial, networks, retail, security/public safety and transport – must now develop service strategies for their offerings in order to compete in their own future market, unless they already have. That means they must include internet connectivity for their IoT products
. Together with others, it has led to both the multi international mobile subscriber identity (IMSI) and the eUICC forms of SIM.  
  
Do we need both multi-IMSI and eUICC?
The difference between multi-IMSI and eUICC is quite subtle. The eUICC itself is a SIM capable of being remotely provisioned and comes in a range of form factors. eSIM refers to the whole solution of providing a remotely provisioned SIM, including the hardware, software and subscription management system needed to deploy it. 

It is also the case that the technology for remotely provisioning a SIM has been commercially available for a few years, but initially in proprietary solutions. In response to the growing potential of this technology the GSMA, which represents the majority of mobile operators worldwide, has now created and continues to develop an eSIM specification for remote SIM provisioning that represents the industry’s best approach for creating a standard. Remote SIM provisioning involves downloading a network profile and network key, which in turn requires the consent of the network operator that owns the network profile. To do a network swap requires two network profiles from different operators to be present in the SIM – the original one and the one being swapped to. 

Within a 
network profile are many IMSIs and a Multi IMSI approach provides the facility to change the IMSI that is active on a particular connection. This can mean changing from one IMSI on one mobile network to another IMSI on another – in other words, a network swap similar in effect to an eUICC. In order to make that swap, at least two IMSIs need to be present on the SIM. Typically there is space on a SIM for several and some systems offer the facility to remotely download a new IMSI.   
Within a network profile are many IMSIs and a Multi IMSI approach provides the facility to change the IMSI that is active on a particular connection.
A key difference between the two approaches is that there are no standards for Multi IMSI – it is essentially proprietary. For eUICC there are both proprietary and standard – in the form of conforming to the GSMA Specification. It is worth noting that the GSMA is not in fact a standards-making body and does not profess to be, in the way that, for example, ETSI is. However, it saw a real need to develop a standard for eSIM to aid market development for mobile networks, particularly in the IoT space.
    
This development is being brought to market by a variety of market players, some new to the market and others who have helped to shape it over many years. In the latter camp is KORE, now a global IoT solutions provider with a long history of offering connectivity for M2M and IoT solutions. KORE 
in particular is working on the transition from Multi IMSI to eUICC and the GSMA version of eSIM with a particular principle in mind – what will create a rising tide that lifts all boats in the IoT market. With that in mind, proprietary is a retrograde step with true market development coming from aiding introductionof a standard as quickly as possible – even if that takes a little longer. The company has long experience of working closely with network operators and the GSMA and also with providing multi-IMSI, having been one of the pioneers introducing that to the IoT market.

Their view of this transition is therefore instructive and reflects their long experience in this market. For KORE, proprietary eSIM solutions do not provide a sufficiently significant step forward compared with multi-IMSI so the GSMA Specification of eSIM, which is still evolving, is their preferred approach. In addition, they argue that both multi-IMSI and eSIM are relevant for the future – they intend to continue offering both to suit different customer needs. Certainly, there is a real need for the market not to get sidetracked into proprietary versions of eSIM, of which there are several. Beecham Research created a GSMA paper explaining the issues of proprietary versions of eSIM, which can be viewed at this link:
http://www.beechamresearch.com/download.aspx?id=39.
This is also available on the GSMA site. 

A further key issue with all of these solutions is mobile operator acceptance. Whether it is a network swap (eSIM) or IMSI swap (multi-IMSI), they can only be achieved with the consent of the network operators whose network profiles/IMSIs are involved. As often portrayed, eSIM is being introduced in the teeth of opposition from mobile operators and that they are doing all they can to slow it down. But is this really the case? Clearly, eSIM provides a much more streamlined and cost-effective method for provisioning mobile connectivity in a secure way. It lends itself to very large volume deployments in ways that traditional SIM cards could never hope to emulate. As a result, it is a certainty that introducing eSIM will substantially increase the number of connected devices on mobile networks at a much faster rate than in the past over time.


Figure 2: eUICC + Multi-IMSI Projected Growth.

Of course, with this huge potential upside comes more risk. At contract renewal, the owner of a large number of connected devices gains the opportunity to switch mobile operator if they can secure a better deal with another one. In other words, so long as the eSIM technology and commercial undertakings – the willingness to share network profiles – operate as intended, the owner is no longer effectively locked in to their original choice of operator for the life of those devices in the field. The negotiation has a much greater chance of being a proper negotiation, which in turn means greater focus on issues other than just the cost of the connectivity – coverage, for example, and technical support. That way leads to real market development.  

What is really of concern to operators is increasing the risk without the reward of much higher volumes. So, which comes first – opening up to greater risk or gaining the much higher volumes? Operators are trying to secure the second before accepting the first, because the other way round is clearly commercially unattractive. Essentially, that suggests the market for eSIM will take off initially through a series of large volume deals, rather than lots of small ones. That being the case, the continued requirement for Multi IMSI is evident.
Article originally featured in IoT Now magazine, Issue 2, Q2 2018 Volume 8, for further insights access the full edition here. 

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