Electronic SIMs are Part of a Pattern

Apple and Samsung are in advanced talks to join the GSMA push for standardized electronic subscriber identity modules (SIMs) used by mobile operators to activate service for any subscriber and device.

The GSMA wants to create a standardized and embedded SIM that would allow for instant activation or porting of devices to any network with the right frequency support, without the need to manually insert the traditional SIM.

Networks expected to support the plans include AT&T, Deutsche Telekom, Etisalat, Hutchison Whampoa, Orange, Telefónica and Vodafone.

As with much in the mobile business these days, you might attribute the move to machine-to-machine and Internet of Things devices and applications.

Many M2M modules will not be easy to activate using a manual process that requires a physical swap of a subscriber identity module. Nor will the cost of manual swaps be amenable.

In the traditional mobile phone business, the embedded electronic SIM might be a mixed blessing. While it should lower activation costs, it also will make marginally easier the task of leaving one carrier for another.

So the innovation might both help and hurt, depending on each carrier’s market position. A large carrier with lots of activations might well conclude that the advantages (lower operating cost) outweigh the disadvantages (easier churn).

Device suppliers might also see advantages, as the electronic SIMs lead to more user-friendly devices.

At the same time, we might arguably see a trend at work, whereby access providers gradually lose “control” over the user experience, the applications and perceived value, to other parts of the ecosystem.

That broad process has been underway because of deregulation, the Internet and key importance of devices.
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