Home > Latest News > Apple Set To Hurt Telstra With eSIM Technology

Apple Set To Hurt Telstra With eSIM Technology

As Telstra bangs on about 5G, key partner Apple, could soon make it very easy for their iPhone customers to switch carriers or to smaller wholesale providers with the introduction of an eSIM into new models, the technology will also benefit Australian retailers.

Some observers are even predicting that an eSIMS could be part of Apple’s new iPhone offering due this week.

Speculation about eSIMS has been rife since Apple complained to the U.S. Department of Justice that US carriers were colluding to prevent their introduction. The DoJ claims that they are currently investigating Apple’s claims

What is an eSIM

The classic SIM card is a small chip that’s inserted into the phone manually — making it more awkward to change your mobile network provider.

In Australia you have to go to a carrier or a certified retailer who is a carrier partner, Harvey Norman partners with Optus while JB Hi Fi is Telstra’s biggest reseller. Some organisations will have one delivered physically.

The eSIM is virtual, meaning that just changing your phone’s settings would theoretically allow you to switch carriers.

Even if eSIM capability are not announced by Apple this time around, the shift to the new technology looks inevitable claims Bloomberg.

It’s almost certain that the introduction of eSIM technology will accelerate price competition just when carriers such as Telstra are looking to invest in new 5G networks.

Whenever it’s made easier to jump from one operator to another, consumers take advantage and seek better deals. “Churn,” the industry term for customer losses, spikes.

That’s what happened, for example, when Spain brought in rules to cut the time it took to change network operators to less than 24 hours claims Bloomberg.

The number of Spanish mobile phone customers switching carriers spiked after it was made easier in 2012

The first hint of eSIMS came back in May when European chipmaker STMicroelectronics NV dropped a heavy hint about eSIMS at an investor day.

At the time they claimed that they expected to deploy its own device in a major mass-market smartphone by the end of the year.

We will know on Thursday whether it’s this year’s iPhone the Company was talking about.

Bloomberg claim that it’s going to be hard to see how the mobile phone operators can resist this technology for long given its usefulness for consumers.

While the eSIM might reduce some logistical costs for carriers in the longer term it will become harder to differentiate between network providers.

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.”

It might make sense for Apple and other phone-makers to keep the classic SIM port alongside an eSIM in the near term. That would give operators time to adapt, while making it harder for them to object.

The move to eSIM technology could impact Telstra’s share price moving forward.

You may also like
ACCC Begins Telstra Phone Services Inquiry
Telstra To Get HTC Blockchain Phone
Budde Sees ‘Fabulous Plot’ As 5G Auction Raises $853 Million
BREAKING NEWS: Huawei Founder’s Daughter Seized in Canada
NBN Supplier Taken To Cleaners Over $400m Sham Contract Claim