INDUSTRY SURVEY 2025
eSIM
2024 was a big year for the eSIM. On June 27, the GSMA published SGP.32 v1.2 – the stable version of the new eSIM for IoT Technical Specification. This was a significant moment – coming almost exactly 10 years after the first eSIM for IoT spec was launched.
SGP.32 v1.2 was warmly greeted by the industry. Why? Simply because it fixed the shortcomings of the original version. As we move into 2025, eSIM stakeholders believe SGP.32 could kickstart a new growth phase for the IoT.
To understand why, let’s revisit the history of the eSIM form factor, why it exists and what it’s achieved so far. The subscriber identity module (SIM) is, of course, the technology that identifies a subscriber and authenticates him/her to the network. Since being introduced in 1991, the plastic SIM card has changed form many times. The first product was almost as big as a credit card. The nano SIM, introduced in 2012, is just 8.8 mm wide.
But it was around this time that the mobile industry recognised the potential of its networks to connect not just people but also things. However, things (whether cars, industrial machines, remote sensors or smart meters) do not have an individual ‘owner’ or a user interface. As such, they demand a different type of connection.
So the GSMA introduced a new eSIM for M2M devices (2014). It embedded the secure element (the Embedded Universal Integrated Circuit Card - or eUICC) into a card that could be soldered into place, rather than inserted manually.
This facilitated two important changes. It eliminated the need for physical SIM card swaps and it also supported over-the-air profile management, known as Remote SIM provisioning (RSP). Two years later, GSMA created an eSIM for Consumer devices. This accelerated the process of turning the physical SIM card into software.
We can summarise the benefits of the eSIM as follows:
- It is interoperable and reprogrammable. Customers can switch providers without the need to request, receive and insert a new SIM.
- It works well with machines and sensors, bringing in customers from new verticals
- It allows MNOs to connect a vast new cohort of consumer devices: wearables, watches, tablets.
- It eliminates the cost of manufacturing and distributing physical SIM cards
- It takes up less device space
- It is secure. Criminals cannot physically remove the SIM card
But on the flipside, eSIM also changed the dynamics of loyalty and churn, since customers can more easily switch providers. It also disrupted cost and distribution structures, as MNOs were compelled to migrate from distributing physical SIM cards to managing connections over the air.
It took some time for the consumer eSIM to go mainstream. But a tipping point of sorts has been reached. GSMA Intelligence estimates that there will be one billion eSIM smartphone connections this year. It estimates half of all smartphone connections will use eSIM by 2028.
Around 175 MNOs now offer commercial eSIM services for smartphones across 69 countries. Juniper Research forecasts the value of the eSIM market will increase from $4.7 billion in 2023 to $16.3 billion by 2027.
However, in the IoT space, there’s an acceptance that eSIM has underperformed. The existing M2M specification makes it difficult to switch profiles remotely. This is even more challenging when devices are limited in terms of bandwidth, UI or power.
Which brings us back to the new spec. SGP.32 addresses the challenges of IoT connectivity with zero-touch activation, remote deployment at scale, a standardised activation process and more. It has brought with it a new sense of optimism among industry stakeholders.
So, does the wider industry share this positivity? Is the change already having an impact? And which challenges remain? Find out in the following pages.
What percentage of their customer base is currently using eSIM?
Yes, eSIM is still a ‘minority’ tech. But it is certainly on an upward curve. Last year, our survey revealed that around half of all carriers have an eSIM user base of less than 10 per cent. Now it’s fallen to 36 per cent. Meanwhile, a respectable 22 percent has an eSIM base of 25 to 50 percent. However, only one in 50 respondents has a base exceeding 75 percent of subscribers.
How would you rate current consumer demand for eSIM in your market?
In line with the trend for more eSIM deployments, there’s also more interest in the form factor among consumers. Although 37 percent described demand as ‘neutral’, 45 per cent rate demand as ‘moderately or very high’. That’s eight points higher than last year. Just six percent described demand as very low.
When will eSIM overtake the physical SIM in mobile devices?
If software is ‘eating’ so many physical products in other areas of life, can we expect eSIM to eventually phase out the swappable form factor? The survey suggests we can. But how long will it take? 32 per cent of respondents estimate less than three years, while 49 percent cite three to five years. One in five think it will take more than five years.
What is the biggest challenge your organisation faces in adopting eSIM technology?
Are consumers ready for eSIM? Tricky question. It’s possible they could be, but the majority still don’t understand the tech. In our survey 44 per cent of respondents cite ‘lack of consumer awareness or understanding’ as the biggest challenge to adopting eSIM technology. This was around double the next biggest barrier, technical integration, at 21 per cent.
What impact will eSIM technology have on customer retention?
Could eSIM make it easier for subscribers to switch between carriers? Will it move the balance of power from MNOs to device makers and other OTT service providers? These are live fears. But our survey revealed a mostly positive feeling towards eSIM. 60 percent believe it will have a strong or moderate positive impact on consumer retention. Only 13 percent think it will be negative.
What impact will eSIMs have on roaming revenues?
A recent development in the eSIM space is the Travel eSIM. It offers flexible connectivity for travellers, eliminating the need to rely on traditional roaming services or buy local SIM cards in their target destination. So how will such products impact roaming revenues? Respondents on balance skewed positive. 60 percent believe eSIM will have a moderate or strongly positive impact on roaming, while just 15 think it will be negative.
This article first appeared as part of Mobile World Live’s Industry Survey 2025 Report, which surveyed 300 global industry respondents, on topics across eSIM, AI, Satellite and Cloud.