How will the new eSIM specifications fuel IoT adoption?

eSIMs have been around for a number of years, but despite a market valuation at over $7,190 million in 2021 they have yet to deliver the kind of wide scale IoT adoption envisaged at their inception. According to expert opinions, the tale of their unfulfilled potential is mostly down to eSIM remote provisioning standards, that either make IoT deployments too complex and inflexible, or just don’t meet the needs of a large segment of devices that require connectivity. 

The full potential of eSIMs is about to be unlocked with the help of new standards, SG.31 and SPG.32, released by GSMA in May 2023 that are paving the way for a much simpler remote provisioning of both consumer and Machine-to-Machine (M2M) IoT devices. Let’s explore what the new specifications will mean for mobile network operators, consumers, and enterprises. 

There are two standardized eSIM remote provisioning specifications in use: M2M eSIM standard and Consumer eSIM standard. While the current M2M solution has been effective for a closed market mostly driven by the automotive sector, it has some disadvantages. 

The M2M specification is operator-centric, which means the operator triggers the profile ordering and the eSIM profile management operations. The switching of the profile from one operator to another requires a very complex and costly integration process between the various elements of the M2M architecture—namely between Subscription Manager Data Preparation (SM-DP) and Subscription Manager Secure Routing (SM-SR) servers from different operators—which is not necessarily automated.  

The new GSMA specification is set to open up the IoT market by removing the inflexibility associated with M2M standard that causes situations such as SM-SR lock-in. As a result, we can expect to see a democratization of IoT deployments where enterprises will be able to buy services from a broader range of players and easily obtain subscriptions from operators outside their home country.  

We can therefore expect to see an acceleration of global deployment of all cellular IoT projects, particularly those relying on low power networks and devices. 

3.4 billion eSIM-enabled devices are predicted by 2025, up from 1.2 billion in 2021. The demand is growing exponentially but, until now, IoT device manufacturers had to put in place multiple production lines to meet the M2M remote provisioning standard. They had to choose an operator when manufacturing a device and couldn’t change it afterwards unless they went through a complex process of contracting and integrating with several operators.  

Manufacturers of eSIM-enabled devices will be able to accelerate their time to market while reducing their dependencies on third parties. They will be able to produce simpler and more reliable devices. Ultimately, they will be able to support the growing market to finally realize the promise of ubiquitous IoT. 

Furthermore, the new specifications will integrate connectivity during the manufacturing process with one single Stock Keeping Unit (SKU) for wherever the device will be sold and/ or deployed. As a result, this makes Massive IoT and the deployment of additional billions of IoT devices achievable. This finally makes IoT truly scalable. 

The consumer eSIM architecture is the second of the two types of the eSIM standard. Unlike M2M, the consumer architecture has no SM-SR module. Instead, it has a component called Subscription Manager – Data Preparation+ (SM-DP+), which combines SM-SR and SM-DP functionalities. For profile management, there is a Local Profile Assistant (LPA), a mobile application incorporated into the device.  

The new GSMA standard is an evolution of the consumer standard. It builds on the simplicity of the ‘old’ consumer architecture. The main difference is that in the new standard, the LPA (Local Profile Assistant) component of the consumer specification becomes an IoT Profile Assistant (IPA). IPAd (device-based) or IPAe (embedded as an application within the eSIM) provides the functions that enable the eSIM inside the device to be interoperable with any SM-DP+. As a result, the remote management functionality is simplified and improved, with no user interaction required.  

Furthermore, the new specification introduces a new module, eSIM IoT Remote Manager (eIM). This eSIM provisioning tool facilitates deploying and managing eSIM-enabled IoT devices on a large scale, enabling what is known as Massive IoT.

We can anticipate that, in the near future, this will increase the presence of eSIM hubs in the market proposing eSIM local profiles to enterprises. These hubs will be able to solve key local challenges including permanent roaming restrictions, limited NB-IoT roaming, and more. Ultimately, this will radically simplify global deployments for enterprises. 

We are just one step away from making Massive IoT a reality. Embedding connectivity within products and launching them worldwide is becoming an easier and more flexible process. By initially equipping products with a global eSIM bootstrap profile at the factory, the transition to a local profile, when necessary, becomes effortless. This approach significantly reduces barriers for the widespread adoption of Massive IoT technology. 

With the new GSMA SGP.32 technical specification, eSIMs will finally demonstrate their significance as a key IoT enabler.