October 13, 2014, Dubai, UAE: Leading mobile operators, SIM vendors and module manufacturers are now deploying solutions that comply with a new specification, GSMA Embedded SIM, designed to accelerate provisioning of machine-to-machine (M2M) services. New research suggests that the deployment will grow the M2M market by 34% by 2020.
At the Mobile 360 Series-Middle East conference in Dubai, the GSMA today announced that leading mobile operators AT&T, Etisalat, NTT DOCOMO, Telefónica and Vodafone Group alongside SIM and module manufacturers Gemalto, Giesecke & Devrient, Morpho (Safran), Oberthur Technologies, Sierra Wireless and Telit have all launched solutions compliant with the GSMA Embedded SIM Specification for the remote over-the-air (OTA) provisioning of M2M devices. As Jeremy Cowan reports, additional operators and ecosystem partners including Ericsson, Jasper and Telenor Connexion have also committed to launch.
The GSMA represents the interests of mobile operators worldwide, spanning more than 220 countries. Talking to M2M Now ahead of the announcement, Graham Trickey, head of Connected Living at GSMA said, “The specification allows mobile network operators to provide scalable, reliable pure connectivity for M2M-connected devices. Often these are hermetically-sealed, such as in a connected car or smart meter, and the main benefit of the GSMA Embedded SIM Specification is that it defines how you do over-the-air provisioning of the operator solution, how you programme over-the-air an embedded SIM to work on one operator or to switch to another depending on the country that the M2M device is being used in. Having a common global architecture reduces costs and drives efficiencies that will dramatically accelerate the already-growing M2M market.
“What it means is that a manufacturer of devices — or they could be cars, the devices could be big or small — is able to manufacture a single version of their solution which can be used around the world and can be remotely programmed to switch to the operator that the OEM (original equipment manufacturer) wants to use in that country. This is particularly important in the connected car market where you’ll be shipping cars to various countries and it’s much more beneficial if you are connected to a local operator. Also,” Trickey told M2M Now, “when a connected car is sold and perhaps transferred to a different country it’s a lot easier to switch that car to another operator that’s suitable for the new owner. It enables a new class of M2M devices, a single device which can be built once and remotely provisioned to work anywhere across the world.”
“It’s a capability that a lot of the OEMs have been asking for. They want to provide one single solution, and not have to manage inventory in their warehouse or manage inventories of SIMs which they try to configure pre-shipping devices to individual locations. Over-the-air remote provisioning greatly simplifies that and significantly reduces the costs to the OEM,” said Trickey.
“Our vision has always been to unite all stakeholders behind a single, common and global specification that will help accelerate the growing M2M market. It has also been our intention for the GSMA Embedded SIM specification to become the de facto industry standard,” said Alex Sinclair, chief technology officer, GSMA. “Industry-wide adoption sets us on the path for the long-term growth and development of the industry and we welcome the news that the M2M community is ready to do business using the specification.”
Adoption will accelerate the M2M market and support the growth of IoT
A new independent report from Beecham Research titled, Benefits Analysis of GSMA Embedded SIM Specification on the Mobile Enabled M2M Industry, has highlighted that the immediate adoption and deployment of the GSMA Embedded SIM Specification will accelerate the growth of the embedded M2M market by up to 34% by 2020. This will generate approximately US$8.9 billion in connectivity revenues for mobile operators in 2020 alone. Beecham Research estimates that the embedded M2M SIM connection market could reach 639 million connections globally – up from approximately 478 million by 2020 – if the GSMA technical specification is adopted as the de facto standard during 2014-15. Beecham Research anticipates that the automotive sector will be at the forefront of this growth with high adoption also in consumer electronics.
The announcement confirms that the industry is moving towards a single, common and interoperable specification that will accelerate the M2M market, reducing fragmentation caused by proprietary solutions. An independent study by Beecham Research supports this, estimating that the immediate industry-wide adoption and deployment of the GSMA Embedded SIM Specification will deliver 34% higher market growth by 2020.
M2M Now asked Beecham Research’s CEO, Robin Duke-Woolley, how the precise figure of 34% higher market growth was arrived at?
