eSIM set to be next mobile industry disruptor

Recent studies have shown that embedded subscriber identity module (eSIM) acceptance is taking off, and now research from CCS Insight has highlighted eSIM as a technology on the cusp of bringing about indelible changes to the way users connect with mobile providers and manage their cellular subscriptions.

The research for CCS Insight’s Spotlight report was conducted in March 2024 in the UK, the US, Germany, Spain and Australia. The sample was a minimum of 1,000 respondents in each market and was nationally representative in each by age, gender and region.

It found that even though it represents a tiny fraction of total global mobile subscribers – at only 150 million compared with 8.9 billion cellular subscriptions worldwide – the eSIM ecosystem is already well developed and adoption surged more than 150% in 2023. In addition, 800 operators support the technology and there are more than 200 eSIM-enabled devices.

The report emphasised that the catalyst for growth was the arrival of the first eSIM-only iPhone for the US market in 2022, which highlighted the vast potential for the use of eSIM in smartphones. It said the research had discovered a technology on the cusp of bringing about “indelible changes” to the way people connect with mobile providers and manage their cellular subscriptions.

The report revealed that until recently, many telecoms operators were unwilling to support eSIM in smartphones, fearful of conceding relevance to big tech rivals, encouraging new competition and losing roaming revenue. Yet CCS Insight believes the likely disruption is pushing other operators to offer the same technology, leaving many little option but to embrace it.

The report predicts that the proportion of global smartphone sales with support for eSIM will jump from over a quarter (27%) to over half (56%) from 2023 to 2028. In absolute terms, this means the number of compatible mobile phones will more than double from one billion at the end of 2023 to 2.5 billion in 2028.

On a regional basis, North America is leading the charge on eSIM adoption, representing more than half of all global eSIM users, driven by Apple’s strong push. CCS noted that the region already hosts more than half of all global eSIM users, with 50 different providers supporting the technology. It added that going forward, industry eyes will focus on whether Android manufacturers will accelerate their efforts to close the gap. This includes leading Chinese brands, which have so far only introduced eSIM on a limited number of international models because of regulations barring the technology in their home market.

One of the growing uses for eSIM assessed in the report is international roaming. Analysis shows that specialist providers have entered the market in recent years, offering more convenient and affordable options to access mobile data when travelling. The report charts strong growth in the number of roaming eSIMs set to be provisioned over the next few years, after eSIM roaming doubled in 2023. CCS Insight’s own consumer research had shown one in 10 people in five leading markets have already used an eSIM for roaming. Of those yet to do so, more than 60% said they would consider taking an eSIM for roaming in the future.

Looking at interest and awareness of eSIM, the research found two-fifths of respondents had heard of eSIM. When the concept was explained, over three-quarters said they would be interested in eSIM. However, some of the main benefits were not fully understood. This said, CCS Insight highlighted a major challenge for the industry. It advised that as momentum for eSIM gathers pace, focus should increasingly turn to support people embarking on new customer journeys, particularly those who are less confident using new technology.

“We found a shift in sentiment among operators to be more accepting of the technology and increasingly optimistic about new opportunities it can enable,” commented CCS Insight director of consumer and connectivity Kester Mann. “These include supporting more digital customer journeys, attracting new customers, improving environmental credentials and achieving major cost savings, estimated by the research to total more than $3bn in the industry by 2028.”