eSIM-only phones change the MVNO game

It’s crazy to think that eSIMs have been around for over a decade and yet this technology is really only gathering momentum now. This is, in large part, because several major devices that have been launched this year (the iPhone 14-17, Google’s Pixel 10 series and the Samsung Galaxy S26 range, all in selected markets) are going eSIM-only. With embedded SIM technology, your SIM card is built directly into the device, so there’s no physical SIM tray and you no longer need to fiddle with a tiny but powerful piece of plastic when switching devices, numbers or mobile providers.

This technology first gained ground in wearables and IoT devices where making hardware smaller and more compact was a necessity. But by the end of 2025, global eSIM smartphone penetration was at just 5%. This is expected to reach 10% by the end of 2026 and double again in 2027, according to GSMA Intelligence. The same research forecasts that eSIM‑enabled smartphone connections will reach 2.5-billion by 2028.

For new players in the telecoms space, eSIMs make it simpler to introduce new services and extend existing business models in several ways. For starters, eSIM removes the friction associated with launching and scaling a mobile service. Because there is no physical SIM card to manufacture, package, warehouse and distribute, MVNOs don’t need a large physical distribution footprint, which lowers costs. And customers don’t have to wait for their SIM to be delivered or visit a store to collect it. With an eSIM, customers can sign up, complete verification, pay and activate a service online.

Warren Alberts, chief executive officer at VAS-X. Photo supplied.

From a flexibility perspective, eSIMs also allow consumers to switch from one carrier to another, which can be done remotely by scanning a QR code or via an app. With eSIM, a single device can store several profiles at once, making it possible to easily manage separate numbers for work and personal life. This is especially useful when travelling. We’ve all heard the horror stories about the person who went overseas on a work trip and came home to a massive bill thanks to a few days of unchecked roaming. But with eSIM, travellers can switch to a local or travel data plan without having to buy and swap out a physical SIM card.

There’s also an environmental benefit to digital SIMs. When you consider that between 4.5 and 5-billion physical SIM cards are manufactured every year, which amounts to roughly 18,000 tons of plastic waste and roughly 560,000 tons of carbon dioxide emissions annually, eliminating the need for physical SIM cards is a great way to reduce our impact on the environment.

I’ve recently written about some of the opportunities that are out there for MVNOs to tailor their offerings to specific industries (read about this here) and highlighted how non-telecom brands like banks, insurers, retailers and others are making a play in this space. These are also areas where eSIMS make a lot of sense. Instead of selling a forestry company or a mine 10,000 SIM cards, the MVNO can sell a managed connectivity service for 10,000 connected assets, for example. These assets could be trees or critical mining equipment.

And for the brands that want to tap into the MVNO opportunity but have no plans to become telecommunications companies, eSIMs are an important enabler. If customers can choose a mobile plan via their banking app, verify themselves using information the bank already holds, pay from their existing account and have an eSIM provisioned directly to their phone, switching to your bank’s mobile offering is hassle free. There is no separate retail journey and no physical SIM to collect. This allows brands to embed connectivity into other services, deepening the relationship brands already have with their customers.

But just because eSIMs make it easier to offer customers a digital experience doesn’t mean that this technology guarantees a smooth and simple experience. If a customer has to call a contact centre to activate the eSIM or an OSS/BSS environment cannot seamlessly connect onboarding, identity verification, billing, provisioning and customer management, the promised eSIM experience quickly becomes anything but effortless. The MVNOs that succeed will be those that think about what happens around the technology, and that redesign the customer journey accordingly.

By 2030, GSMA Intelligence suggests that eSIMs will account for 42% of all SIM technologies. For local MVNOs looking to offer customers new value propositions and outdo their competitors, eSIM represents an opportunity to differentiate not just on price, but on the experience. While demand for eSIMs has developed more slowly in many African markets, the opportunity is there for savvy MVNOs to position their business to tap into future growth in this space.

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