He said: “It is the uplift from 478.8 million connected devices using proprietary eUICC solutions to 639.4 million using the GSMA embedded SIM specification. To calculate this, we have looked at scenarios where only proprietary eUICC solutions are available in the market and then where the single GSMA eUICC specification is available, covering the auto industry for new connected cars, consumer electronics and then ‘Others’. The key benefits of the GSMA spec have been used to conservatively estimate faster growth rates for these three categories.
“In fact, we believe the uplift will be greater than this for a variety of reasons. For example, in the auto sector, having one standard is a real boon for the second-hand car market. This is because cars are often resold in different regions or countries compared with the original owner. That means it is important to have the opportunity to change operator easily. If that is not possible, then those connected car assets installed in the car can become stranded and unconnected. That is very likely to occur with proprietary solutions but we have not reduced the installed base figure for 2020 to reflect that. It means that the proprietary solutions base in 2020 would almost certainly be a lot less than shown, so the uplift using the GSMA spec would be higher. It could be well over 40% in practice.”
“Are there any risks that the industry should bear in mind?” asked Jeremy Cowan.
“Not getting on and implementing it is the biggest risk. Mobile operators do not necessarily act quickly and they need to agree commercially how changes will be made in practice. The GSMA Specification is a technical specification, that provides the framework for doing the profile changes securely and accurately, with maximum flexibility for the end user. If proprietary solutions now continue alongside the GSMA spec, we believe it will reduce the overall growth opportunity and cost more. Operating multiple support systems is more expensive and would not provide the operational flexibility required for strong market growth. In the report we have calculated the costs of continuing to use multiple solutions in the market, and those costs are in the billions of extra dollars just in the auto sector. Those costs are incurred if you need to change operator, most often at a contract change point. GSMA spec is over-the-air. Proprietary solutions may be subject to a reflash, which means a recall to the dealer,” Duke-Woolley added.
The GSMA Embedded SIM Specification allows mobile network operators to provide scalable, reliable and secure connectivity for M2M connected devices that are often hermetically sealed, such as in the connected car or in smart meters. It also facilitates over-the-air operator provisioning and management, which provides service flexibility to end customers. The GSMA Embedded SIM Specification promotes a common global architecture that will reduce costs, drive efficiencies and further accelerate the rapidly growing M2M market, which is set to reach 244 million global connections this year, according to GSMA Intelligence.
Availability of test specifications will provide market assurance
The GSMA has published Embedded SIM test specifications for remote provisioning solution providers that will give assurance that different embedded SIM remote provisioning systems functionally comply with the GSMA Embedded SIM technical specification. The GSMA has also launched a security accreditation scheme for remote provisioning subscription management service providers to ensure that the robust security and product integrity requirements are maintained.
“Khalifa Al Shamsi, chief digital services officer, Etisalat Group, said: “We are thrilled to be one of the pioneers contributing to the first roll out of the ‘Embedded SIM’ specification for M2M services. Etisalat started to work with Automotive manufactures as early as 2012 as we clearly saw the potential of the solution to pave the way for global demand for IoT and M2M. Now Etisalat leads the internet of Things domain offering the first eSIM in Middle East compliant with the GSMA’s Embedded SIM Specification for M2M.”
NTT DOCOMO recently introduced Japan’s first eSIM that works on mobile networks of various international operators for M2M Devices. “It is based on the GSMA Embedded SIM specification as we think that a unified solution will accelerate the adoption of Embedded SIMs across the world. We believe that eSIM will simplify manufacturing and inventory-management tasks, and creates major advantages for global M2M enterprises,” added Naoki Tani, managing director of NTT DOCOMO’s M2M Business Department.
Olivier Beaujard, VP Market Development at Sierra Wireless said, “A number of our 3G and 4G LTE M2M and Automotive products are compliant and ready to be released to the market based on the GSMA Embedded SIM specification. We have worked closely with the GSMA and industry partners to create products that adhere to a globally recognised solution that will avoid unnecessary fragmentation and ensure the M2M and Automotive market grows rapidly.”
Felix Marchal, chief product officer, Telit Wireless Solutions, commented, “The unique environmental requirements of machine-to-machine and automotive applications have long pointed to the need for an industrial quality SIM solution. As an extension of our commitment to providing unparalleled product quality and reliability, we are grateful to the GSMA for their work in creating a standardized Embedded SIM specification, pleased to have been a part of its definition, and delighted to be among the first to offer a commercial solution based on this standard.”