Embedded SIM cards come to New Zealand
Spark has launched New Zealand's first "eSIMs" for mobile phones and has perhaps unwittingly introduced a radical shift in the dynamic between customers and providers.
The SIM card is the brain of the phone, containing those details needed to connect a user's account to a particular network operator. Since the death of the CDMA-based networks, and the total domination of the GSM-family of phones, SIM cards have been a key component of both marketing and service deployment.
When Vodafone took over BellSouth's assets in New Zealand and launched on the market here its point of difference was that with a SIM card-based service, customers could swap handsets whenever they wanted and lose none of the functionality. Telecom, with its business-focused CDMA network, could not offer such flexibility and in the marketing war that followed Vodafone won the lion's share, especially in the fast growing youth and consumer segments.
But while SIM cards make it easy to swap handsets, and stay with the same network operator, the world has moved on since the advent of the smartphone the focus has shifted and the primary customer relationship is with the operating system vendor rather than network provider. Today it's easier to swap networks than it is to swap OS because users have generally spent money on non-transferable apps, games, books, music and other forms of content.
Enter the eSIM or "embedded SIM card" which isn't a card at all. Instead, the phone is authorised to connect to a particular network by means of a electronic signature contained within the device. This allows phone makers to do away with SIM card slots and readers, which are increasingly taking up valuable real estate inside the device.
It also means the network operators can allow the same phone number to be used by multiple devices - say a smart phone and a smart watch - allowing great usability and flexibility for the customers.
However, it also opens a new possibility that may not be quite what the network operators intend: network flexibility for customers on a scale never before seen. Embedded SIM cards and number portability mean the user can decide to switch network providers on a whim, taking all their valuable user data, and spending power, with them.
Users could decide to swap from one network to another based on special offers, on price, network coverage (say for example when roaming overseas), or on their own requirements for the day. If another network offers better data rates on the day you want to work remotely then swap to that network and swap back to the voice-friendly network for the day when you're making a lot of calls.
Developers will no doubt rush to assist with apps that automatically scan available networks for criteria set by the user (speed, quality, cost) and connect accordingly.
New Zealand's current number portability regime won't allow such a dynamic environment and no doubt will need to be upgraded to cope with daily or even hourly migration (or the numbering scheme scrapped altogether) but with the introduction of eSIMs one more tie between network operator and customer has been severed.
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