eSIM isn’t a new technology. It was introduced fourteen years ago in 2010 as part of the Internet of Things revolution. While eSims have become incredibly common in the West and other markets, their adoption in India has been sluggish. We know that switching to eSim can lead to a number of benefits for both consumers and telecom companies, so what’s the hold-up?
In this article, we’ll be exploring what exactly went wrong with eSIM adoption and understanding what it takes for a switch in the future. Let’s get right to it.
Why is eSIM Worth Adopting in the First Place?
There are several reasons that make eSIM superior to its older, physical card version. For one, it allows you to switch network providers without needing to change SIM cards.
This makes it perfect for frequent fliers, which is a common requirement for those in certain businesses. As eSIM India explains, many packages exist that eliminate expensive roaming fees when traveling abroad.
Adopting eSIM is also excellent for reducing supply chain costs, and that’s a big plus, especially for companies trying to push green initiatives. eSIM cards also offer a much faster activation, which is an added benefit. With physical SIM cards, depending on the carrier, you often have to wait at least 24 hours for activation.
eSIMs also have much better security than traditional SIM cards and are harder for hackers to attack. You can thank features like remote provisioning and clone resistance for this.
However, with our reliance on conventional SIM cards, we still run into problems with scammers abusing the system. Earlier this year, police teams in Kerala recovered around 40,000 SIM cards in connection with fraudsters. These instances would be easily mitigated if a switch to eSIM had been made in the country.
There were just a few key benefits, but they remain untapped for one key limiting reason.
The Hardware Limitation Factor
On the surface, it might seem like telecom companies are at fault, but that’s not the case. All the major operators like Vodafone-Idea, Airtel, and Reliance Jio have the ability to support eSIM features. However, why don’t they? The key reason lies in the kinds of smartphones that the Indian market uses.
The Economic Times recently pointed out that smartphones manufactured in China are hesitant to support eSims out of security concerns. As a result, only 10-15% of smartphones in India currently support eSim technology. This small percentage comes from devices released by manufacturers like Samsung, Google, and Apple.
The mobile budget segment largely comes from Chinese manufacturers like Xiaomi. Realme, or Vivo. Of course, even flagship products from these companies don’t support eSIM since it’s a security-based restriction.
Thus, we end up with a situation where eSIM is widely neglected in the country despite the fact that the benefits they offer are well known. eSIM adoption would be faster if we saw a shift from Chinese smartphones to local manufacturers. This brings us to another important aspect.
Failure of Indigenous Design, High Competition, and More
It’s no secret that, at the moment, China has captured the smartphone market. There was a time when people thought otherwise. You had brands like Micromax, Lava, and Karbon marketing themselves as Indian brands. However, they were simply rebranding or assembling phones in the country.
This reality hasn’t gone unnoticed by the Indian government, which allocated Rs. 1.97 lakh crore for manufacturers to produce handsets within the country. However, it still doesn’t address or incentivize entrepreneurs to conceptualize and design original products. Instead, it only seeks to replicate China’s success as a manufacturing hub.
Even powerful companies like Sony massively scaled down their investment in their Xperia lineup after being outcompeted by Chinese products. Thus, it seems like eSIM adoption will increase in only a few scenarios.
The most plausible one would be China relaxing its restrictions for export smartphones. The second scenario would be the Indian consumer base switching to non-Chinese-made smartphones. This would be possible if companies like Apple, Samsung, and Google started to target the budget segment more effectively.
The third scenario would involve the rise of an indigenous smartphone industry and an era of locally made smartphones that can compete with Chinese and Western brands.
All things considered, eSIM cards represent one more feature that many Indians have been denied for one reason or another. It’s also not the only instance of this happening. NFC never really took off here. Sure, we made do with UPI and QR codes for payments, but NFC would have been a nice-to-have thing.
From an investor standpoint, there’s a lot to be gained if the focus can be shifted to the need for more indigenous manufacturing. Hopefully, this is something the government will start looking at more seriously.
