June 30, 2016

GSMA Mobile World Congress - Agreement on eSIM Launch Possible Next Month

005930 KS, AAPL, GTO NA
By Hartmut Leuschner
Specifications for embedded SIM (eSIM) cards in mobile phones could be launched by July as more OEMs are pushing for 2017 device launches.

Key network operators and device OEMs are expected to meet in the next two weeks to pass specifications for embedded SIM (eSIM) cards in response to growing frustration among OEMs over ongoing delays by the GSM Association (GSMA), the global regulatory body of network operators, to publish necessary specifications for embedded SIM cards in mobile phones that are needed to get the design for eSIM phones started.

Attendees at Mobile World Congress Shanghai said they believe the additional pressure on the GSMA stems from the fact that more device makers are considering eSIM device launches in 2017. Although only Apple Inc. and Samsung Electronics Co. Ltd. (005930 KS) earlier had been said to be involved in the development, sources now believe Huawei Technologies Co. Ltd., ZTE Corp. (763 HK) and Lenovo Group Ltd. have received a blessing from the Chinese network operators to embed non-removable SIM cards into their future devices to enable faster service adoption. 

In OTR Global's May note, sources said the original timing by the GSMA to release the specs in June (as stated on the GSMA website) was unrealistic due to battles between network operators and device manufacturers over production, sourcing and testing responsibilities, and sources thought delays could extend into September or even December. One component supplier said he believes the threat of a further delay caused enough protest among OEMs against carriers that an earlier agreement now seems possible. One Mobile World Congress attendee – a solution provider within the SIM card food-chain – said he heard the key players plan to meet within the next two weeks at one of the U.S. carriers' headquarters to get the first set of specifications through. "I think they have split some of the controversial stuff from the topics that are agreeable so that the industry can get started," one attendee said. The source also said the release of eSIM devices in 2017 could be the one innovation in the handset market that could revitalize device sales.