Claus Dietze, Chair of the TCA Board
The SIM applications that enable authenticated access to cellular networks are incorporated within connected devices via highly-secure Tamper Resistant Elements (TRE). TREs are available in removeable, embedded and integrated form factors (e.g. SIM, eSIM and Integrated SIM).
In recent years, optimism has surrounded the developing eSIM market. eSIM solutions answer a demand for flexible connectivity and future-proof security needed to enable billions of new consumer and IoT devices and use cases across our connected society.
In addition to the advanced security and cryptographic features common to all TREs, eSIMs can host multiple connectivity profiles and be remotely personalised and managed (as defined by GSMA specifications). This offers enormous potential. It brings trusted connectivity to devices which require stringent security, while also allowing those devices to be personalised in the field, receive security and connectivity updates, and be managed from remote locations. eSIM also enables a fully digitalised end-to-end user experience to promote convenience.
We are now seeing this potential starting to be realised. Global eSIM shipments are building at a significant and sustained rate, with TCA members reporting 309 million eSIM shipments in 2020 – up 83% from 2019.
And as the ecosystem continues to develop, there are three key trends that are crucial to driving eSIM adoption.
1) eSIM standardisation continuing to advance
Standardisation is critical to the mass adoption of any technology, enabling the development of globally interoperable products.
eSIM standardisation activity is now at an advanced stage, with GSMA reporting a significant increase in industry input over the past year. Over 180 organisations from across the mobile ecosystem contributed to the evolution of GSMA’s eSIM technical, compliance and test specifications in 2020, in addition to the launch of security assurance and identity schemes.
Trusted Connectivity Alliance (TCA) works in close partnership with GSMA and other industry associations to develop enabling specifications that support trusted connectivity. A key objective for TCA is ensuring eSIM interoperability and expanding the benefits of eSIM technology to more IoT use-cases.
Specifications developed by TCA are already widely deployed to promote interoperable, secure and consistent remote eSIM provisioning. Activity is now focused on enhancing the specifications to address new marketplace opportunities and challenges.
This includes adding 5G support to reflect the fact that many eSIM-enabled devices will be 5G compatible. TCA is also collaborating with GSMA to ensure that ongoing eSIM standardisation activity addresses the unique requirements of the IoT ecosystem in a simple, scalable way. For example, work is progressing to develop lightweight subscription profiles that are optimised for constrained IoT devices.
2) eSIM-enabled devices increasing beyond smartphones
Due to the interoperability, scalability and advanced security assurance levels afforded by standardisation initiatives, eSIM growth is expected to ramp up massively over the coming years as the number of eSIM-enabled devices increase.
eSIM shipment increases reported by TCA in 2020 were predominantly driven by the launch of new eSIM-enabled smartphone models and smartwatches. Regulation such as the European eCall initiative – which mandates all cars are equipped with emergency calling capability – has also promoted high eSIM uptake across vehicle manufacturers.
As we look ahead, Counterpoint Research predicts that a combined total of over six billion eSIM-enabled devices will be shipped by 2025. Smartphones will remain the key growth driver, accounting for over half of eSIM shipments. Other devices that benefit from secure, ‘always-on’, standalone mobile network connectivity will also drive an increase in eSIM utilisation. These include vehicles, smartwatches, wearables, tablets and PCs, and 5G routers, as well as myriad smart home gadgets.
eSIM technology is also set to support the growth of connected devices and applications across industry verticals including healthcare, manufacturing and smart agriculture.
3) MNOs and device manufacturers accelerating support
Alongside an increasing number of eSIM-enabled devices, there are clear signs of rising consumer and industry uptake. Instances of a mobile network operator (MNO) profile being activated and / or downloaded to a device – also known as ‘eSIM profile transactions’ – increased by over 300% in 2020. GSMA expects that strong eSIM adoption will mean that 33% of all smartphone network connections will be made using eSIM technology by 2025.
This market momentum, in combination with the opportunity for MNOs and device manufacturers to unlock new revenues and efficiencies through eSIM technology, is prompting action. Nearly 50% of device manufacturers and 66% of MNOs already offer eSIM services, with 87% of device manufacturers and MNOs planning to implement eSIM by 2025. But with demand set to escalate, activity must be accelerated.
The good news is that the industry is ready to scale rapidly. For example, TCA members report that the number of eSIM Subscription Manager (SM) platforms deployed globally increased significantly in 2020. This is an important development, as eSIM SM platforms enable the remote provisioning and lifecycle management of eSIMs. And as Gartner notes, increased accessibility of eSIM management capabilities will promote eSIM adoption across smaller vendors and enterprises to support the continued expansion of the overall ecosystem.
Increasing eSIM awareness
It is clear that strong momentum is building for eSIM technology. But there is still important work to be done to ensure its huge potential is fully realised. Continuing to educate stakeholders and end-users on the significant connectivity, flexibility and security benefits that eSIM technology can deliver will be crucial to driving adoption and promoting sustained growth.
This is an industry effort. TCA is committed to supporting and engaging with MNOs, device manufacturers, service providers and other industry organisations as part of our vision to drive the sustained growth of a connected society through trusted connectivity which protects assets, end user privacy and networks.
For an ‘at-a-glance’ overview of the 2020 market monitoring
data, download the TCA’s TRE Industry
 A Tamper Resistant Element (TRE) is a standalone secure element or a secure enclave, consisting of hardware and low-level software providing resistance against logical and physical attacks, capable of hosting secure applications and their confidential and cryptographic data.