December 9, 2024

Why Are eSIMs Becoming Popular and How Do They Differ from Physical SIMs?

eSIMs are redefining connectivity across the globe. As adoption increases, smart businesses will find new revenue opportunities.

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zendit API

Embedded SIMs (eSIMs) are now everywhere. After starting out in the likes of smart wearables, trackers, and sensors, they are now part of new Apple and Android phones, smartwatches, and even cars.

The ease of switching between carriers and data plans, the absence of roaming fees when traveling to a new place, and the large number of eSIM profiles supported on a single device continue to make eSIMs a popular choice among users (especially travelers).

Yet, many businesses have not started to explore this technology’s benefits for several reasons, including:

Not knowing the advantages of eSIMs over traditional SIMs
Feeling uncertain about the future of eSIMs
Not being clear about how to tap into the opportunities in the eSIM market.

If your business is one of them, we aim to answer these doubts in this article.

Join us as we delve deep into what eSIMs are, how they differ from physical SIMs in this article, and how you can use them to unlock a brand-new revenue stream.

Contents list

What is an eSIM?
eSIM versus SIM: What are the key differences?
eSIM versus SIM: Pros and Cons
eSIM vs physical SIM and the opportunities for businesses

Do you want to create new revenue streams from the growing eSIM market? Book a demo with zendit to learn how you can resell eSIMs by integrating our API into your website or app.

1. What is an eSIM?

An eSIM is an embedded chip built into the motherboards of various devices (think phones, tabs, smart watches, and drones) that provides them with a network connection. This allows them to access the internet, make and receive phone calls, and send and receive text messages.

They are usually very small – smaller than micro-sims.

The evolution of SIM technology

Source: Honor

eSIMs require activation before usage. For phones, you can do this by following a wizard (step-by-step process) on the phone’s menu, downloading an app via a WIFI connection, or scanning a QR code on the phone’s website.

Once activated, the first step is to select a carrier.

eSIM cards typically support different carriers and users can create a given number of eSIM profiles corresponding to different carriers. Many phones allow up to eight different profiles and newer models are already going beyond that limit.

In the corporate world, many business employees have used eSIMs to create separate profiles for work and personal use without the need to purchase another phone. Some employers even recommend this in the interest of work-life balance, so they can easily separate their jobs and their free time.

In the United States, top wireless carriers like AT&T, Verizon, and T-Mobile support eSIMs, along with other roaming carriers that seek to provide global connectivity.

eSIMs are also reprogrammable. Users can deactivate a given eSIM profile, create a new one, and reactivate old profiles with the technology’s special software.

2. eSIM versus SIM: What are the key differences?

Though they perform the same functions, there are key differences between eSIMS and physical SIMs that affect users’ experience.

Location and accessibility

Physical SIM cards have a special space designed for them. In many older phones, the physical SIM slot is visible after removing the battery and it can house both nano SIMs and micro SIMs. More modern phones will have a removable tray that only supports micro SIMs.

Physical SIMS can be easily removed and replaced, whatever the size or location of the SIM card slot.

eSIMs, meanwhile, are embedded in the motherboard of the phone. This means they cannot be easily removed or replaced.

Adaptability

Every traditional SIM card belongs to a specific operator or carrier. Changing the operator often means replacing the SIM.

A single eSIM, however, can support many operators and users can switch between operators at any time.

Compatibility

Another difference between SIM and eSIM is device compatibility.

Physical SIMs are compatible with older and newer phones. However, as mentioned, the iPhone 14,15, and 16 series no longer support physical SIM cards in the US.

eSIMs are usually only compatible with newer phone models, which rules out many older phone models.

Activation

Every new SIM card needs to be purchased, registered, and activated before it can be used. In some places, this registration and activation process can be tedious.

eSIMs also need to be activated. However, unless you are changing phones, you only need to do this once. The activation process is also usually straightforward and stress-free.

