The twin technology forces of eSIM and IoT are jointly creating the potential for massive new opportunities for MNOs.
Concurrently, rapidly shifting market forces brought on by the COVID pandemic have forced companies across industries, including MNOs, to embrace digital transformation for gaining increased agility, automation, and transparency. For MNOs, this shift, along with declining ARPU, has started to push operators in new directions, including utilising the innovative eSIM technology in the IoT market.
According to the GSMA, the market opportunity estimate for MNOs in IoT will be €325 billion by 2025.
The eSIM Revolution and Impact on IoT Market
IoT is a critical component of enterprise’s digital transformation. It enables connectivity for a wide variety of devices within an enterprise’s network, collecting data to facilitate increased productivity, actionable insights, and product quality. Globally IoT deployments are rapidly growing, and by 2025 there will be an estimated 56 billion connected devices generating 73 zettabytes of data.
MNOs have a defining opportunity to transform their business with eSIM technology services. The benefits available through eSIM provide an ideal avenue to diversify MNO’s portfolio and take advantage of the growing IoT market.
eSIM technology services offers a flexible, scalable, and secure solution for IoT applications. The smaller size affords more design flexibility and lowers production costs. Eliminating the physical SIM card simplifies the bootstrapping of devices and allows for greater flexibility through superior subscription services.
MNOs Challenges in IoT Market
While there is a great opportunity with eSIM technology in IoT ecosystems, there are challenges that MNOs must overcome to thrive in this arena.
Legacy SIMs provide MNOs with a level of certainty on costs and risks. The leap required from their small footprint currently in IoT, estimated at 1% of MNO’s revenue, makes justifying the investment in eSIM and IoT an organisational and financial challenge.
There are also operational and cultural challenges to conquer. Entering the IoT market depends on new and transformed business groups, roles, infrastructure, and processes throughout the enterprise.
The main challenges MNOs are facing
• Cybersecurity: Security threat on the end devices. Joint responsibility of OEMs and MNOs to protect the end-users against cyberattacks.
• Connectivity: enabling massive scaling of the internet. Service providers will have a competitive advantage on this matter.
• Standardization & use of common architectures: highly fragmented. How to address this high fragmentation with a solution that utilizes common architecture? Utilize common architecture.
• Data utilization: How is data utilized, collected and stored?
MNO leadership must strategically prepare the company for exploiting the opportunity created by eSIM and IoT. This primarily involves taking on the traditional domain of Information and Communications Technology (ICT) providers.
By creating a role throughout the IoT value chain, operators can tap into the growing IoT market and diversify the business with new revenue streams. To make this shift, MNOs need to address the following areas:
- Analytics – IoT customers will demand more advanced analytics from operators. This includes creation of complex algorithms, rules-based engines, and robust reporting and dashboards.
- Applications – Clients will be seeking comprehensive IoT solutions that include application development, application-level security, and load and latency management.
- Professional Services – Providing consulting services related to the design, implementation, and operation of IoT networks is a necessity to enter the market. Clients are seeking partners, not vendors, to consult with them on developing a bespoke solution.
- Storage – Solutions will require storing bulk IoT data sets on cloud servers, plus providing data security, storage optimisation, and data backup.
With MNOs long track record of operational excellence, there are many strengths that can be leveraged for success in the IoT market, including:
- Connectivity – The unique connectivity expertise inherent in MNO operations creates a foundation to build on for expansion into the connection of IoT devices.
- Big Data – Ability to ingest and process enormous amounts of mobile data will be a critical differentiator in managing the data generated from IoT environments. In a survey of MNOs, (https://www.gsma.com/iot/wp-content/uploads/2019/10/The-IoT-Big-Data-revenue-opportunity-for-operators_GSMA_IoT.pdf) 40% indicated their ability to collect and process data would be a key advantage in the IoT market.
- Security – The experience and skills from handling sensitive data, creating secure data transmission, and managing the storage, aggregation and anonymisation of data can be highly leveraged.
- Market Presence – With a peerless market presence, and the ability to service a wide variety of industries, MNOs bring a distinct advantage over ICT players.
MNOs Positioning in the IoT market
To build upon MNO’s strengths, the following actions can position them to compete and succeed in the IoT market:
- ICT Partnerships – The IoT market has more complexity and requires new skills compared to the current enterprise communication engagements. Understanding where to leverage existing strengths and build-out capabilities versus addressing operating gaps by partnering with ICT firms is crucial to long-term success.
- Acquisitions – To address the capabilities necessary to compete, MNOs may need to make acquisitions. Targeted companies should be in strategic focus areas, such as adding niche technologies, building consultative expertise, expanding geographic footprint, or augmenting industry-specific capabilities.
- Organisational Change – The move into the ICT realm will necessitate bringing in fresh talent, adapting business models, and creating new corporate groups.
Oasis eSIM Solutions
At Oasis Smart Sim, we develop and provide advanced technologies and personalised services to enable the deployment of eSIM technologies. Our eSIM Subscription Manager offers a profile management platform allowing MNOs to supply remote and automatic mobile connectivity to eSIM-enabled devices.
We also deliver a complete set of GSMA-certified services to our MNO customers to enable 4G and 5G connectivity on IoT devices. Talk to one of our experts to learn how we can help your organisation transform and succeed with our eSIM solutions.