White SIM: Cool technology doesn’t always bring a commercial benefit

Gwenn Larsson Gwenn Larsson

Maybe you’ve heard lately about a concept called ‘white SIM’ or a SIM that allows for ‘remote personalisation’. (Caution, says Gwenn Larsson: Don’t confuse this with yet another concept called ‘late stage provisioning’.) I am sometimes asked about this by our partners (and, due to the coaxing of our partners, our customers) and I think it’s a good idea to get the industry thinking about the advantages versus the disadvantages of this GSM Association-endorsed concept. Because right now I only see companies with specific interests in selling more product, promoting the advantages and not explaining the possible disadvantages.

Basically, like many people in the telecoms industry, I think it’s technically cool, but commercially stupid. I mean, technically it works. Commercially it makes no sense. Not for most M2M industries anyway, nor for the customers that turn to Telenor Connexion to deliver their business- and life-critical M2M and telematics solutions.

So, the concept of the ‘white’ SIM as it applies to M2M is to allow a user to change the network access credentials to a SIM (subscriber identity module) card after it is already embedded into a wireless module, and perhaps has reached its final destination. This will, in theory, give OEMs (original equipment manufacturers) and enterprises more flexibility to choose the network operator providing the connectivity services after the M2M solution is deployed in the field.

The main driver behind this is anticipated cost savings for the data transfer, but I am struggling to find where the true cost savings lie – as it applies to most industries using machine-to-machine (M2M) technology.

For instance, car OEMs don’t want to negotiate 20+ roaming agreements across Europe so they can provide drivers with the same services at the absolute cheapest price as they drive across borders. Nor do car drivers want the hassle of selecting a new service provider for their telematics services as they drive from France into Germany. And neither do fleet management companies. Come to think of it, neither do asset management companies.

These types of companies purposely choose a SIM that can roam globally to reduce internal costs related to signing and negotiating service delivery contracts. One telematics service provider allows them to receive one bill and have predictability of costs. And maybe most importantly it allows them to have a consistent service level and KPIs (key performance indicators). Imagine the SLA (service level agreement) nightmare caused by a white SIM?

Global connectivity solution providers like Telenor Connexion, attract customers by having a premium service with simplified logistics offering at a fair price, topped off with a high level of support. Companies that are implementing business- and life-critical solutions cannot bet on the uncertainties of multiple operators providing connectivity for their solution. Who will be responsible for maintaining the highly reliable services needed in Daimlers, or Scania’s fleet management systems, if the vehicles are set–up and require their drivers or system operators to switch to a new ‘lower cost’ operator in each region into which they drive?

Would any of the car OEMs want to have an embedded SIM providing eCall services for which they had no single point of contact for connectivity failure? Did someone forget that embedded connectivity solutions are much more complicated, requiring a much higher service and support level than SIMs in consumer phones?

White SIMS are great for consumers using consumer applications – such as their iPhone or iPad(R) – or portable Sony Playstations(TM). But the average OEM or enterprise implementing an M2M or telematics solution probably won’t benefit commercially.

It’s important that the industry recognises the differences between machine-to-machine solutions and the cost model for implementing services versus the consumer model and behaviour. Especially in Europe, at least, where the cost of roaming between operators continues to decrease at a steady pace – thereby eliminating the need for any type of ‘white’ SIM. Remember that today most value-generating telematics services don’t have ‘the data’ as a significant cost driver! So let’s not get too caught up in cool technical solutions before we understand the true impact they have on the industry.

By Gwenn Larsson (pictured), CMO, Telenor Connexion

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