March 5, 2025

MWC: Day 3 Recap

On Day 3, we shifted our focus to eSIMs and MVNOs, two areas experiencing significant growth. Unlike some of the topics covered in previous days, these technologies are already widely deployed and demonstrably successful. We were eager to explore the latest updates and insights in these growing and increasingly mature markets. It was also interesting to recognise the strong connection between these two distinct area

Many thanks again to Luanna and Tony, who’ve been attending the talks and whose insights have helped shape today’s newsletter.

eSIMs

eSIMs have always clearly been a disruptive technology, though it’s hard to believe the first steps toward this began as far back as 2013. The benefits of replacing plastic SIMs with eSIMs are evident for both telcos and consumers, and eSIM is now a reality. While there’s still room to grow, eSIM has a strong foundation, with 271 devices launched, 441 operators, and 123 countries rolling out eSIM solutions. Here are some of our key takeaways from today:

  • Despite strong numbers, growth has been slower than expected—except in the US, where the launch of eSIM-only iPhones in 2022 has significantly accelerated adoption. This approach, and the growth it has driven, is likely to be replicated elsewhere in the near future. By 2030, eSIM is expected to reach a 76% global penetration rate.
  • Travel eSIM has been one of the most prevalent and disruptive use cases, enabling users to access mobile services in international destinations where traditional roaming is often prohibitively expensive and unpredictable. Many Mobile Network Operators (MNOs) are entering the eSIM market themselves to further monetise inbound roaming, though they may also be concerned about the loss of outbound roaming revenue.

However, this outbound challenge can be addressed with competitive roaming offers. Traditional roaming remains the most seamless experience for users, but pricing must allow them to use it with confidence. Operators looking to protect outbound roaming revenues will need to step up their game to remain competitive and mitigate the impact of travel SIM disruption.

  • One of the main concerns operators had about eSIM was that the ease of switching networks would lead to higher churn. However, with years of experience now behind us, this doesn’t seem to be the case. Despite how easy it is to change SIMs, consumers still face significant barriers to switching networks, such as billing plans, contracts, and other logistical factors.
  • Some see eSIM as a way to circumvent permanent roaming regulations by switching eSIM profiles—an interesting and strategic use of the technology.
  • The importance of IoT was a recurring theme. One of eSIM’s key advantages in this space is the ability to switch providers remotely, offering much-needed flexibility for future IoT deployments. Of course, this does nothing to address the millions of IoT devices already deployed without eSIM, but ensuring new deployments adopt this technology helps avoid adding to the existing operational challenges.

Overall, eSIM appears to be on an impressive trajectory, finally delivering on much of its long-promised potential.

MVNOs

We have many MVNO customers, primarily the more established players in both the consumer and IoT sectors. However, the market is seeing a surge in new MVNOs, and we gained insight into some of the key drivers behind this growth.

  • eSIM has been a key driver behind the rise of new commercial MVNOs, enabling greater operational efficiency without the logistical burden of distributing plastic SIM cards.
  • Regulatory interventions are driving prices down and lowering ARPU, creating opportunity for OPEX optimisation. eSIM can play a key role in this, and MVNOs – often free from the accumulated operational bloat of established Mobile Network Operators – are well positioned to take advantage. By targeting specific niches, MVNOs can capture new opportunities and operate with incredible efficiency.
  • eSIM has removed some of the traditional technical entry barriers, paving the way for non-telco challengers and the rise of digital MVNOs. As a result, we’re seeing more non-telco brands entering the market and expanding their offerings in this space.
  • ‘One size does not fit all’ – the growing diversity of connectivity use cases in terms of price, quality, and coverage presents a challenge for large MNOs to manage effectively. This has opened the door for MVNOs to carve out niche markets, where they can build a dedicated customer base and thrive. An interesting term emerging for this trend is ‘Teltech’, an area worth watching in the coming years.
  • There has been a huge rise in ‘Brand MVNOs’, as large brands leverage the low barriers to entry enabled by today’s technology to stay front-of-mind for their customers. Airlines, banks, and supermarkets have launched their own MVNOs, and even influencers and celebrities are successfully entering the space with their personal brands. This trend is set to grow, with traditional MNOs increasingly shifting toward a service provider/connectivity provider role.
  • Several MVNOs are differentiating themselves in the market with a unique selling point. Some retailers have tied their MVNOs to loyalty programs, while others offer charitable donations as a perk. Others have focused on roaming solutions, catering to travellers looking for seamless connectivity.
  • We have even seen sports clubs get in on the act, with Barcelona FC launching their own MVNO: https://www.sportspro.com/news/nevg-barcelona-barca-mobile-camp-nou-november-2024/

Overall, MVNOs are experiencing rapid growth and diversification, driven by new technology, evolving consumer needs, and shifting industry dynamics. As barriers to entry continue to fall, we can expect more innovation and competition in this space.

It’s been an insightful three days at MWC, with plenty of discussions, trends, and challenges to think about. There’s still more to reflect on, and we’ll be back soon with more thoughts. Chat soon!

Dan, Tony, and Luanna

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March 5, 2025