In Business Model, Internet Access, Mobile, News

It always is possible to argue that “service-provider-agnostic” subscriber identity modules (SIMs) are a  good thing–or a bad thing–for various participants within the internet ecosystem. An e-SIM essentially is an “open” (remotely provisioned) module that allows a consumer to register an e-SIM device to any mobile service provider in a market. Instead of being issued a SIM by the service provider a customer wants to use, the user can select any compatible service provider. As you would guess, mobile service providers often dislike the concept, as it tends to further reduce them to “dumb pipe” providers. 

A few years ago, mobile service providers generally considered such “open” SIMs a bad thing, while Apple and other device suppliers generally considered them a good thing. Consumer advocates might have considered e-SIMs a good thing. App providers might generally have taken the same view.

The initial reaction by mobile service providers was that “ownership and control over SIM cards” was a source of business advantage. After some reflection, that attitude could be changing, in part because the e-SIM approach makes lots of sense for the Internet of Things and machine-to-machine services business model.

In other words, remote activation of mass-market-sourced or business-to-business IoT devices helps mobile operators more effectively and efficiently supply services to such devices. That helps the business model, as it reduces cost.

There arguably is less enthusiasm about e-SIMs for smartphones, since in that segment of the market there is potential disintermediation of primary subscriber relationships. Put another way, it is one more step towards shifting value away from the “access” provider and to the “device” supplier.

For that reason, it might be viewed as one more shift of the access provider role to “dumb pipe” services.

Still, a more positive attitude is likely directly a result of perceived upside of e-SIM approaches for IoT and M2M, if some ambivalence remains about use of e-SIMs for smartphones.

In 2011, Apple was granted a U.S. patent to create a mobile-virtual-network-operator (MVNO) platform that would allow mobile service providers to place bids for the right to provide their network services to Apple, which would then pass those offers on to iPhone customers.

Three years later, in 2014, Apple released its own SIM card—the Apple SIM. Installed in iPad Air 2 and iPad Mini 3 tablets in the United Kingdom and the United States. The new Apple SIM allowed customers to select a network operator dynamically, directly from the device.

At least in principle, stakeholders are going to continue to wrangle over the implications for “customer experience and account “control.”  Though such electronic subscriber identity modules might first become mass market features to support machine-to-machine or other Internet of Things devices and sensors, service providers have yet to embrace the same approach for smartphones.

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