Out With The Carriers, In With The Handset Makers?
I feel like there is something I’m missing here:
European chipmaker STMicroelectronics NV dropped a heavy hint about eSIMs at an investor day in May, saying it expected to deploy its own device in a major mass-market smartphone by the end of the year. Whether it’s talking about this year’s iPhone will become known on Wednesday, but it’s hard to see how the mobile phone operators can resist this technology for long given its usefulness for consumers. Apple will certainly argue it that way. It’s already used in some iPads, and STMicro supplies an eSIM for the Apple Watch.
Apple can’t totally dismiss the concerns of the big phone carriers. After all, they spend huge sums on marketing the iPhone, and sell it in their stores. But the California giant is willing to throw its weight around, as shown by the DoJ complaint.
While the eSIM might reduce some logistical costs for carriers such as Verizon and AT&T, in the longer term it will become harder to differentiate between network providers. As Northstream telecoms consultant Bengt Nordstrom says: “From a user perspective, if you ask what service they’re using, they’ll say they’re an iPhone or Samsung user, not the operator.”
Whether the SIM card is physical or not physical, wouldn’t the carriers still have the ability to decide which phones to allow or not allow on their networks? I mean, Verizon didn’t even have SIM cards for the longest time, and if anything having a physical SIM card should make it easier to skirt their rules. The GSM carriers, which have always relied on SIMs, have historically been far more open than CDMA carriers which didn’t. Further, regardless of what Apple can and cannot do with SIMs, you still have the basic incompatibilities between the two largest carriers. You can unlock an AT&T phone to play on T-Mobile’s netwrok, but you not Verizon’s.
But if the carriers are fighting eSIMs so far, there has to be a reason, right?
This is one area where I am something of a radical on the subject. I don’t think carriers should be allowed to keep phones off their network, or prevent them from reading SIMs physical or otherwise. I do, however, feel somewhat less passionately on the subject now than I did then. The proliferation of discount carriers has lead to competition of a sort. My phone will only work on AT&T’s network, but there are a number of carriers competing with one another to give me minutes. That may be the future of the industry as a whole, though AT&T and Verizon are holding back some key features (most notably mobile hotspot) for their own customers.