The Connectivity Bottleneck: Challenge & Opportunity for the IoT Industry

The implementation of 5G is sparking a surge in IoT device connection. This then requires network authentication, primarily through SIM technology, which is currently undergoing the transition from physical SIM cards to digital eSIMs.  

However, many parts of the SIM industry have shown themselves to be unprepared to meet demand, particularly from the IoT market. Forecasters and experts have warned of an ‘eSIM crunch’ providing both a challenge and opportunity to enterprises, IoT platform providers, and device manufacturers. 

Market fragmentation  

The IoT market is fragmented, with devices communicating over a lot of various networks and protocols, including everything from Ethernet and Wi-Fi to Bluetooth and Zigbee. While Wi-Fi is prevalent, it has limitations, particularly for industrial use. This has led to increased investment in cellular private networks and remote IoT devices, driving the demand for 5G connectivity and, consequently, compatible SIMs. 

Carriers face challenges due to the diverse cellular volumes and frequencies of IoT devices. High-volume data plans for devices like security cameras generate substantial revenue, while low-volume data transmissions from devices like smart meters yield minimal returns. This encourages carriers to prioritize major cellular users over smaller ones. 

eSIM automation 

The eSIM market faces a challenge where a relatively limited group of specialist companies serve the generation and deployment of eSIMs. The process can be time-consuming, especially as business might have to do due-diligence research on multiple local providers, which creates bottlenecks. 

IoT companies often require relatively small quantities of dedicated eSIMs, which do not align with the business models and process requirements of many SIM vendors. This results in long lead times and premium prices for eSIMs, delaying product launches and potentially hindering the growth of the IoT market. 

Solving the crunch 

One solution gaining popularity is in reimagining the SIM creation process through automation, empowering network operators, enterprises, and IoT platform providers to develop, manage, and orchestrate their own eSIMs according to their specific needs. 

Additionally, the current process of producing eSIMs involves multiple steps in various geographic locations, raising concerns about data sovereignty. By automating and localizing the process, these concerns can be addressed. By automating eSIM generation, reducing costs, and ensuring on-demand availability, the IoT market can overcome the eSIM crunch and unlock its full potential. This approach could not only benefit large-scale deployments but also empower smaller players, fostering innovation and growth across the entire IoT ecosystem. 

1GLOBAL & IOT

1GLOBAL are trailblazers of eSIM technology automation and have provided hyper scalable solutions for local businesses and multinational enterprise alike. To find out more about getting your business the right eSIM solution that can agilely respond to your needs and strategy, get in contact with us here.