eSIM technology has been transformational in many industries, from enabling a wide range of industrial IoT use cases to simplifying roaming experiences. Travel eSIM, a particularly fast-growing segment within eSIM applications, is especially promising for Mobile Network Operators (MNOs) looking to provide easier and more profitable travel connectivity to their users. In fact, Kaleido Intelligence estimates the travel eSIM market is projected to reach $10 billion retail spend by 2028, with an additional $6 billion in wholesale revenues for mobile operators from a wholesale perspective; this truly is an unmissable opportunity for MNOs.
But what exactly is travel eSIM and how can MNOs position themselves best to make the most of it? Read on to find out more.
What Is Travel eSIM?
Travel eSIM provides an alternative to operators’ roaming services by allowing travelers to download and install a temporary local profile onto their device.
This offers significant benefits to end-users:
- Cost-effectiveness: Using a temporary local profile, users can avoid often-extortionate roaming charges. Kaleido Intelligence’s Q2 2024 survey of 5,000 travelers across 20 markets highlights a strong shift towards travel eSIM for cost saving reasons, particularly in the Asia-Pacific market.
- Convenience: Though traditional travel SIMs do exist, they require users to physically swap SIM cards in their devices, risking losing or damaging their original SIM card. Software-based travel eSIMs provide a simpler and more secure alternative to this.
- Continuity: Given the high costs of roaming, many users deactivate their original profiles when traveling abroad, resulting in them not receiving calls and texts to their usual number. With travel eSIM, they can retain connectivity using their normal number.
Considering the upsides, travel eSIM is well positioned to experience growth in the coming years, especially with the full return of tourism and corporate travel. In 2024, international travel is forecast to finally reach pre-pandemic levels, making this the perfect time for MNOs to establish a travel eSIM offering.
The Opportunity of Travel eSIM for MNOs
The rise of travel eSIM is a positive force for operators worldwide. Some of the benefits of integrating it into their operations include:
Increased Revenues
Considering the lower costs associated with travel eSIM versus roaming, it might seem counterintuitive to suggest that eSIM can help MNOs’ bottom line. However, by making it easier to continue using their original providers’ services, users are far more likely to stay connected, rather than switch off their original SIM. This way, MNOs can monetize so-called “silent roamers” and recover up to $6 billion total lost revenues.
At a time when telecommunications revenues are at risk of falling for the sixth consecutive year, unlocking new revenue streams of this size should be a priority for MNOs looking to succeed.
Improved Customer Experience
The importance of customer experience in telecommunications cannot be understated – especially at a time when hyperscalers and technology companies are increasingly competing with traditional service providers. As many as one-third of telco customers are considering switching providers; MNOs must prioritize delivering a faultless customer experience to get churn rates down.
Travel eSIM is a powerful ally in improving customer experience, allowing customers to continue using their devices without any friction when traveling internationally. Crucially, travel eSIM also increases transparency over roaming costs, meaning customers can avoid the fearful “bill shock” – receiving unexpectedly large roaming bills after traveling abroad – and retain higher levels of confidence in their provider, which is crucial for sustaining long-term satisfaction.
Improved Operational Efficiency
The growing complexity of the telecommunications ecosystem – partnerships, services, billing, and more – has rightfully inspired MNOs to streamline their operations as much as possible. eSIM technology is a significant opportunity for simplification, as it decreases the logistical challenges linked to managing SIM card inventories and distributing and replacing physical SIM cards. With travel eSIM specifically, MNOs can provision and monitor roaming services remotely – an easier option for both the provider and the customer.
Over a longer period, travel eSIM might even contribute to the transformation of MNOs’ physical stores. As eSIMs can be distributed virtually, there is less of a need for customers to visit brick-and-mortar stores, meaning MNOs can shift their focus to having a stronger online presence and streamline operations significantly.
How Can MNOs Set Themselves Up for Success?
The benefits of establishing an eSIM offering are significant, but the process is not without its challenges. To capitalize on this burgeoning market, MNOs need a comprehensive understanding of customer preferences and devise a reliable strategy for aligning them with their current operations.
If you’re looking to gain a deeper knowledge of travel SIM and its potential for your business, watch the recording of our two-part webinar with Kaleido Intelligence here.
During the free webinar series, we’ll delve into the key findings of Kaleido’s new survey of 5,000 international travelers and what they tell us about the necessary components of a strong MNO travel eSIM strategy.
Here’s a taste of what you’ll learn:
- The impact of travel eSIM on mobile roaming revenues
- How to monetize silent roamers with travel eSIMs
- The role of 5G roaming in the travel eSIM era
- Technical and operational challenges in transitioning to eSIM
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