The reluctance of MNOs to embrace the technology (seeing the classical equation that lower barriers to switch = higher churn) created space in the market for others to enter - like eSIM-based IoT MVNOs and OTT platform providers - even if the reach of these solutions has been limited under the m2m standard. The new standard will simplify and accelerate the build-out of these solutions (although there is no backward-compatibility with the m2m standard) as there is no need for discrete integrations in order to expand the providers to a particular ecosystem.
MNOs who already have consumer eSIM solutions deployed can re-use their SM-DP+ for the new standard, and easily participate passively in the ecosystem by providing profiles, but who is going to take hold of the ecosystem orchestration role?
The eSIM in the new standard effectively provides the orchestration entry point for this capability but the upstream interface is not standardized (unlike in the m2m standard) and at this stage is not subject to GSMA SAS security certification. So there is some expectation that this is also opening the door for new innovative players to enter the market here.
Let’s have a look at some of the main groups here and what the introduction of this technology may mean for them.
What does this mean for IoT module and chipset manufacturers?
The big difference here for them is in the iSIM evolution, as the traditional supply chain will be disrupted. In SGP.32 the RSP orchestration is the same for both eSIM and iSIM.
With iSIM, no longer will SIM card manufacturers be creating and shipping SIM hardware - instead they will look to install their SIM SW IP onto the IoT module SoCs. Several partnerships on iSIM have been announced reflecting this. The facilities of these SoC manufacturers also need to consider GSMA security certification requirements.
As many IoT devices will require some sort of bootstrap connectivity, the bundling of connectivity together with the module and similar servitization approaches are starting to be seen. As these chipset providers are generally present early in the IoT solution design phase, there is an opportunity to provide an all-in-one package to simplify what is generally a complex and fragmented supply chain journey for many enterprises.
So what does this mean for eSIM service providers?
With the release of the new standard, but without the possibility of having commercially released compliant solutions likely until 2025, we are in a bit of deployment limbo at the moment.
We are seeing eSIM service providers scaling back investments in m2m infrastructure, and starting to pivot towards the pre-commercial solutions on SGP.32. Some of these solutions leverage the consumer SM-DP+ with customisation on top of the existing LPA on the eSIM to simulate the IPAe function in the new spec.
None of these solutions can yet claim full compliance (as the specification for compliance is not drafted yet), but can claim an upgrade path towards compliance when the spec is ready.
In any case, the time to prepare is now.
We know what use cases are covered in the new specification and can conceptualize how the orchestration flows from your management platform will need to be implemented.
It's a significant change particularly from m2m, so updating your SGP.02 compliant flows to the new standard won’t be trivial, even just to get the same basic use cases implemented (e.g. the new standard inherits the concept of activation codes from the consumer standard).
And you will likely need to support both m2m and IoT standards in parallel if you have a significant existing user base, or start discussions with your customers about migration possibilities.
What about enterprises looking to deploy IoT solutions with eSIM?
It’s a tricky time if you’re looking at eSIM for your IoT deployment, as we’re in this aforementioned transition period. You don’t want to deploy on a standard that will be superseded, but that would be your only option if you want a commercially deployed fully GSMA-compliant solution within the next year and a half or so.
Particularly if you’re starting out with a greenfield deployment, it’s best to start out on the right track and prepare early. Given the generally quite long lead times to get an IoT solution to market (in many cases >2 years), you should consider looking for a trustworthy partner who can offer pre-SGP.32 solutions (with a full compliance upgrade path) and provide eSIMs for testing and verification activities during 2024 with a view to commercial volumes for deployment in early 2025. Most of these providers can also give advice on the iSIM partners they are working with and what the roadmaps look like for the commercialization of these product lines.
Thinking beyond SGP.32 …
eSIM is a great technology and there are lots of expectations, particularly on the new standard and what opportunities (and potential disruptions to the industry) it can bring. But it’s not a silver bullet, and I actually quite like the vision of what it could be as described in this article by a former colleague of mine in Ericsson IoT.
Advanced dynamic orchestration of connectivity across networks globally based upon network performance and capacity - if such a vision is to be realized it is clear there is much more evolution possible past the current iteration of SGP.32 and in how the industry could orientate itself around it!
