Travel eSIM: a passport to growth for eSIM among MNOs?

Authors: 

• Peter Jarich, Head of GSMA Intelligence

• Pablo Iacopino, Head of Research and Commercial Content at GSMA Intelligence

A slow journey for eSIM so far

eSIM has been around for a decade across consumer and enterprise use cases. Contrary to initial ambitions and forecasts, its adoption has been slow. In the smartphone market, eSIM adoption in 2024 stood at 3% of connections globally, with nearly half of eSIM users in the US, where the launch of eSIM-only iPhones in 2022 has boosted adoption to around 30%. While no one expected global adoption on a par with the success seen in the US, 3% is a fraction of the c15% predicted six years ago for 2024.    

No single issue is to blame. Rather, a set of conspiring factors has been at play, including limited availability of eSIM smartphones beyond flagship models; low levels of commercial promotion from MNOs (only 8% of eSIM-aware consumers discovered eSIM via MNOs); and difficult processes for consumers looking to migrate from traditional SIM to eSIM. 

As a result, despite growing awareness of eSIM (at 50% on average in major markets), consumers have moved rather slowly towards the technology. 

Given the GSMA’s role in bringing eSIM to life, you’d expect us to be optimistic and bullish on the technology’s potential. Regardless, there are real reasons to expect growth in the market. Some are obvious; some are less so. 

How travel eSIM could help define the next destination 

The biggest opportunities for making significant progress with consumer eSIM are well known:

• potential support for smartphone eSIM in China 

• the transition to eSIM-only phones beyond the US 

• a growing array of mid- and low-price eSIM phones 

• more MNOs prioritising eSIM when onboarding new customers (a trend seen in countries such as Germany, France and the UK).

The potential role of new travel eSIM offers from MNOs is not so well discussed. Airalo’s ‘unicorn’ status (following a recent $220 million funding round) highlighted the success of the travel eSIM use case – and the fact that MVNOs have driven it. 

However, a growing number of MNOs are integrating travel eSIM into their offers. For example, in June, Vodafone launched travel eSIM in more than 200 countries. While seemingly an incremental change in business strategy among MNOs, this could be a major boon to consumer eSIM uptake, for several reasons: 

• Trust. MNOs are a trusted channel, whereas MVNOs are relatively unknown brands, boding well for telcos moving into the space. 

• eSIM value. Consumers uninterested in eSIM cite a lack of benefits as a top three reason. Travel eSIM is a clear benefit and could help change consumer sentiment. 

• Roaming expansion. Travel eSIM supports the expanded use of mobile connectivity when travelling (consider ‘silent roamers’, for example). It can deliver the true concept of mobility everywhere and enable MNOs to tap into revenue streams that simply may not have existed otherwise. 

• Ease of use. With eSIM integrated into offers, MNOs should be incentivised to make the transition to eSIM easier (including driving the supply of more eSIM smartphones). 

Of course, there is a risk. Competing head-to-head with low-cost, travel eSIM solutions could cannibalise traditional roaming revenues – particularly in an era of cost-conscious consumers. Regardless, some MNOs see value in capturing some revenues (including inbound roaming) rather than none at all. And, if eSIM gains traction in the process, then it represents a win–win.