How eSIM Technology is Pushing the Boundaries of Telco Connectivity (Part I)

In 2012, the eSIM, or “embedded SIM,” made its debut on factory floors, ports, warehouses, and in fleets of connected industrial devices around the world. Initially developed for the Internet of Things (IoT) industry, the eSIM was designed as a software-based replacement for physical plastic SIM cards.

Why was eSIM developed?

SIM cards must be manually inserted and removed. In an eSIM, all SIM data is instead digitally transmitted and downloaded to a dedicated microchip embedded within the body of the device. eSIM profiles can be instantly and remotely distributed to devices around the world, monitored from a centralized platform, and allow for the storage of multiple digital SIM profiles on a single device.

For industrial and commercial purposes, the advantages of eSIM technology soon became clear: many IoT devices operate in inaccessible locations or extreme environments, where the manual insertion, maintenance, and replacement of individual SIM cards posed a barrier to progress. By using eSIMs instead, IoT managers could obtain real-time oversight of every device’s data usage from a single program, and switch between SIM profiles (for example, between two network operators with differing coverage areas) in seconds.

Despite its popularity, eSIM is still an emerging technology. New usages are still being discovered, and the telco sector is continually adapting to the format's versatility, convenience, and flexibility. Here, we explore how eSIMs have already shaped telecoms, how major players are exploring new eSIM use cases, and how eSIMs will continue to determine the future of the industry.

eSIMs go mainstream: the public push for eSIM adoption

It wasn’t long before the potential applications of eSIM were realized by consumer mobile operators and private mobile device manufacturers: in 2019, the first consumer-grade eSIMs appeared on new smartphone models. Traditional network operators like Verizon and Vodafone soon launched their own eSIM mobile plans. 2022 saw the release of the eSIM-only iPhone 14 in North America, which confirmed the consumer mobile industry’s commitment to the new technology and positioned eSIM compatibility as a key feature of new flagship smartphones.

Rising public awareness of the benefits of eSIM and the relative drawbacks of physical SIM has led to an industry-wide push for new eSIM-ready devices, providers, and operators. In the consumer mobile space alone, smartphones account for over half of all eSIM-enabled devices, with even faster potential for growth in the IoT and enterprise connectivity sectors. And, while eSIM usage continues to rise, increased public awareness is key to accelerating mass adoption.

Breaking free from the plastic SIM

1. eSIM advantages: the environment

SIM cards, despite being an over 30-year-old technology, are still the most popular SIM format in mobile phones worldwide, but only just. In the rapidly evolving mobile market, many components are obsolete after five years, let alone 35. The eSIM is set to change this. By 2030, eSIMs are expected to account for the majority of worldwide smartphone connections.

Growing environmental concerns about the mobile industry have contributed to this transition. With the number of connected devices worldwide set to skyrocket over the next five years, the industry needs to implement sustainable policies and pivot swiftly to carbon-neutral, ethical, and sustainable alternatives to manufacturing procurement, transportation, and logistics. While SIM cards are a relatively small component of a new device, their complex material composition and packaging mean they are a major contributor to plastic and electronic waste.

In one stroke, the pivot towards eSIM eliminates the emissions associated with the manufacture and transport of SIM cards, as well as plastic and metallic waste. While this is only a partial solution, it’s an essential step to ensuring a sustainable mobile industry.

Though the extent of the environmental benefits generated by an industry-wide transition to eSIM will only reveal itself over time, there are several immediately apparent advantages to eSIM adoption.

2. eSIM advantages: smartphone users

Much of the shift towards eSIM is driven by two key factors: 

• A consumer-side demand for the convenience and ease of eSIMs.

• A device-manufacturer-led push for a SIM format that doesn’t require a bulky interior SIM tray or space for a card. 

For customers, an eSIM offers a solution to many of the drawbacks of SIM cards that have been increasingly exposed over the past three decades. An eSIM profile can be instantly downloaded at any time, and used in seconds. Users can store SIMs from multiple providers on a single device and choose new ones almost instantly. For example, a traveler could switch between two different country SIM profiles in a matter of a few taps, while retaining all information stored on their regular SIM, including contacts, media, and two-factor authentication access. As consumer awareness grows, so does interest: a 2024 survey by the GSMA found that the majority of US SIM card users expressed an interest in using eSIM instead.

3. eSIM advantages: device manufacturers

Mounting pressure for eSIM adoption has also come from manufacturers. While operators are continuing to explore new customer dynamics in response to the market shift, manufacturers enjoy immediate revenue advantages from eSIM-only devices.

The smartphone market has never been more competitive. In 2012, the year the eSIM was launched, Samsung claimed over a third of the global smartphone market. Despite selling far more handsets overall in 2024, they now only occupy around 20% of the market. In the last decade, brands like Xiaomi, Oppo, OnePlus, and vivo have become major new faces in the smartphone industry. Manufacturers need every advantage they can to stand out in such a crowded field.

Doing away with a dedicated SIM tray and SIM card slot frees up space for new features: sharper cameras, faster processors, stronger weatherproofing, and larger batteries all require increased internal space. The current trend for ever-slimmer flagship phones (typified by the rumoured new iPhone 17 Air) is ideally suited to eSIM-only hardware.

Outside of smartphones, eSIMs have facilitated the rise in wearable tech. Hardware real estate is even more of a premium in smaller devices like smartwatches or fitness trackers, while developments in battery life, processing power, and screen resolution have enabled smartwatches to evolve from phone accessories to standalone cellular devices, able to access the internet and make calls.

4. eSIM advantages: enterprise and IoT

Having introduced eSIM usage seven years before the consumer space, the new SIM format is now an established part of worldwide IoT infrastructure. The remote management and installation capabilities of eSIM, and in particular the ease of switching between networks to ensure consistent worldwide connectivity, avoid downtime, and mitigate the risk of local network outages, are highly beneficial to multinational IoT businesses.

This same remote management capability makes eSIMs a key element of the booming automotive and connected car market, where they can deliver real-time, reliable connectivity for devices that cover a large area. The number of connected devices is set to grow exponentially, with the IoT market valuation projected to top $1.5 trillion by 2028. An easily installed, managed, and monitored alternative to SIM cards has become a requirement for a viable IoT industry. Implementing eSIM allowed the industry to flourish: now, it’s essential to maintaining viability.

Like the launch of the iPhone or the first 3G networks, the transition from physical SIMs to eSIM marks a tipping point in the telecommunications world. The growing number of uses for eSIM tech, and how mobile operators, device manufacturers, and the public respond to these changes, will define the next years of IoT and personal mobile communications. In Part II, we delve deeper into the changing operator-customer dynamics that eSIMs have created and explore the range of ways in which telco companies are using eSIMs to draw new customers and retain current ones.  

1GLOBAL eSIM services 

To capitalize on the eSIM revolution and deliver scalable, regulated growth, operators and IoT businesses require a partner with a deep level of industry knowledge and proven success implementing eSIM services. 

1GLOBAL is a digital-first telco and eSIM pioneer that has distributed over 50 million eSIM profiles worldwide. We’ve helped a wide range of clients, from MNOs to financial institutions and global enterprises, prepare for their digital future. Find out how your business can integrate 1GLOBAL eSIM solutions by speaking to our team today.