Usage abroad

With physical SIMs, users moving abroad have to get a new SIM card that is active in the new location. The only alternative is searching around for a WIFI connection (with all the attendant cybersecurity issues).

eSIM users abroad, meanwhile, only need to add a new operator or carrier whose reach extends to their current location.

Phone numbers

Every physical SIM card comes with a phone number and this supports phone calls and text messages over operators’ mobile networks.

On the other hand, not all eSIM carriers provide phone numbers. In a world where you can make phone calls and send text messages on various social media apps, some carriers are content with offering only mobile data connection.

Multiple lines

The last difference between SIM and eSIM is the idea of keeping personal and work lines distinct.

If a phone only supports a single SIM card, this will be impossible to achieve without purchasing a new phone. Even if the phone supports dual SIM, many people prefer to have two operators for personal usage. In the end, getting another phone may be inevitable.

eSIMs, by allowing multiple profiles, can support this separation of private and work lines without requiring new phones.

3. eSIM versus SIM: Pros and Cons

Let’s take the eSIM versus SIM conversation another step forward by considering the pros and cons of both options from the perspective of companies looking to offer them to their customers.

Pros of eSIMs

Is eSIM better than physical SIM? Here are some reasons why this might be the case:

Switching carriers: Users shopping for better deals can easily switch to another operator without purchasing another SIM.

Multiple lines: The opportunity to create multiple eSIM profiles allows users to explore different operators and in the case of employees, keep work and personal life separate.

Cost saving: Switching carriers without buying a new SIM and separating work and personal lines without purchasing a new phone typically saves users a lot of money.

This also extends to companies advocating separate work lines. They don’t need to spend money purchasing multiple SIMs or phones for their employees.

Convenience: Customers need only one activation to use multiple carriers and lines on a phone.

Scalability: Companies can easily subscribe to mobile plans that credit the work line of all their employees. As the employee strength grows, they can expand the reach of the plan.

Excellent for travelers: All travelers need to do is switch to a carrier that supports their current location.

No roaming fees: Users can ditch roaming fees and migrate to another carrier’s network.

Cons of eSIMs

Though eSIMs have been revolutionary and have provided immense benefits, some concerns remain:

New phone, new activation: Migrating from an old phone to a new one often requires a fresh activation process (in addition to deactivating the old device). Those who change phones regularly may find this inconvenient.

Adoption is not yet universal: Even in the US, not all mobile virtual network operators (MVNOs) support eSIMs. Outside the US, the majority of carriers and operators do not yet support eSIMs.

Not all phones support eSIMs: Though eSIM technology is no longer the preserve of Google Pixel and iPhones (many Android devices now support them), not all phone brands or models offer them.

Pros of physical SIMs

So far, the eSIM versus SIM debate has been favorable towards eSIMs. For balance, let’s consider the benefits of physical SIMs and why some people still prefer to stick to them.

Easier to switch between phones: With physical SIMs, switching phones is as easy as removing SIM cards from one phone and putting them into another. There is no need for deactivation.

Those who switch phones frequently may find this more convenient.

Universal device compatibility and adoption: Apart from the iPhone 14, 15, and 16 series sold in the US, all mobile phones are compatible with physical SIMs. Those who prefer to stay with what is familiar and universal will prefer physical SIMs for now.

Appropriate for the less tech-savvy: Registering a SIM card may be more stressful but those who are less tech-savvy will prefer it to activating an eSIM.

Using an eSIM also involves operating downloadable software. For some, that is one piece of software too many.

Cons of physical SIMs

Physical SIMs may hark back to a simpler time, but they also have several downsides.

Can get lost or damaged: Physical cards can get lost or damaged. This can happen when users are switching SIMs within a phone or between phones. Once lost, they have to go through the stress of registering for new ones.

Difficulties in switching networks: Switching to a new mobile network means registering for a new SIM. If a mobile phone does not support dual SIM, users cannot even have two mobile networks at the same time. They have to switch SIMs anytime they need to use another carrier.

High cost of using multiple lines and operators: Employers may have to pay for multiple SIM cards or phones if they want their employees to maintain a work line. If employees are the ones who want it, they have to bear the high cost.

