The ability of eSIM technology to deliver advanced security, seamless and flexible connectivity, and full end-to-end digitalisation – along with myriad other benefits such as greener supply chains – has long promised to transform the connected ecosystem. Trusted Connectivity Alliance (TCA) has been tracking the development of the eSIM market since its nascent phase. The latest figures collectively reported by TCA members showed that eSIM shipment volumes increased 9% year-on-year to reach 337 million units in 2021.
It is the significant increase in utilisation, however, that suggests we are now entering a new era of eSIM. TCA reports that eSIM profile transactions – which refers to the number of times a mobile operator profile was downloaded – increased by 54% in 2021. This surge in adoption was enabled by a well-established global infrastructure that is now being widely and increasingly utilised by all major Tier 1 and Tier 2 operators.
And with TCA forecasting that the total available market for eSIM will see sustained double-digit growth in 2022, understanding the key factors driving momentum – including increased uptake across IoT use-cases, rising consumer awareness and the accelerating rollout of 5G networks – is essential to ensuring the market expands.
IoT potential through eSIM
A rapidly growing array of devices, low-cost sensors and systems are combining to form a vast IoT ecosystem. These devices, coupled with the transformative impact of big data, are driving digital transformation across nearly all industry verticals. Sectors such as automotive, utilities, healthcare, agriculture, and manufacturing are now harnessing the power of the IoT to enhance services, transform operations and maximise efficiencies.
However, the rapid expansion of the IoT ecosystem must be sustainable. Juniper Research predicts there will be 83 billion connected devices by 2024, so it is crucial that the industry can overcome the fragmentation, vulnerabilities and complexity that have historically hampered some IoT deployments.
With cellular connectivity increasing utilised to deliver the globally reliable coverage required by IoT use-cases, eSIM technology delivers the additional benefits of simple and resilient remote activation and management, as well as robust, dynamic security for the devices themselves and the vast quantities of sensitive data they communicate.
These capabilities are driving demand. Market data shows eSIM shipment volumes in 2021 were driven by surging adoption across the automotive sector and various IoT verticals, with TCA members reporting a 38% increase in M2M eSIM shipments.
Yet as IoT use-cases expand, the industry must continue to prioritise initiatives that enhance interoperability and trust. This includes ongoing work to support the consistent remote loading of subscriptions onto eSIMs across deployed devices (regardless of the SIM vendor), optimising the eSIM to meet specific IoT requirements such as network or user interface constrained devices, and positioning the eSIM as a hardware Root of Trust for the protection of IoT data, both at rest and in transit to the IoT cloud backend.
eSIM adoption and awareness
TCA’s market data also showed sustained growth across the consumer eSIM segment, despite the impact of economic sanctions and broader geopolitical trends on the global smartphone market, as well as the delay of new device launches and the reduction of shipped units due to the widely publicised worldwide chip shortage.
Despite these headwinds, the number of eSIM-enabled smartphones and consumer devices are set for continued growth. But given the fact that consumer awareness has previously been a significant challenge – with GSMA reporting in 2021 that only 20% of consumers were aware of eSIM technology – the continued development of the market relies on increased consumer education and engagement.
The 54% increase in eSIM profile activations reported by TCA clearly demonstrates that awareness is building. The capabilities of eSIM technology support a digital-first consumer experience, enabling operators to simplify customer onboarding and activation, leverage digital distribution channels to communicate personalised offers and rewards, and allow customers to easily link together different devices and users under a single subscription. This is transforming the customer relationship, and operators are increasingly taking an “eSIM first” approach as a competitive point of difference to attract and retain subscribers.
5G opportunities for eSIM
Looking ahead, the benefits of eSIM technology look set to be amplified by the accelerating rollout of 5G networks.
The ‘Recommended 5G SIM’ – which includes eSIM – defines the optimum technical capabilities that promote the highest levels of security, privacy, and functionality in 5G networks to maximise operator investments and support emerging 5G use-cases. TCA reported substantial increases in 5G SIM shipments in 2021, building on advances made in 2020, which marked the first year of widespread 5G SIM deployments.
This is creating new opportunities and benefits. For example, 5G private networks are increasingly being used as an alternative to public networks or Wi-Fi in settings such as campuses and industrial districts. This is creating an opportunity for operators to dedicate part of the 5G public network to address market demand, and the 5G eSIM as recommended by TCA promises enhanced security and optimised performance for these deployments.
An industry effort
As we enter a new era for eSIM technology, promoting secure, scalable and interoperable eSIM deployments that meet the unique requirements of emerging use-cases remains an industry priority. This will require continued close collaboration with industry stakeholders across the connected ecosystem to support trusted connectivity.
A breakdown of data collected through TCA’s member monitoring process is available via an annual subscription. For more information, please contact info@trustedconnectivityalliance.org. For further insights, watch TCA’s webinar exploring key trends across the eSIM and 5G SIM market and download the TCA’s Industry Insights infographic.
About Trusted Connectivity Alliance
Trusted Connectivity Alliance (TCA) is a global, non-profit industry association working to enable trust in a connected future. The organisation’s vision is to drive the sustained growth of a connected society through trusted connectivity which protects assets, end user privacy and networks. TCA members are leaders within the global Tamper Resistant Element (TRE) ecosystem and work collectively to define requirements and provide deliverables of a strategic, technical and marketing nature. This enables all stakeholders in our connected society to benefit from the most stringent secure connectivity solutions that leverage TCA members’ expertise in tamper proof end-to-end-security. TCA members are: Card Centric, COMPRION, Eastcompeace, Giesecke+Devrient, IDEMIA, Kigen, Linxens, NXP Semiconductors, Oasis Smart SIM, Qualcomm, STMicroelectronics, Thales, Valid, Workz Group and Wuhan Tianyu.
