Amdocs’ eSIM Platform a Trend for Convergent Ecosystems

Pelephone, an Israeli Communication Service Provider (CSP), has recently joined Amdocs’ Embedded Subscriber Identification Module (eSIM) platform alongside the likes of Vivo, a Brazilian CSP. Amdocs’ platform business model is a Software-as-a-Service (SaaS) approach that provides digital eSIM management services to CSPs. This gives CSPs the ability to offer Over-the-Air (OTA) provisioning and updates for their customers, thus enabling remote device activation, services, seamless switching between operators, and digital profile management using any channel. On the consumer side, this eliminates the need for the lengthy and largely manual process of subscription management.

For Machine-to-Machine (M2M) and Internet of Things (IoT) applications, the platform enables remote life-cycle management that improves zero-touch functionalities and provides out of the box connectivity for devices such as smart meters and automobiles. This is of especially great benefit for devices that are deployed or operate in harsh or hard-to-reach environments (e.g., smart city applications in rural areas) or where mobility (e.g., automotive and asset tracking) is a prerequisite using cellular and eSIM to offer borderless connectivity options.

The platform integrates Gemalto’s subscription management platform with Amdocs’ eSIM Orchestrator on Amazon Web Services’ (AWS’) cloud, giving CSPs the cloud advantage in a one-time integration. The eSIM Orchestrator is a two-sided platform that integrates front-end functionalities such as device entitlement and User Interface (UI) management with back-end functionalities such as Business/Operation Support Systems (B/OSS) and Network Operation Center (NOC) dashboards.

According to ABI Research’s eSIM in the Consumer & M2M Markets Market Data (MD-ESM-102), eSIM-enabled smartphone shipments are forecast to achieve a Compound Annual Growth Rate (CAGR) of 61.1% between 2018 and 2023, and by 2023 the volume of eSIM-enabled smartphones will be significantly higher than those from other device categories (most notably wearables, tablets, and laptops), accounting for 29.4% of all smartphones issued.

In the M2M/IoT space, eSIMs will see a CAGR of 25.2% between 2018 and 2023, with the largest sum of shipments coming from the automotive market, followed by asset tracking, according to ABI Research’s eSIM in the Consumer and M2M Markets (MD-ESM-102) Market Data. Many CSPs are targeting enterprise applications, which are viewed as untapped greenfield opportunities, rather than the consumer market to unlock the true value of the eSIM. Many new recent developments and partnerships between CSPs and smart card vendors to integrate eSIMs into commercial devices, which are detailed in the ABI Insight Securing Cellular Connectivity for IoT with SIM Technology (IN-5562), are a testament to this trend. This would create a market convergence, as CSPs will have to connect with the enterprises and their eSIM-enabled applications on a single platform such as Amdocs’ eSIM cloud platform. As eSIM adoption increases so will the number of eSIM-enabled M2M/IoT ecosystems, making business models such as third-party integrators for eSIMs more prevalent.

From an ecosystem perspective the rise of eSIM will enable traditional SIM card vendors, including Gematlo, IDEMIA, and Giesecke+Devrient (G+D), to move away from one-off hardware-orientated revenue generation of a removable SIM toward recurring revenue streams related to remote provisioning, subscription management, and OTA updates. This comes at a time when the traditional removable SIM card supply is slowing due to the saturated nature of the market and significant pricing pressures that continue to hit SIM card suppliers’ bottom lines.

While CSPs such as Optus, Vodafone, and T-Mobile are beginning to offer eSIM services, Original Equipment Manufacturer (OEM) rollouts of eSIM-enabled smartphones are slow, with the first rollout being Google’s Pixel 2 followed by Apple’s iPhone XR and XS launches. CSPs need to take advantage of this lag time by preparing the sourcing of required infrastructure and partnerships to manage eSIMs and reshaping their respective business models in order to take full advantage of the impending eSIM opportunity. The initial rollouts by a limited number of OEMs (currently Google and Apple) are crucial opportunities to study market dynamics based on early adopter behavior and feedback.

CSPs will also have to be focused on the wider area opportunities that eSIMs will bring. This includes the value that can be achieved from an eSIM ecosystem as well as the data derived from cross-device connectivity, particularly from a consumer perspective, to improve on existing services and move toward personalized connectivity supply and experiences.

New business models need to be derived from an eSIM ecosystem. These will see CSPs becoming more intertwined with the likes of enterprise Mobile Device Management (MDM) solutions such as AirWatch, M2M companies such as Cisco and Nokia, and OEMs such as Samsung and Apple. Such an ecosystem will require the orchestration that Amdocs provides in their eSIM platform, creating a level of convergence within the market. Further, CSPs will have to evolve their B/OSS as subscriber management becomes an OTA process.

Lastly, cybersecurity will be a central and expanding component within the eSIM market via secure OTA processes to manage and monitor networks as well as using as a secure channel to provide secure firmware updates. The OTA approach is dynamic, as this approach relates to cybersecurity and provides an evolving platform and channel from which security updates and patches can be delivered.

Amdocs and its eSIM platform are one of a vast vendor group that looks toward the creation of new eSIM ecosystems, encompassing a multitude of different vendor types ranging from secure integrated circuit and smart card vendors, module vendors, mobile network operators (MNOs) and mobile virtual network operators, OEMs, and platform providers and possibly including those products and services designed to address device and cellular provisioning and life-cycle management applications. Inter-ecosystem operating environments and cooperation will be key in unlocking the true value of the eSIM, and vendors that strategically target partnerships to create as ubiquitous a platform and set of services as possible (cross device, OEM, operating system, MNO, market, vertical, etc.) will be those which ultimately succeed in drawing out the maximum associated revenue value from eSIM-enabled devices and products.