Ses3_3-Simon_eSIM.ppt the power of new technology

simcards

1. 1
Regulatory Implications from the Introduction of
the eSIM
Victoria Falls, Zimbabwe
2017
Regulatory Implications from the
Introduction of the eSIM
Simon Molloy
([email protected])

2. 2
Agenda
1.Evolution of the SIM Card
2.Disruptive Business Models enabled by the New Generation SIM
Evolution
3.Likely timeline for eSIMadoption
4.Regulatory Issues and Responses

3. 3
Evolution of the SIM Card
•Since its deployment in the early 1990s, the SIM card has provided
secure, identifiable and authenticated access to mobile networks
•However, the traditional form of a physical, removable SIM card has
become dated as technology advances –with a range of manufacturers
including Apple, Samsung and others developing a range of products
which move to eSIMs (particularly wearable devices)
•Three types of ‘new generation SIMs’ have emerged in this process,
namely:
Embedded SIM or eSIMs: a physical SIM that is permanently
embedded in the devivce
Remote Provisioning ‘reprogrammable’ SIMs: SIM that can be
removed from the device (e.g. Apple SIM)
Soft SIMs: collection of software applications and data that resides
in the memory and processor of the device

4. 4
Evolution of the SIM Card
Examples of new generation SIMS
A soft SIM would merely replace the sealed and reprogrammable SIM with
software storage.

5. 5
Evolution of the SIM Card
Examples –Wearables and eSIMs

6. 6
Evolution of the SIM Card
•A critical feature of all these new generation SIMs is remote
provisioning technology
•This gives the consumer and/or supplier the ability to remotely change
the SIM profile without having to physically change the SIM

7. 7
Evolution of the SIM Card
•To cater for growth in this area, in June 2016, the GSMA released its
final embedded SIM specification for the M2M market , which was
supported by 40+ players
This provides a single, de-facto standard mechanism for the remote
provisioning and management of M2M connections, allowing the ‘over
the air’ provisioning of an initial operator subscription, and the
subsequent change of subscription from one operator to another
•Phase 2 of the GSMA SIM standard , which allows for devices to be
connected to the cellular networks without a smartphone, is due in late
2016 and will be released soon.

8. 8
Disruptive Business Models enabled by the
new generation SIM Evolution
•The traditional SIM is an efficient mechanism to lock a customer to an
operator (albeit weakened by SIM swapping, multiple devices and MNP if
available).
•The widespread introduction of the eSIM and Remote Provisioning
technology is therefore likely to be an enabler for disruption, with the
new technology:
Decoupling the handset and therefore the customer from the
network and the operator
Giving device owners an enhanced ability to compare networks and
select service at will directly from the device
Providing opportunities for consumers to choose networks based on
criteria such as cost, network speed and quality

9. 9
Disruptive Business Models enabled by the
new generation SIM Evolution
Key areas where MNOs are likely to see disruption
Cost Potential lowering of retail and distribution costs with fewer requirements on
operators to separately purchase & distribute SIM cards or wear the SIM tax.
Customer
Churn
As it will become easier for a consumer to switch, price competition may become
the key differentiator.Aconsumer could keep multiple operator packages for use
in different locations within a country
Billing IoTdevices which will be billed to enterprises directly and/or through speciality
IoTservice providers.Other billing no change.
Marketing &
sales
The ease of use and ease of operator switching has the potential to weaken the
MNOs position in the mobile value chain
Roaming e-SIMswill enable a virtual SIM-swap for the travellingconsumer.
Numbering Currently ‘MNCs’and numbers are allocated only to MNOs. It is very likely in the
medium or long term –extra-territorial E.212 identifiers will be used for IoT/M2M.
MNP is not an issue for IoTbut it mayallow enterprise porting.
Customer
touchpoints
e-SIMs eliminate the need for customers to go to a store and acquire a SIM card
when signing up for service.
Prepaidv.
contracts
Pre-paid markets may be less impacted as consumers already fluid.

10. 10
Disruptive Business Models enabled by the
new generation SIM Evolution
Disruptive Business Models enabled by new generation SIMs
MVNOs New generation SIM technology in handset devices will likely be a leveller of
competition between MNOs and MVNOs, as the barrier for switching is
reduced.
The proliferation of e-SIMs is likely to create a ‘spot market’, with remote
provisioning technology allowing the device to dynamically switch between
several networks according to cost, congestion and signal strength. This
process could be managed by the users ora 3
rd
party such as an MVNO.
An MVNO that takes advantage of this would clearly be a formidable
competitor. MVNOs contracting with several network operators could offer a
tariffswithout disclosing to consumers which network is providing services.
Manufact-
urersof IoT
devices
Manufacturers of IoTdevices have the ability to embed a blank e-SIM in the
device that can be activated on any network in any country provides
manufacturers with the opportunity to take control of the relationship with the
consumer, leading to the disintermediation of network operators.
OTT
Service
Providers
OTT voice and messaging services who rely on available internet connectivity
to provide their services will greatly benefit from remote provisioning
technology as it will offer a smoother ‘handover’ between differing operators,
meaning that the service provided is more consistent with less drop outs

11. 11
Likely Timeline for eSIM adoption
•It is expected that eSIM adoption will have a slow start
•In 2017, deployment will mostly be proving the concept to allow
operators and device manufacturers to gain experience of eSIM
practicalities and refine implementation and processes
•The market will then ramp up in 2018-2020 as cost, industry value-
chain, user-experience problems and regulatory issues are progressively
resolved
•It is anticipated that by 2020, close to 1 billion mobile and IoT devices
will ship with embedded, remotely-provisioned SIMs annually

12. 12
Regulatory Issues and Responses: SIM card
registration
•SIM card registration is the process of recording and verifying mobile
phone number(s) and personal information of a subscriber by a
communications service provider.
•eSIMs pose a potential problem for identification purposes as it
removes an avenue for identification by eliminating the need for a
consumer to buy their SIM card in person
•While there are various remote provisioning approaches –the optimal
approach to the registration and authentication of eSIM card and soft
SIM in IoT/smartphone devices has not been resolved in any global
market.

13. 13
Regulatory Issues and Responses:
Supporting Enhanced Competition
•An exemplar regulatory regime which supports enhanced competition is
likely to have the following features:
Mandating/Licensing of MVNOs instead requiring all MVNos to come
to commercial arrangements with licensed MNOs.
Facilitating streamlined eSIM registration processes for both
industrial use to IoT/M2M devices and smartphones subject to the
resolution of interception and national security issues
Permit eSIM registration processes to be ‘portable’ across
operators/MVNOs
Regulatory regime provides a transition scheme for an environment
of users with physical and eSIMs including registration of physical
SIM permits eSIM registration

14. 14
Regulatory Issues and Responses:
Supporting Enhanced Competition
•An exemplar regulatory regime which supports enhanced competition is
likely to have the following features:
No special or other licensing required by eSIM providers (if any
develop) for the enterprise market or beyond;
Permit electronic re-verification of eSIMs (rather than physical
checking) this could utilise on two factor authentication (‘2FA’)
provided by inter alia Singapass or iSignthis; and
Facilitate access to regulated financial services following eSIM
registration etc. in order to promote financial inclusion etc.

15. 15
Questions

16. 16
Thank You
I am happy to answer
any questions…