eSIM Tech Trending Upward in Africa

Analysts believe that the adoption of embedded SIM (eSIM) technology is slowly rising in Africa, with South Africa leading in the region.

"Adoption of eSIM technology is on the upward trend in the region, not only with the availability of smartphones that have eSIM capability but also with the number of new wearable devices that are eSIM-enabled. Also, the number of operators supporting this technology is on the rise," Sabelo Dlamini, senior research and consulting manager at IDC, told Connecting Africa.

Ofentse Dazela, director of pricing research at Africa Analysis, believes that South Africa has the most advanced communications networks in Africa and is "emerging as a front runner in a race to adopt eSIM technology."

"In Q1 2019, Vodacom officially launched support for eSIM devices in SA, by providing eSIM support to Samsung Galaxy Watches, allowing the devices to connect to its network. It plans to accommodate more devices early in 2020, along with Rain and MTN which are also planning to provide full eSIM support next year," he says. (See Vodacom Launches OneNumber.)

Dazela says the technology is expected to be a key growth driver for the Internet of Things (IoT) and will mostly benefit businesses in the local market which use IoT technologies.

"This includes those that have large-scale M2M deployments and use thousands of pieces of hardware requiring mobile connectivity. Installation of SIM cards into each unit is costly and time-consuming. eSIM allows remote connectivity of technology to a mobile network. If the technology is required to operate in another country, it can be programmed remotely to connect to an operator in that region," he explains.

Dlamini says that eSIM mostly refers to SIM cards built into phones and other devices but may also extend to eUICC (embedded Universal Integrated Circuit Card) capability as an eSIM.

"The eUICC works with most SIM card types but is more about programmability of the SIM card and the capability to host different operator profiles, which is an enabler for IoT applications," Dlamini adds.

He says that eUICC will be an advantage for cross-region IoT applications as sensors equipped with eUICC-enabled SIM cards are able to retrieve a profile of a local mobile network operator when roaming into different regions or countries.

"Ability to change an operator without having to change a SIM card will be one of the drivers for IoT," Dlamini believes.

Dazela adds that eSIM technology has the capability to remotely provision, authenticate and manage network access for the mass deployment of devices, while the traditional mobile connection was based on a model of one connection per user.

"In the future, millions of connected devices will connect to mobile networks without the need for a SIM card. eSIM uses less space and is cheaper than traditional SIM technology. This means that mobile connectivity can now be introduced into hardware where it was previously not feasible due to cost or space restrictions."

Global forecast
Market research company Ovum's eSIM Device Sales Forecast published in October 2018 predicted that the global eSIM market would grow to 612 million device unit sales by 2022, compared with around 45 million in 2018. However, every year is seeing a massive jump in sales, with only 4.4 million reported in 2017.

For the Middle East and Africa (MEA) region, Ovum predicted that by 2020 the eSIM market would grow to 74 million device unit sales, compared with just 2.8 million in 2018 and a predicted 5.9 million for this year.

Source: Ovum eSIM Device Sales Forecast: Smartphones, Tablets, and Wearables, 2017–22.

According to Ovum, tablets and wearables like smartwatches made up most of eSIM device sales in 2017 but the launch of the iPhone XS and XS Max, which are eSIM-compatible, dramatically boosted smartphone eSIM sales in 2018, making it the largest eSIM category by far going forward. Ovum predicts that SIM-compatible smartphones will reach more than 500 million sales in 2022, but this will still only represent less than 30% of all smartphone sales.

Source: Ovum eSIM Device Sales Forecast: Smartphones, Tablets, and Wearables, 2017–22.

Despite the interest in eSIMs, Dazela believes that the technology is still very much in its infancy globally.

"Only a handful of operators are currently making inroads in that space in the MEA region. Moreover, device manufactures are still trying to bring more and affordable eSIM-enabled devices into the market."

Ovum agrees, saying that operators remain slow to adopt eSIM technology globally.

"More operator support would obviously lead to quicker adoption by most cost-conscious smartphone manufacturers, but also operators actively using eSIM to improve multi-device packages could lead to a small bump in both cellular and eSIM-enabled tablets and wearables," the report says.

"eSIM technology is expected to have a significant impact on the local market once eSIM-enabled devices gain economies of scale," Dazela adds. "eSIM technology will likely spell the end of an era for manufacturers and suppliers of SIM cards, with the physical SIM becoming obsolete in the mobile service ecosystem."

Local moves
This week Dublin-based mobile and IoT solutions provider, Workz Group, announced it had become the first certified full eSIM provider in MEA and one of only six companies in the world to carry GSMA accreditation across eSIM production and remote management.

Since first introducing its eSIM offering last September, the company has partnered with a host of mobile network operators, device manufacturers and governments to launch projects across North America, Europe, Africa and the Middle East for the consumer device, automotive and energy sectors.

"Our latest accreditation means we can now offer GCC [Gulf Cooperation Council] and African clients a fully local solution as well as the peace of mind of geo-redundancy across certified Dubai and European locations," said Tor Malmros, managing director of the Middle East and Africa at Workz Group.

In July 2019, Workz opened an office in Dakar, Senegal, its second on the continent after opening an office in Johannesburg, South Africa, in June 2018.

South African company execMobile also recently made its eSIM profile technology available locally. The company currently supports corporate customers' Apple products, which support eSIM profiles, and plans to support Google and Samsung devices before the end of the year.

According to Ovum tablets and wearables made up most of eSIM device sales in 2017 but this will shift more to smartphones going forward.