Do You Need eSIM?

What is an eSIM?

Fundamentally, a SIM card is a physical network security device (although it supports other applications as well, such as a contacts database). Encoded in SIM circuitry is a unique IMSI number (International Mobile Subscriber Identity) and its associated encryption key. These two bits of information are the credentials that allow you to use the carrier’s cellular network. You can think of them as the username and password that your phone uses to "login" to the Verizon, AT&T, T-Mobile, or other carrier's network.

That's why, when switching from one carrier to another, it is necessary to obtain a new SIM card issued by the new carrier and replace the old card with the new one. Likewise, if you get a new phone (or tablet, or other cellular-capable device) you have to either install a new card in it or move your existing card to it. This isn’t brain surgery but it can be challenging if your fingers are fat or unsteady. It also requires a paper clip or similar pointy object to remove the SIM tray.

As mentioned above, the size of SIM cards has steadily shrunk since SIM cards debuted in 1991, from the size of a credit card to today’s nano-SIM format, which is only one-half inch long by one-third of an inch wide. Now, eSIM tech shrinks the form factor even further and embeds all SIM circuitry in a mobile device’s motherboard. There is no removable card. The eSIM chip can be reprogrammed remotely, much like the firmware of a router or personal computer.

What Can You Can Do With eSIM?

The reduction in size makes it easier to fit more than one SIM inside the crowded case of a mobile device. Programmability enables effortless switching from one carrier to another. A number of intriguing applications and benefits become possible with eSIM.

• A single phone could have both business and personal lines, with separate contacts, text messages, call records, etc.

• You might use one line for voice and text and another for data, taking advantage of service plan differences.

• A connection could be switched automatically to a carrier with a stronger signal as conditions change.

• For international travelers, eSIMs make it easy to add a local carrier plan when traveling outside their home country. This has the benefit of avoiding your carrier's outrageous roaming fees, and can often be done without visit a phone store.

• eSIMs are more secure than physical SIM cards since they are embedded in the device and harder to tamper with.

• Mobile phones can have better water-resistance without the need for a SIM card slot.

Setting up a new phone could be as easy as turning it on and selecting a carrier from a list. Jumping from one carrier to a new one could be equally easy, and your old phone number(s) would follow you.

Why Carriers Dislike eSIM

That last item is why carriers are not keen on eSIM. If it’s easier to dump one carrier for another, subscriber turnover or “churn” will tend to increase. Carriers might have to put more effort into keeping customers satisfied. That could mean installing new cellular towers in areas where coverage is poor, or offering price incentives to keep customers. In 2018, the U.S. Department of Justice opened an antitrust investigation to determine if Verizon and AT&T attempted to influence development of the eSIM specification so that it would allow the carriers to lock customers to their networks. After the expected denials from the carriers, the investigation seemed to end with a whimper.

eSIM first appeared in Google’s Pixel 2 and Pixel 2 XL phones, which were released in October 2017. Apple added eSIM in its iPhone XS, XS Max, and XR models (released in October, 2018). Samsung's flagship Galaxy line has had eSIM capability since the S21 model was introduced. Current offerings from Motorola and Xiaomi also support eSIM. So if your smartphone is less than two years old, you probably already have the option to use eSIM.

Smartphone makers like eSIM because it reduces hardware costs and frees internal space for other uses. But the reason for the carriers’ reluctance to embrace eSIM is not hard to see. Imagine a phone that switches from one carrier to another every few seconds as signal strength or price varies. It totally destroys the captive-audience business model and creates billing nightmares. Google Fi has the ability to seamlessly switch between networks based on signal strength and speed, but currently is only partnered with T-Mobile. It's no accident that Verizon and AT&T, by far the largest mobile providers, are not playing ball with Google Fi.

However, with an eSIM equipped phone, one can have any combination of Google Fi, T-Mobile, Verizon or AT&T available for manual switching. That said, many smartphones with eSIMs also have a slot for a physical SIM, enabling dual SIM usage without needing two physical slots.

The "Big Three" carriers should be careful when thwarting consumer choice. An article in Forbes says “The growing popularity of eSIMs could allow Apple and other phone manufacturers to launch their own cellular networks.” Smartphone vendors such as Apple or Samsung would still be reliant on the infrastructure provided by Verizon, AT&T or T-Mobile, but by operating as a virtual network, they would own and control the relationship with the consumer.

Who Needs eSIM?

The typical smartphone user needs just one line and rarely needs to replace or move a SIM card. But clearly, there are users for whom the ability to automatically switch from one cellular network to another is (or would be) a big deal. It's not uncommon for folks to have a strong cellular signal at home, and poor coverage in other places, or along their path of travel. But others may realize significant benefits from eSIM. They include those who want one phone with multiple lines, and international travelers. The latter currently must carry multiple SIM cards and swap them as they move from one region to another in order to avoid exorbitant roaming charges.

The Internet of Things is a potentially huge market for eSIMs. Everything from oil rigs to automobiles seems destined to be connected to the Internet; analysts estimate 20 billion devices will have Internet connectivity in just a few years. You don’t need eSIM to switch cellular carriers on a single phone, but if you’re Ford or General Motors you sure don’t want to have to swap SIM cards on every car you’ve sold. Such large-scale applications will drive eSIM deployment.

Consumer electronics will get eSIM as an option. Apple’s latest iPhones contain traditional SIM cards and an eSIM to provide for a second line. This hybrid configuration will slowly replace the current two-card scheme that enables dual-SIM phones. Tablets, laptops, portable smart speakers and other mobile consumer devices will also get eSIM. Just don’t expect carriers to give up the lock they have on your SIM too quickly.

Can you see how a phone or other connected device with eSIM capability would benefit you? Your thoughts on this topic are welcome. Post your comment or question below...