Digital Gabe
Cutting Edge Commentary On All Things Media

Could eSIMs Mean Big Trouble For Big Telco?

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Later today Apple will be debuting its latest array of iPhones and other hardware devices during its annual Fall product launch.  Lost in all the hype around bigger screens and brown colored iPhones (not kidding), there’s one very subtle but important change to their phones’ technology which should make the Telcos worried.  It’s rumored that Apple’s new phones will contain something called an eSim, which is connectivity to a cloud-based version of the SIM cards which are currently in every phone on planet Earth.

So why are eSIMs such a problem for cellular carriers like Verizon, AT&T, T-Mobile and Sprint?  Up until now if you wanted to change a carrier you’ve had to physically remove the SIM card, which usually requires an awkward 10 minutes with tweezers or your longer-than-normal fingernails.  Then you’d have to insert the new SIM card from a different carrier into your phone.  But with an eSIM all you’ll have to do is go to your phone’s Settings page and electronically change out your virtual SIM card.

As a result eSIMs will make it easier to change carriers, which means the Telcos’ “churn rates” (aka customer attrition) will probably go up.  Therefore today’s Apple product launch may not be such a happy day for your phone carrier.

 

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