I personally have been writing about eSIM technology since 2013. At that time I hinted at the possibility of a device “that could surf from one service provider to another with the click of a button.”
Well, it’s 2018 and we’re not there yet. But we’re certainly a lot closer.
Why? I’ll get there, but first let me go over what has happened in the eSIM space during the past decade: In 2011, the GSMA started developing a standard for eSIMs in the IoT and M2M space. This was pretty important because lots of IoT devices don’t have space for a physical SIM card and because sometimes it’s too complex for an IoT service provider to physically install a SIM card into every single device that needs one.
For example, if you ordered 1,000 wireless water monitors for a U.S. utility company from a Chinese manufacturer, you would have to physically put a SIM card into every single one of those water monitors if you didn’t have eSIM technology.
Now though, thanks to the GSMA’s eSIM specification for M2M services, you can just remotely push wireless service onto those water monitors as soon as they arrive in the country.
eSIM in consumer products
Now, 2015 is where things started to get interesting in eSIM. That’s when the GSMA developed an eSIM specification for consumer devices. Instead of “pushing” service from a carrier like AT&T onto an eSIM, the consumer version of the GSMA’s eSIM technology allowed users themselves to “pull” service to their device from whatever provider they want.
OK, stick with me because here’s where it gets a bit complicated: The GSMA’s consumer eSIM specification requires three important elements: the SM-DP+ (Subscription Manager - Data Preparation +), the LPA (Local Profile Assistant) and the eUICC (basically the silicon inside a device that stores SIM info).
Carriers need to deploy the SM-DP+ into their networks in order to support eSIM devices, and device makers like Apple and Samsung need to put the LPA and the eUICC into their devices in order to support eSIM services—and those two things also need to be able to talk to each other. The LPA is particularly important because it’s the actual user interface that regular customers will see when they use eSIM technologies.
So what does this all mean? It means that the Samsung Gear S2 smartwatch in 2016 was the first GSMA-compliant consumer product to use eSIM technology. That’s not really a surprise considering watches don’t really have the space for a physical SIM card, even those tiny little nano SIM cards.
But the Gear S2 isn’t alone. Apple’s iPad and Watch soon joined the ranks of eSIM-capable wearables, and Microsoft’s Surface laptop also embraced the technology. And then the first eSIM-compatible smartphone, Google’s Pixel 2, hit the market in 2017. (Perhaps not surprisingly, Google’s Project Fi MVNO—which provides service across T-Mobile, Sprint and U.S. Cellular—also supports eSIMs.)
eSIMs in smartphones is where things start to get really exciting. As clearly laid out by the GSMA, the consumer version of the association's eSIM standard allows customers to easily switch from one wireless network service provider to another.
The main way to do this is through QR codes: Basically you sign up for service from a particular operator and they send you a QR code, which takes you to the LPA on your phone, which then communicates with the SM-DP+ operated by the carrier you want service from, and then that carrier sends you a subscription for its service that you put onto the eUICC on your phone.
At least, that’s what’s happening technically. From a user standpoint, you would be able to just scan a QR code to switch from AT&T to Verizon, or vice versa, instead of having to physically swap out one SIM card for another.
At least, that’s the promise of eSIM. But that’s not what’s happening with today’s eSIM gadgets in the United States. At least, not yet.
Apple’s eSIM movements
Almost 10 years after The Sunday Telegraph reported that the world's wireless carriers shot down Apple's plans to create a virtual SIM that would allow wireless customers to pick their service provider after they purchased their iPhone, Apple installed eSIM technology into its newest iPhones. And this week, the company released iOS 12.1 to activate eSIM technology in its new phones.
But there are some big caveats to Apple’s actions. First, Apple is not positioning eSIM technology like the GSMA is, as a way to easily switch carriers. Instead, Apple is selling eSIM as a way to maintain two different phone numbers on the same device—the so-called dual-SIM setup. Specifically, users can maintain one number on a physical SIM card and a separate number, potentially from a separate operator, on the gadget’s eSIM. This, according to Apple, allows you to use one number for business and another number for personal calls, or to add a local data plan when you travel, or to have separate voice and data plans.
But a bigger caveat is that not all U.S. carriers are supporting eSIM, at least initially. Here’s where each carrier currently sits in terms of iPhone eSIM support:
Verizon:
“Wireless customers will be able to activate Verizon service eSIMs as soon as we’re confident you’ll be able to have the great, high-quality service you expect from us on both your primary and secondary line,” Verizon said in a statement. “If you are a Verizon customer and you activate another carrier's service on your iPhone's eSIM, your Verizon service will be degraded due to the current software configuration. Based on our discussions with Apple, we believe these concerns will be resolved quickly and you should be able to add our great Verizon service on your secondary line before the end of the year.”
Continued Verizon: “Until the secondary line can deliver Verizon's full suite of voice and high-speed data services, we won’t activate Verizon service on any eSIM. This includes our own customers’ iPhones with dual SIM capabilities as well as iPhones on competitors’ networks.”