Roaming fees for international usage: Using a local carrier in locations outside of their coverage area will incur roaming fees that can be very significant. This is a turn-off for those who travel regularly.

So, which is better, eSIM or physical SIM?

People who value using multiple networks and lines will prefer eSIM over physical SIM. Regular travelers and businesses that want employees to maintain a work line will also prefer to appreciate an eSIM.

On the other hand, the less tech-savvy may want to stick to removable plastic cards. Those who switch phones regularly may also prefer to stick with the older SIM technology.

4. eSIM vs physical SIM and the opportunities for businesses

The growth in the adoption of eSIMs across the globe can provide new revenue streams for businesses that know how to take advantage of them.

In this section, we consider the drivers of growth in the eSIM market and how your business can profit from this growth.

The growing adoption of eSIMs

Consumer eSIM profile downloads (a measure of adoption of eSIMs) increased by 109% year-on-year in 2023, according to a report by Trusted Connectivity Alliance (TCA), a telecommunications company.

They attributed this growth to rising awareness of the benefits of eSIMs as well as improved eSIM support in new devices.

“Our latest data makes it clear that wider eSIM availability is translating into strong adoption, with consumers across the world now realizing the benefits of flexible and seamless connectivity,” says Bertrand Moussel, Chair of the TCA Board.

Also, the number of eSIM smartphone connections worldwide increased by 312% between 2022 and 2024, according to Statista, a data analytics website.

Number of eSIM Smartphone Connections, 2022-2024.

Source: Statista

TCA also expects future growth in adoption to be driven by the availability of more eSIM-compatible devices and the popularity of mobile devices with no physical SIMs.

“Future growth in consumer eSIM adoption is expected to be boosted by the launch of eSIM-only smartphones across more regions, coupled with the broader availability of eSIM-enabled devices,” they say in the report.

Travel eSIMs will also become significant, growing from 40 million users in 2024 to 215 million by 2028 as the cost of roaming internationally increases, according to Juniper Research, a market research platform.

Increasing your revenue streams with eSIMs

What does the growth in the eSIM market mean for your company?

The greater adoption of eSIMS means that more people will be seeking to subscribe to carriers and MVNOs that support them. They will also want to purchase prepaid mobile data plans from these carriers and MVNOs.

So, why not turn that demand into a new revenue stream for your company?

By integrating an eSIMs API into your website or app, you can offer eSIMs to your existing customers and even win over some new ones.

At zendit, we make this process seamless and hassle-free. You can integrate our scalable plug-and-play API into your website or app.

Once integrated, you will get access to a wide range of eSIM bundles from local, regional, and global carriers and MVNOs that you can purchase and resell to your customers. zendit is a white-label solution, so you can customize the data bundle offerings with your brand identity.

You can check all the available offers by using the appropriate GET endpoint, as shown below:

You can filter all available offers by brand (the carrier or MVNO), country, region, and subtype.

The “limit” and “offer” strings can streamline the number of offers you want to view at once.

You can use the POST endpoint to purchase any of the eSIM products and also view your transactions and account balance using the relevant GET endpoint.

There is no limit on purchases and withdrawals, so you can easily scale this service whenever you want.

With zendit’s plug-and-play API, you can tap into the growing eSIM market and unlock new revenue streams by reselling eSIM data plans to customers across the globe.

Do you want to expand your revenue by reselling eSIMs to existing and new customers? Book a demo to see how zendit works or contact us to learn more about how our product can help your business.

Takeaways

Embedded SIM cards have evolved beyond IoT applications and are now widely used in smartphones, tablets, smartwatches, and even cars.
Why is eSIM better than physical SIM? Popular reasons include easy switching between carriers, support for multiple profiles, and the absence of roaming fees.
While eSIM adoption has surged globally, barriers to the new technology remain, including limited compatibility with older devices and incomplete global carrier support.
By integrating eSIM APIs like zendit, companies can resell mobile data plans, expand service offerings, and tap into a growing market.