The Growing Influence of eSIMs: Convenience for Travelers, Challenges for Operators

With the increasing demand for international travel—both for business and leisure—eSIM technology has rapidly gained popularity. An eSIM (embedded SIM) is a digital SIM card integrated into a device, eliminating the need for a physical SIM while providing seamless mobile network connectivity. Functionally, eSIMs offer the same capabilities as traditional SIM cards, but their adoption has introduced both significant benefits for travelers and financial challenges for network operators.

Why Are Travelers Adopting eSIMs?

Travelers are gravitating toward eSIM technology for several key reasons:

• Seamless Connectivity and Convenience – eSIMs eliminate the need for physical SIM cards, enabling travelers to seamlessly switch between operators.
• Cost-Effective Plans – International eSIM providers offer flexible, tailored plans that are often more affordable than traditional roaming packages from mobile operators.
• Support for Multiple Profiles – Modern smartphones can store and manage up to 1 to 8 different eSIM profiles, providing users with greater flexibility. They also eliminate the inconvenience of carrying multiple devices, as a single handset can support multiple numbers.
• Growing Adoption of eSIM-Only Devices – Many smartphone manufacturers are now releasing eSIM-exclusive models, accelerating the transition to digital SIM technology.

A 2024 market survey conducted by Kaleido Intelligence highlights these benefits, showing that both business and leisure travelers are increasingly opting for eSIMs as a viable alternative to conventional roaming plans.

Kaleido predicts that travel eSIM subscriptions will account for around 22% of global trip volume by the end of 2028, up from an estimated 8% in 2024. Digital SIM (eSIM) travel plan adoption will grow at an average annual growth of 47% over the next five years, driven primarily by the migration from physical SIMs to eSIM-based travel plans as well as the continued availability of cheaper data plans. The average data usage per trip by the eSIM outbound roamers was projected to be approximately 2.8 GB in 2024, increasing to 3.8 GB per trip by 2028. Based on the projected volume of travel eSIM-based trips, the forecast is that data usage will reach just under 2,150 billion MBs by 2028, equivalent to approximately 2,000 PB (petabytes).

Revenue Implications for Network Operators

While eSIMs offer clear advantages for consumers, they present several revenue-related concerns for network operators. Key challenges include:

• Exploitation of Roaming Agreements – Some visited networks have established favorable roaming agreements with specific partners, who also act as international eSIM providers. When roamers from other networks purchase eSIMs from these providers, they benefit from lower roaming costs, reducing the revenue the visited network would have otherwise gained from direct roaming.
• Retail Bill and Keep Model Risks – Some mobile networks enter partnerships where they retain the full revenue generated from their roamers without paying wholesale charges to each other. If a partner network also operates as an international eSIM provider, roamers from other networks may purchase their eSIMs, leading to revenue leakage for the visited network.
• MVNO Competition – Mobile Virtual Network Operators (MVNOs) affiliated with visited networks can sell eSIMs with lower-cost roaming plans, drawing inbound roamers away from the primary network (MNO). This results in lost retail revenue as travelers choose MVNOs over traditional network providers.
• 3^rd party eSIM Mobile Apps – Many third-party eSIM providers like Holafly, Airalo, Keepgo etc., partner with global mobile operators to offer eSIM services to roamers. Operators typically allocate a range of IMSIs to these eSIM providers, enabling them to deliver connectivity. When an inbound roamer using a third-party eSIM latches onto an MNO’s network, the roaming revenue is redirected to either the roaming partner or MVNO, depending on the provider’s agreements, leading to potential revenue loss for the MNO.

Strategic Insights for Operators

To effectively address these challenges, network operators must develop a comprehensive understanding of eSIM roaming patterns. This involves identifying the number of inbound and outbound roamers utilizing eSIMs, allowing operators to gauge the scale of eSIM adoption within their network. Additionally, it is crucial to recognize MVNOs that may be diverting retail roaming revenue by offering eSIMs to travelers, potentially impacting traditional roaming business models. Operators must also assess which partner networks are simultaneously serving as international eSIM providers, as they may be leveraging existing roaming agreements to their advantage. Furthermore, understanding the primary countries from which travelers arrive with eSIMs can provide valuable insights into market trends, helping operators refine their strategies to optimize revenue and customer experience.

eSIM Detection Solutions

To effectively tackle these challenges, eSIM detection solutions must empower Mobile Network Operators with the essential tools to monitor and mitigate potential revenue leakage. By analyzing roamer travel data, these solutions should enable operators to accurately identify eSIM usage, track activity patterns, and assess their overall impact on revenue streams. To achieve this, eSIM detection solutions must ensure the following:

• Revenue Protection – Detect and minimize revenue loss caused by MVNOs and roaming partnerships.
• Enhanced Decision-Making – Provide actionable insights into eSIM usage trends based on geography, device type, and time, enabling operators to make informed strategic decisions.
• Operational Efficiency – Seamlessly integrate with existing network infrastructure, minimizing operational disruptions while maximizing effectiveness.
• Optimized Roaming Strategy – Help operators identify opportunities to enhance roaming profitability while maintaining a high-quality experience for travelers.
• By leveraging these insights, operators can take proactive measures to protect their revenue and refine their roaming strategies in the evolving eSIM landscape.

Conclusion

The widespread adoption of eSIMs is transforming international roaming, offering travelers cost-effective and flexible connectivity options while challenging traditional operator revenue models. To navigate this evolving landscape, network providers must leverage data-driven strategies and analytics solutions to monitor eSIM adoption and its financial impact on the business. By proactively addressing these challenges, mobile operators can maintain a sustainable balance between consumer demand and revenue protection in the digital age.