One of the reasons 5G is so important to cellular providers is that it allows them to connect more devices to their networks. However, in many cases, the connection will be made without a SIM card, the famous “chip” found in the wireless sold in Canada. Now would be a good time for the industry to get rid of these chips, once and for all.
For once, both consumers and providers would benefit from technological change in the wireless sector. Even the government would benefit from it!
Good for the consumer
Especially since an alternative solution to SIM cards is already indicated: it is a solution called eSIM for “embedded SIM” (free translation). Basically, it’s like permanently grafting a SIM to the mobile device, except that this eSIM can accommodate up to five virtual SIMs at the same time.
The practice is not very popular in Canada, but in markets where competition between providers is fierce, it is not uncommon for consumers to use two SIMs in the same phone. For example, one can be used for calls and texts with one provider and the other is associated with a more affordable data plan with another provider. Or, one is registered in one country and the other in another location to save roaming or long distance charges.
With an eSIM card on board, a phone owner doesn’t have to visit a store or speak to a customer service agent to switch carriers. Everything can be done on the screen of the device, where you can see the compatible services and the packages they offer.
The winning government
Increasing the consumer’s power to choose makes the market more competitive. It’s that simple. This is something that the Canadian government has been saying for years now: if we want to see the prices of telecommunications services fall in a sustainable way, we have to stimulate competition.
Competition can take many forms.
Prior to COVID and the extended border closures, the fastest growing portion of Canadian wireless provider revenue was overage charges and roaming charges. Overage charges are those you pay when you use more minutes, messages or mobile data than your monthly plan provides. Roaming charges are those billed when you use your phone outside the coverage area of the network to which it is associated.
The two together brought in around $1.2 billion annually to providers between 2016 and 2019. The introduction of “unlimited” plans this
that year, shortly after the imposition of a cap on excess charges, reduced the importance of this source of revenue which, before the pandemic, still represented approximately 5% of total wireless revenues.
Now that travelers are getting back to their habits, it’s a safe bet that roaming charges will return to fatten the coffers of Canadian providers. However, if we swapped the SIM card for an eSIM card, wireless users could pay for a temporary local plan where they travel, and save a lot of money.
Providing affordable ways to circumvent overage charges is one way to make the wireless market more competitive.
Also good for suppliers
Wireless providers will rely on eSIM technology to propel the market for connected objects, which is struggling to take off because consumers do not see the point. With good reason: given the price you have to pay to connect even a smartwatch to a wireless network, no one will dream of connecting more than the minimum required, which is a telephone, and little more.
With eSIM technology, suppliers will be able to create tailor-made reduced plans for connected objects with limited functions. Consider a surveillance camera for the office or home. Or weather sensors for farmers.
But there is more: eSIM technology could help providers to reduce their environmental footprint in a concrete and calculable way. Because the production and use of an eSIM rather than the SIM card results in a 46% reduction in greenhouse gas emissions across the entire supply chain in the wireless market.
Each eSIM card produced as a replacement for a SIM card avoids the emission of 106 grams of CO2. Not much, you might say, but do the math: 1.4 billion phones are sold worldwide every year. There are currently more than 9 billion active SIM cards.
Canada has emission reduction targets. Large Canadian companies have commitments too. Canadian wireless service providers have their own targets. Of course, there are a multitude of other ways to reduce their carbon footprint, and managing their infrastructure is a more important one.
But by adopting the eSIM card, they would not only be taking a small step in the right direction, but also making everyone happy, including their customers and the government.