Let´s start at the beginning, a Subscriber Identity Module (SIM) has two functions according to the GSMA:
1. Identity: the SIM card contains a unique reference number that identifies the SIM card and therefore the subscription that accompanies that SIM card. The mobile networkcan recognise the reference number and ensure that associated costs incurred are allocated correctly
2. Authentication: in order to ensure that the identity is valid, the mobile network uses a security mechanism to allow access to the network. This is achieved by the networkissuing a challenge (similar to a security question) that only that particular SIM card can answer from the information it has stored in its memory. Once validated, access to thenetwork is granted
Traditional SIM cards today work in a simple way, the end user signs a contract with a mobile network operator and gets a physical SIM card, that can be put in the end user´s device, in return. The SIM card acts as a physical authentication factor and grants access to the operators’ network. If the end user wants to change the used network for some reason, he has to sign a new contract with another operator as well because he needs the new operators´ SIM card for his mobile device to work.
eSIMS are a gamechanger and enable a maximum of flexibility because of the way they work. The eSIM is already integrated as a component in the end users device and uses so-called eUICC-profiles. While traditional SIM cards only support one pre-defined operator profile, eUICC allows the user to switch between profiles on the fly. This is especially useful when traveling in other countries or for special use cases like telematics.
As of May 2019, there are only a handful of commercially available devices capable of using eSIM. Mostly manufacturers like Apple, Google and Samsung have launched eSim compatible phones and smartwatches. One of the most interesting solutions is Apple´s combination of dual sim and eSIM in the iPhone XS, iPhone XS Max and iPhone XR.
Forecast about eSIM adoption
Depending on various factors, analysts predict that by 2025 25 to 40 percent of all smartphone connections will be enabled by eSIM. It is also estimated that the majority (about 85 % to 90) of all new smartphones shipped in 2025 will support eSIM.
GSMA specifications for the eSIM Standard
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