eUICC, a disruption in the SIM market

NEW YORK, March 6, 2013 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:

eUICC, a disruption in the SIM market

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Executive Summary

The mobile telecommunications industry undergoes permanent dynamic development and evolution. Speeds are increasing, value-added services expand revenue sources, prime costs are being reduced, and many other aspects are being optimized. The SIM card, one of the core features of mobile telecommunications industry is also subject to the optimization process. Evolving from bank card size, to plug-in, micro- and nano-SIM cards, the subscriber identity module is expected to be reduced even more changing from a removable physical form factor to an embedded one. Performances of secure transactions industry players allow further miniaturization of SIM cards, while ensuring the best level of security. Embedding SIM card into mobile communication device completely coincides with current trends of smooth look and enhanced functionality of high profile mobile handsets. Not only mobile embedded SIM (or eUICC) is expected to free valuable space in popular communication devices, it will also ensure more flexible control and handling of key communication and additional services. Remote management of secure identity module bids fair to bring more business opportunities to the whole value chain. Indeed, machine-to-machine (M2M) market, which has already adopted embedded M2M form factor (MFF2), clearly shows the advantages that soldered subscriber identity module brings to the ecosystem stakeholders. In the M2M ecosystem, the MFF2 benefits all affected parties, including the supply chain, mobile network operators and companies that opt for M2M technology. However, mobile eUICC adoption is not going to pass easily as it is set to reshape the current removable SIM ecosystem. While being a lot similar to the actual SIM in terms of functions, the eUICC will change the structure and the way SIM card vendors and mobile telecommunication industry players, third parties and, finally, end users interact with each other. Moreover, such a reshape prescribes the introduction of new roles and the arrival of new entrants as well. The new embedded form factor also raises diverse technical and legal questions, with security and ownership rights issues being among them. Depending on how these issues will be tackled, there will be different operating modes of eUICC ecosystem with new roles and new players to gamble their material wellbeing on the matter. Undoubtedly, controversy on new business models that will rely on eUICC hurdles straightforward standardization and implementation of the technology. Taking into account the strengths and weaknesses of major players, Smart Insights has defined four scenarios that the industry may undergo. The probability of each scenario described in the report depends on key business advantages that each stakeholder anticipates from the eUICC adoption. In addition, the same stakeholders, fearing the shift of power coming with the eUICC adoption, may be tempted to build upon their current situation to hinder the implementation of the technology. MNOs are believed to resist the transition from removable SIM to an embedded module, which eventually may negatively impact their core business. However, our field research found that some MNOs do believe in business opportunities that come with eUICC adoption and thus come out for its implementation. Handset makers alike other third parties are also expected to take advantage of the eUICC opportunity. Nonetheless, Smart Insights forecasts that adjusted removable SIM card shipments will continue to grow at a CAGR of 6%-12% depending on different eUICC adoption scenarios analyzed in the report. The wide adoption of eUICC is not foreseen in the scope of the covered period, but rather in the long-term future. The report provides forecasts on eUICC shipments and adjusted removable SIM card shipments in volume. The analysis was conducted based on primary and secondary research, the technical and business expertise of semiconductor and SIM card manufacturers, mobile network operators and handset makers, as well as industry associations and standardization bodies that were interviewed anonymously for the purpose of this report.

