Jorn Vercamert is Chief Product Officer at Proximus Global.
Steve Jobs probably said it best: People don’t know what they want until you show it to them.
Though eSIM technology is widely supported across mainstream devices from Apple, Samsung and Google, there’s still a surprisingly large gap between consumer awareness and the market potential of eSIM. Only 33% of adults in the U.S., U.K. and China are aware of what an eSIM actually does, and 42% are unsure if their phone is even equipped with one.
eSIMs are ready to take flight in the travel industry.
What’s special about eSIM technology? It’s a fair question since its predecessor—the physical SIM card—wasn’t exactly considered a breakthrough innovation. It was a stagnant technology for years, and swapping out SIM cards, particularly while traveling, proved laborious for most consumers.
With eSIMs, however, things have changed. They eliminate the need for physical SIM cards and are quickly becoming a compelling alternative to local SIM purchases or mobile roaming, thanks to the flexibility and convenience they provide. This is why the global travel eSIM market is projected to exceed $3 billion by 2033, according to recent estimates.
If there’s one realm where eSIM technology is set to take flight, it’s in the international travel industry. The industry is expected to reach 1.8 billion people per year by 2030, up from 1.5 billion in 2019 according to UN Tourism. As travel accelerates, so do consumer demands for seamless, reliable, high-quality and flexible connectivity while on the go.
The strength of eSIM lies in how it seamlessly bridges modern digital life with real-world mobility. For travelers, the burden of bill shock from sky-high roaming charges is replaced by a frictionless, digital experience. Consumers are also free from needing to physically visit a brick-and-mortar store or airport kiosk to swap SIM cards. Instead, all they need to do is download an eSIM profile, activate local connectivity, and instantly, they are fully connected while on the go.
eSIM has an awareness gap, not an appetite gap.
While awareness of eSIM may be low, the appetite among consumers for the technology isn’t.
In fact, 49% of consumers are open to using the technology when informed of its many benefits. In the U.K. and China, this was even higher at 56% and 60%, respectively.
This presents mobile operators, retailers and other nontraditional suppliers with a considerable opportunity. Indeed, there’s a misconception that only traditional mobile operators stand to profit from the eSIM gold rush. In reality, the door is wide open for a wide swath of brands to seize the eSIM opportunity.
Indirect distributors, for example, ranging from banks to travel companies, tour websites and global hotel chains are well placed to accelerate adoption given their direct relationships with consumers. Companies in the travel sector, specifically, are taking an interest in eSIMs as a natural upsell opportunity, leveraging it to offer instant in-destination connectivity with ticket bookings. Hotel groups can upsell hassle-free connectivity at check-in. Supermarkets, too, can offer global data plans as a digital add-on. The cross-sell and upsell potential is vast and relatively untapped, given the strong customer loyalty that many retailers and other non-carrier/traditional suppliers are able to leverage.
For example, French supermarket brand Carrefour recently created an offering for travelers using eSIM-enabled phones to buy data packages over-the-air in a secure, convenient way. Mobile users with compatible phones need only buy the pre-paid eSIM, offering a more affordable option than traditional roaming rates, depending on the operator.
Of course, mobile operators could benefit from eSIM, too, if they use it as an opportunity to replace roaming revenues with more flexible, cost-effective eSIM solutions tailored for travelers. This could help create stickiness with their existing customer base but would require taking the lead on increasing consumer awareness and educating on device compatibility. Enterprises can also be educated on how eSIMs simplify device management—for instance, by allowing employees to maintain both work and personal numbers on a single phone.
In addition, telcos and enterprises can explore partnerships with global communication providers to scale and expand travel eSIM solutions. Airlines are a good example; they are already engaging in an almost digital-native way with customers, so there is a chance for them to easily integrate eSIM solutions into their platform and as part of a wider premium subscription offer.
The market always rewards the first movers.
As for who the most successful movers will be, that will depend greatly on who does the best job of educating consumers on the technology while developing innovative eSIM-enabled services that address travelers’ growing needs.
Every brand today should want to add more revenue streams to their arsenal. The pressure of finding new ways to make money is on amid economic turmoil, and eSIM could potentially be a relatively easy lifeline for organizations.
While eSIM has been around for quite a while, not everyone has an eSIM-capable phone yet. The market will soon reach a point where eSIM support is ubiquitous across devices. When that happens, it’s the companies that have taken the lead in demystifying eSIM and embedding eSIM into their offerings that will be the front-runners.
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