Analysts say China Slowing Adoption of eSIMs in India  

Despite all their advantages for consumers, and being the world’s fastest-growing IoT market, the availability of embedded SIM technology (eSIM) for smartphones in India still lags behind other regions. Analysts have suggested that one of the key reasons for this delay is due to a shared device market with China.   

The eSIM advantage 

In most markets, the advantages offered by eSIM technology has already made it the cornerstone of connectivity. The majority of international smartphone brands, notably Apple and Google as well as IoT device manufacturers, have been more than happy to migrate from physical to embedded SIMS. The key reasons for this have been…  

Consumer convenience 

For consumers, eSIMs enhance convenience by allowing them to transition between carriers without messing around with a physical SIM card. This streamlined process notably simplifies international travel, as users gain the capability to effortlessly connect with local carriers. 

Professional connectivity  

For the Internet of Things (IoT), eSIMs present a particularly advantageous solution. They facilitate seamless connectivity for a multitude of devices, ranging from smartwatches to industrial sensors, and enable easy over-the-air connectivity management and carrier switching for whole product lines. 

Manufacturer design upgrade 

Phone manufacturers and device makers are actively promoting eSIM adoption due to its ability to streamline the design and manufacturing process. The elimination of the SIM card slot allows for the development of devices that are both more compact, resistant to environmental hazards, and can be deployed for longer without maintenance.  

Indian market challenges 

Despite all of these advantages, adoption of the technology in the Indian consumer market has been slow. Analysts have linked this to the peculiarities of the Chinese market, which is one of the very few to restrict the use of eSIMs. 

eSIM-Only future

International brands like Apple, Samsung and Pixel are by now offering eSIM compatibility across almost all their current-gen range. However, for manufacturers who focus on creating the most affordable products for BRIC regions there is a disincentive to design hardware that can’t also be easily shipped to the Chinese market. While adding eSIM compatibility might be great for consumers, it would disrupt the manufacturers economies of scale. 

As of December 2023, Counterpoint Research estimates only about 10% of all smartphones sold in India supported eSIMs, with that figure climbing to 20% over the next five years, assuming that conditions remain the same. For comparison, the American market already has 70% eSIM adoption.  

Slow, but inevitable

Cost is by far the biggest influence on purchasing decisions in the Indian consumer market, and the sustained demand for cheaper connectivity is likely to drive adoption slowly but surely. The transition to eSIMs will generate substantial overhead cost savings for telco players in sectors such as manufacturing, supply chain, distribution, and mobile number portability. These saving should eventually be passed along to the consumer, but progress will remain slow while regulations remain incompatible in BRICS markets.