Table of Contents

Table of contents 7

Table of Illustrations 11

1 Removable UICC 15

1.1 Overview 17

1.2 UICC roles 17

1.3 SIM / UICC Architecture 18

1.4 SIM functions 20

1.5 SIM card contains 21

1.6 SIM card form factors 22

1.7 GSM network architecture 23

1.8 Removable SIM advantages 24

1.8.1 For end-user 25

1.8.2 For MNOs 26

1.8.3 For supply chain 27

1.9 Customer Care 28

1.10 UICC / USIM standards 29

1.10.1 Core specifications 29

1.10.2 Test specifications 29

1.11 SIM card shipments 30

1.12 Market description 33

1.12.1 SIM Manufacturers 33

1.12.2 MNOs 34

1.12.3 Mobile Handsets Manufacturers 36

2 M2M eUICC 41

2.1 Overview 43

2.2 M2M SIM vs. mobile SIM 46

2.3 eUICC notion 47

2.4 M2M eUICC advantages 48

2.4.1 For end-user 48

2.4.2 For MNOs 48

2.4.3 For supply chain 49

2.5 M2M eUICC remote subscription management 49

2.5.1 M2M SIM provisioning use cases 49

2.5.2 M2M SIM subscription management 50

2.5.3 M2M eUICC remote subscription management 51

2.5.3.1 Connected consumer electronics 51

2.5.3.2 M2M communications identity module concept 52

3 Mobile eUICC 55

3.1 Overview 57

3.2 eUICC architecture 59

3.3 Mobile eUICC functions 62

3.4 Mobile eUICC advantages 63

3.4.1 For end-user 63

3.4.2 For MNOs 63

3.4.3 For eUICC supply chain 65

3.4.4 For handset manufacturers 66

3.4.5 For service providers 66

3.5 Mobile eUICC disadvantages 66

3.5.1 For end user 66

3.5.2 For MNOs 67

3.5.3 For eUICC supply chain 67

3.5.4 For handset manufacturers 68

3.6 Mobile eUICC issues 68

3.6.1 Challenges for eUICC 69

3.6.2 Challenges for eUICC ecosystem 71

3.6.2.1 Multiple operators access 71

3.6.2.2 Standardization 72

3.6.2.3 Certification 73

3.6.2.4 OTA interoperability 73

3.6.2.5 End user relationship 73

3.6.3 Security issues 74

3.6.4 Owner rights issues 74

3.6.5 GSMA eUICC requirements 75

3.6.6 ETSI use cases 76

3.6.7 SIMalliance recommendations 77

3.7 Mobile eUICC ecosystem potential players 77

3.8 Mobile eUICC remote subscription management 81

3.8.1 Current mobile UICC subscription provisioning 81

3.8.2 Mobile eUICC lifecycle states 82

3.8.3 Remote subscription management 82

3.8.3.1 Dynamic SIM allocation 82

3.8.3.2 Remote eUICC subscription management 86

3.8.4 Authentication key provisioning 88

3.8.5 LTE OTA platform 89

3.8.6 Benefits of remote subscription management 90

3.9 eUICC adoption scenarios 91

3.9.1 Scenario #1 – MNOs control eUICC 91

3.9.2 Scenario #2 – handset makers push eUICC 95

3.9.3 Scenario #3 – Android OS maker pushes eUICC 100

3.9.4 Scenario #4 – third parties push eUICC 103

3.9.5 Possible provisioning models 108

3.10 Customer Care 109

3.10.1 Customer care in mobile eUICC ecosystem 110

3.10.2 Remote mobile device management 111

4 Hypothetic scenario – UICC dematerialization 113

4.1 Soft SIM 115

4.2 Trusted execution environment 115

5 Regulatory aspects 117

5.1 Overview 119

5.2 ETSI 120

5.3 GlobalPlatform 121

5.4 GSMA 122

5.5 SIMalliance 123

Table of acronyms 125

Table of Illustrations

Illustration 2 Functional architecture of mono-application card vs. multi-application platform 19

Illustration 3 SIM form factors comparison 22

Illustration 4 GSM network architecture 23

Illustration 5 Volumes of SIM card shipments 30

Illustration 6 SIM card shipments by region, 2011 31

Illustration 7 SIM card shipments by form factor, 2011 31

Illustration 8 Number of network subscribers worldwide, 2009-2015 32

Illustration 9 Top ten MNOs by subscriptions number 35

Illustration 10 Top ten mobile handset manufacturers, 2011 36

Illustration 11 Top ten mobile handset manufacturers, 2011 (#2) 37

Illustration 12 Mobile handset shipments, 2010-2011 (#3) 37

Illustration 13 Top five smartphone manufacturers, by global sales, 2011 (#1) 38

Illustration 14 Top three smartphone manufacturers, by global sales, 2011 (#2) 38

Illustration 15 Top five smartphone markets, by country, 2011-2012 and 2016 39

Illustration 16 Connected devices number, 2011 43

Illustration 17 Connected devices number, 2020 44

Illustration 18 Connected devices revenue opportunity, 2020 44

Illustration 19 M2M market CAGR 45

Illustration 20 Wireless M2M market, 2015 45

Illustration 21 M2M UICC vs. mobile UICC 46

Illustration 22 Current M2M UICC deployment mode 50

Illustration 23 New M2M eUICC deployment mode 51

Illustration 24 Remote personalization of CCE 51

Illustration 25 Logistics and provisioning processes for eUICC 52

Illustration 26 UICC vs. eUICC main differences 58

Illustration 27 Potential eUICC architecture, #1 59

Illustration 28 Potential eUICC architecture, #2 60

Illustration 29 G&D eUICC 'proof-of-the-concept' 61

Illustration 30 G&D approach to eUICC subscription management 62

Illustration 31 SIM supply chain 65

Illustration 32 Challenges for eUICC ecosystem 71

Illustration 33 Standardization roadmap 72

Illustration 34 Current mobile eUICC subscription provisioning model 81

Illustration 35 Mobile eUICC lifecycle states 82

Illustration 36 Evolving Systems financial results 83

Illustration 37 Evolving Systems DSA solution components and interfaces 85

Illustration 38 Profile management use cases 86

Illustration 39 Profile provisioning with eUICC 86

Illustration 40 Profile changing with eUICC 87

Illustration 41 Remote subscription management roles 88

Illustration 42 Potential regional network evolution, 2020 90

Illustration 43 Remote subscription management (MNO & end user) 92

Illustration 44 eUICC value chain 93

Illustration 45 eUICC shipments, scenario #1 94

Illustration 46 Vodafone financial results 95

Illustration 47 Nokia distribution channels, 2006 96

Illustration 48 Remote subscription management (DV & end user) 97

Illustration 49 Apple financial results 98

Illustration 50 eUICC shipments, scenario #2 99

Illustration 51 Worldwide smartphone shipments by OS, 2011 100

Illustration 52 Google financial results 102

Illustration 53 eUICC shipments, scenario #3 102

Illustration 54 Remote subscription management (SM & EU) 103

Illustration 55 Facebook financial results 104

Illustration 56 Amazon financial results 106

Illustration 57 Groupon financial results 106

Illustration 58 eUICC shipments, scenario #4 107

Illustration 59 Main possible provisioning models of eUICC 108

Illustration 60 End-user customer care poll 110

Illustration 61 Remote mobile device management 112

Illustration 62 Reasons why standardize (MNO point of view) 119

Illustration 63 Reasons why standardize (eUICC manufacturer point of view) 120

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