There were some significant developments in the telecoms market in 2022, and with so much promised for 2023, we look at the three key issues that are set to shape network operators’ business this year and beyond.
1. The new IoT standard takes centre stage
In the first half of 2023, the GSMA is expected to publish it’s widely anticipated new specification SGP.32 for IoT devices. As a leading participant in GSMA Working Group 7, Workz has played an active role in the development of the new IoT standard. It extends the eSIM SM-DP+ model developed for consumer devices to constrained devices, like smart meters, which do not have a user interface to manage their connectivity. The main benefit of this is simplified deployment with the removal of the laborious demands placed on operators by the current M2M model.
As both models have distinct architectures there will be no forward compatibility between the two. As a result, it is expected that once the new standard is launched that many M2M providers will review their operations and vendors as they start over from the ground up. We have already seen several M2M projects put on hold in 2022 as providers await the new standard to avoid interoperability issues, retrospective changes and remedial work. SGP.32 is set to unblock these projects and ultimately, become the de facto standard for IoT/M2M having a hugely positive effect on eSIM deployment in the enterprise space.
New standard set to grow enterprise IoT
2. eSIM 2.0 becomes a real thing
Last year, Apple went eSIM-only and more and more OEMs, most notably, in the mid-price sector, helped propel eSIM to the masses. In turn, this led to many network operators quickly jumping on the opportunity created by greater market penetration. In the USA for example, telcos offering eSIM grew more than 300% within just six months, whilst across the globe, the number MNOs offering eSIM services increased to around the 260 mark. Emerging markets also showed an uptick in selling eSIM, with many operators leveraging the scalability of cloud platforms to establish a crucial early market foothold for their brand.
The companion device market will continue to grow. According to Counterpoint Research late in 2022, the smartwatch sector showed double-digit growth for five consecutive quarters making it the fastest-growing consumer segment. This boom in cellular-capable devices means that telcos have a bigger opportunity than just the smartphone by harnessing the power of an entitlement server.
As market penetration of eSIM intensifies in 2023, one of the key challenges for those offering eSIM services will be how they manage subscribers at scale. The answer is eSIM 2.0 solutions which will enable network providers to able to manage eSIM at scale, just like they do traditional products e.g. multi-sourcing, sales channel enablement, provisioning of next-generation devices, and streamlined subscriber management in both consumer and enterprise segments.
eSIM 2.0 solutions
3. Chip supply improves... just a bit
As the latest industry reports show approximately 10% fewer physical SIMs were produced in 2022 than in 2021 as a result of COVID. Chip manufacturing is expected to remain tight in the first half of this year as the Chinese New Year and lockdown disruptions affect Chinese output, and bottlenecks caused by wafer testing capacity being unable to meet the expected number of wafers being produced. Nevertheless, by H2 2023 we hope to see some improvement as some chip providers re-enter the telecoms market again, China eases lockdowns, and suppliers start increasing capacity.
That’s it for our look into our crystal ball, what are your predictions for 2023? Feel free to let us know in the comments below. Alternatively, if would like to discuss the new IoT standard, eSIM 2.0 solutions, SIM chip supply or your plans for 2023 then please reach out to us using the contact button below.