With eSIMs set to disrupt the industry, telcos must dream up new ways of creating customer loyalty

Author BIOPublished 3 Min Read

In a few years' time, SIM trays won't exist. There will be no more ceremonious unbending of a paperclip, winkling it into your mobile, popping the tray and then prising out the little plastic SIM, trying not to drop it down the back of the sofa in the process. Instead a lone eSIM will be permanently embedded into your device, freeing up valuable real estate for extra battery and storage space, or just allowing for a slimmer phone. Suddenly changing your provider will be simple because rather than having to wrestle with the SIM, not to mention phone up to get a mysterious PAC number, you can switch remotely, perhaps by scanning a QR code to add a particular plan and then choosing it in your settings.

For customers this is progress: a genuine improvement in the customer experience. Though you'll only be able to use one plan at a time, you'll be able to store more than one plan on your phone. So, you can easily switch whenever you want - for instance if you're going on holiday and want to temporarily move to a different provider with cheaper rates for your destination. You'll also be able to have two different phone numbers on the same device, so no longer will you need to have a 'work phone' as well as your normal one if you don't want to, and again, if you’re going away, you can get yourself a local number to bring down the costs of your calls. When it's so easy to switch it's almost inevitable that telcos will find themselves embroiled in a permanent price war, with customers moving about to take advantage of the best promotions.

So is it all bad news for telcos? Well it's clear why the industry has taken its time on eSIMs, even though the technology has been around for a while. Customers are already moving away from long-term contracts that lock them into one provider for two years or so. When eSIMs go mainstream, telcos will have no choice but to create plans that allow customers to be more nimble, or they will find new players coming in to give customers what they want. There will be added competition from device manufacturers who have new opportunities to own the customer relationship. And given how easy it will be for customers to move around, telcos are also likely to see declining profits from international roaming and may have to slash charges to win new customers or keep current ones.

eSIMS could also lead to fundamental changes in the way telcos operate. If customers don't need a new SIM, one of the fundamental reasons for visiting a store will no longer exist. Long term it could lead to the physical stores disappearing entirely, which on the one hand means losing an important customer touchpoint but on the other will reduce operating costs. With less or no face-to-face contact with the customer, telcos will need to work even harder on their digital experience, providing innovative services and ensuring that every interaction a customer has is as seamless, satisfying and memorable as possible. In this way eSIMs could also pave the way for telcos to become truly global, doing away for the need of local suppliers and becoming a digital provider with no physical presence but with customers who feel close to the brand in a way that telcos at the moment could only dream of.

There are also big opportunities for telcos in terms of wearable devices as well as tablets and laptops. Uptake of wearables may well increase when it's easy to have several devices on one dataplan, while customers are also likely to move away from wi-fi-only tablets towards those with data roaming capabilities which they use cheaply and easily when they travel. Finally, there’s a positive environmental aspect to eSIMs. Just one eSIM card means telecoms can reduce their use of plastic, save money and resources. Unlike today there won't be thousands of wasted SIMS ending up in landfill - a common problem because of expiry dates and brand changes.

eSIMs can't be stopped so telcos must see rise to the challenge they present. Those who prevaricate and don’t do enough to address the changing market are likely to find themselves in trouble as the ground shifts around them. New strategies, new business models and new revenue streams are needed. It's going to be fascinating to see how the industry changes in the next few years.
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