The Impact of the EU’s Incoming Right to Repair Rules on the eSIM Market

In February 2027, new rules on user-serviceable parts—especially user-replaceable batteries—will become enforceable in the European Union (EU). As a high-penetration industry heavily affected by changes to replacement rates, the impact on the Subscriber Identity Module (SIM) market would be extreme—if the fervor and proliferating headlines were accurate. However, despite the concept art depicting iPhones with battery insertion similar to that of a 2010 Nokia, the actual implications of the legislation are not as severe.

Critically, this movement has been fighting a war of attrition with major smartphone vendors—most notoriously Apple—for many years. The legislation was established in 2023 and is currently receiving new attention because preparatory requirements, such as data for the “repair scores” associated with devices, are now beginning. The long lead time before full-blown enforcement has seen a gradual transition in the smartphone market, with device life spans growing over the past 2 years. Repairability has been improved compared to earlier models. Apple, for example, introduced new adhesive methods for the battery in the iPhone 16 in anticipation, as well as improving the design of the casing to improve access for repair.

However, despite fierce criticism from full right-to-repair advocates, the legislation does not mark an entry into a world where smartphones are regularly fixed at home by the average user. All parts other than batteries are still permitted to require specialist tools for repair, and there is a broader scope than some might have expected for manufacturers to continue to exert a high degree of control over third-party repair professionals.

Continued improvements in battery longevity also play a significant factor, with a specific requirement in place that batteries retain 80% of rated capacity after 1,000 full charge cycles. Battery life has been a much larger part of smartphone marketing than in years prior, despite a concurrent push for power-hungry Artificial Intelligence (AI) features, creating a significant advantage for manufacturers that can invest in the Research & Development (R&D) required to offer both. The longer life span of premium devices will also drive a shift toward higher-end models in cost-sensitive markets, with the economics of flagships beginning to make sense if 7 years of spare part availability and at least 5 years of Operating System (OS) updates are guaranteed, and the hardware can genuinely support this life span. Combined with an increasing variety of financing options to enable spreading the cost of a high-end device, as well as employment enabled by access to a decent smartphone, this makes high-end devices much more attractive in the long run than in the past, including in cost-sensitive regions. Combined with the impacts of an ongoing memory shortage, which has smaller manufacturers fighting for access to memory components, the coming years will be extremely challenging for the budget device market.

For the broader smartphone market, all of this is bad news for total volumes. However, this creates a perfect storm in markets where eSIM platform vendors expected low penetration for years. In cost-sensitive markets such as Africa and Latin America, budget devices typically dominate, and with limited eSIM availability in this tier, operators are not inclined to support or prioritize eSIM transactions. However, longer life spans and requirements to design for repair—designs that are usually unified across global models despite stemming from EU legislation—remove a key barrier, making the Total Cost of Ownership (TCO) of mid-range devices much more appealing. As the budget market struggles through the next few years, facing skyrocketing memory costs and supply chain difficulties, the gap consumers see between budget and mid-tier device costs will close. If supply issues develop as badly as some fear, the choice may be all but eliminated anyway, with manufacturers lacking incentives or components to produce enough to meet the previous demand.

If these conditions are met effectively by mid-tier smartphone vendors, the device landscape in cost-sensitive markets will shift decidedly upward. Increased mid-tier and higher-end uptake will distinctly accelerate eSIM penetration in the installed base.

For manufacturers, the emphasis on repairability and long-term support also provides a direct driver toward integrating eSIM. Failures in physical SIM trays are more common than in eSIM, and the fact that eSIM faults can be dealt with by Over-the-Air (OTA) software updates, rather than potentially costly and complex hardware replacement is a significant attraction. The flexibility of digitally-distributable resolutions to security bugs that could be found in 1 year or 5 will also be top of mind for operators that recently witnessed the winding queues waiting for SIM replacements from SK Telecom following a breach. The operator had to bear the cost and customer relationship damage of this complex and time-consuming replacement scheme. For an eSIM-first or eSIM-only operator, correcting this issue is significantly less disruptive, offsetting some of the burden introduced by supporting older and older devices.

There are also strong drivers for eSIM usage for consumers, with users in Africa typically accustomed to multiple SIM usage and often subject to poor international support for their existing profiles. The high degree of flexibility and the improvement in travel connectivity make eSIM an attractive prospect in this market.

The African Union’s Digital Transformation Strategy also places a strong emphasis on universal access to digital identity, driving a “digital first” consumer mindset and eliminating Know Your Customer (KYC) challenges. In the Middle East, the same conditions helped support operators with user acceptance of an “eSIM-first” strategy, which resulted in sufficient uptake for Apple to go eSIM-only in six countries.

Granted, the improvements to life spans and repairability will not result in a sudden turnaround in flagship usage in the region. But especially in wealthier cities, where access to third-party repair shops is high and residents are likely to travel internationally, there is an opportunity to lead operators in an “eSIM-first” strategy and occupy a market position that will explode once the budget and mid-range market reach easier waters and resume integration of eSIM hardware.