As PCMag explained, at issue is the fact that iPhone service kicks over to Verizon’s CDMA network when a physical Verizon SIM is pushed into the "secondary" position on the phone. Verizon said 30% of its cell sites no longer support CDMA, thus creating a coverage problem.
AT&T:
The carrier said it’s working with Apple to support eSIM, and would share more details as it gets closer to launching eSIM support.
MacRumors reported that AT&T is telling customers that eSIM activations are being delayed until later this year due to technical issues in part related to Apple’s Visual Voicemail service.
T-Mobile:
T-Mobile told PCMag that it's working on eSIM support and that it'll be available "when its software is ready."
Sprint:
Sprint wasn’t among the carriers listed by Apple in September as supporting eSIM, but a company representative said that “we’re in the process of working with Apple to be able to offer it in the future to our customers.”
U.S. Cellular:
"We are working with Apple to assess eSIM functionality for future implementation at U.S. Cellular, so we don’t have details at this point," a spokesperson said.
Part of the problem, according to Gemalto's Yeshwant Chauhan, is testing and interoperability. “If an OEM is going to launch an eSIM device, they have to work with a carrier to launch an LPA,” he said. “Total testing has to take place.”
“This is where the challenge is today,” he continued. “The carrier is very concerned about the user experience.”
Chauhan, SVP of mobile services and IoT at Gemalto, is worth listening to. After all, SIM vendor Gemalto just this week announced it has deployed more than 100 eSIM remote subscription management platforms to mobile operators, operator alliances, MVNOs, car manufacturers and OEMs across all continents.
“I think we have been leading this space,” Chauhan said of Gemalto. “We are well engaged with all these players right now.”
So what does Chauhan expect from the eSIM trend?
“We see an element of caution … There are a lot of backend things that have to be put in place,” he said, explaining that carriers don’t want customers to get angry with untested implementations that could result in customers losing service or even a phone number.
Nonetheless, Chauhan said, “there is excitement about new technology,” noting that some providers are hoping widespread use of eSIM technology will help them peel off customers from the nation’s bigger wireless providers.
Growing noise around eSIM
Indeed, other companies have already been eyeing the eSIM potential. For example, regional wireless provider C Spire recently inked a major agreement with Microsoft to use embedded SIM technology in smartphones and tablets for companies and businesses.
In a release about the announcement, C Spire noted that “eSIM offers a streamlined user experience for managing cellular connectivity for enterprises, enabling IT teams to provision, deploy and manage cellular connectivity through mobile device management. This is especially important to companies like C Spire, which operates the nation's largest privately-owned mobile communications unit.”
Other smaller wireless operators are equally interested in eSIM.
Similarly, the CEO of Charter—a cable company that recently entered the wireless industry with its Spectrum Mobile MVNO—cited eSIM as an opportunity to more easily move traffic onto its own planned wireless network.
“There are new technologies coming along with dual sim and eSIMs in mobile devices, which will allow somebody with an MVNO like us to actually run their own network and an MVNO simultaneously on the same device, which is an interesting thought as you go forward in terms of what you could do and how you could manage traffic and how you could do that efficiently,” Charter’s Tom Rutledge said last week during the company’s quarterly conference call with investors.
And Elliot Noss, the CEO of MVNO Ting Mobile, described SIM cards as “the floppy disk of the phone world” and said that “it’s time to let them go.”
Added Michael Goldstein, VP at Ting: “The real benefit with eSIM goes way beyond traveling without a paperclip in your wallet. Mobile users will have unprecedented freedom to choose between services and networks. Plus, devices will have the intelligence to automatically and seamlessly switch us to the network, either mobile or Wi-Fi, that offers the best performance and value at any moment in any location.”
Already international roaming company Truphone released an iOS app to sell international service plans—including U.S. service—via eSIM on the iPhone.
No wonder reports earlier this year indicated the U.S. Department of Justice is conducting an antitrust investigation into the nation's four largest wireless carriers, with a focus on AT&T and Verizon as well as the GSMA, about possible collusion over eSIM technology. Specifically, the agency is reportedly looking at whether the companies worked together to prevent broad adoption of the technology, which would allow customers to more easily switch carriers.
In conclusion
All that said, eSIM isn’t magic. After all, customers can already switch their phone from one provider to another with a paperclip, a SIM card and a few YouTube tutorials. Further, a large number of wireless customers are essentially stuck with their current wireless provider as they pay off their phone in monthly increments—payments that could stretch across three years considering some phones today cost $1,000 or more. And, due to the various spectrum bands used by that nation’s wireless operators, moving a phone from one provider to another might actually be impossible, or at least ill-advised.
Nevertheless, a fully functioning eSIM ecosystem in the United States—where customers could simply look at their phone to see which carrier offers the best coverage and prices in their location at that particular time—could represent a serious disruption to the status quo. I suspect that’s where Google, Apple, Charter and other eSIM proponents are headed. — Mike | @mikeddano
"Editor's Corners" are opinion columns written by a member of the Fierce editorial team. They are edited for balance and accuracy.