eSIM as a know-how has been round for a decade now. Nonetheless, world eSIM adoption was round 3% final 12 months and can solely cross 5% this 12 months.
Regardless of these figures, analysts, eSIM-providing startups, and buyers are bullish about eSIM’s upward trajectory, largely due to journey.
System compatibility
One of many key components for that’s cellphone makers launching gadgets with eSIM options.
The primary batch of smartphones with eSIM arrived in 2017 and 2018, with the Pixel 2 and the iPhone XR among the many most notable telephones. In 2022, Apple ditched the bodily SIM slot to go eSIM-only for the U.S. market, and Google adopted go well with with the Pixel 10 this 12 months.
This 12 months, Apple upped the ante by releasing the eSIM-only iPhone Air and providing an eSIM-only mannequin of the iPhone 17 collection in additional than 11 nations as an choice. One key benefit of those eSIM-only telephones is that they provide barely bigger battery life than the fashions with a bodily SIM slot.
Analytics agency Counterpoint stated that in 2024, the penetration of smartphones with eSIM was simply 23%. The U.S. is the strongest marketplace for eSIM, with 41% of gadgets launched in 2024 having eSIM capabilities.
Till lately, eSIM has been a function of top-end gadgets, however that’s altering slowly. GSMA stated that simply within the first half of 2025, manufacturers have launched than 60 eSIM-enabled smartphones.
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China generally is a main think about eSIM’s adoption. This October, after the launch of Apple’s eSIM-only cellphone and some hiccups, China’s telecom suppliers started providing eSIM assist. Pablo Iacopino, an analyst at GSMA, stated native producers like Huawei, Xiaomi, Oppo, and Vivo can even probably launch extra eSIM-native or supported gadgets.
These producers have a giant share in economically delicate markets in Asia and Africa. They’ll regularly embody eSIM assist throughout value ranges to assist the home demand.
“Chinese brands, when they see that the Chinese MNOs have launched eSIM services for the domestic Chinese market, they will probably start introducing eSIM across a wider range of smartphones, including, medium and low-end market,” Iacopino stated. “But I don’t think they will go eSIM only immediately. They will start with supporting both physical and eSIM, before shifting to eSIM-only models.”
Presently, even inside gadgets with eSIM assist, few persons are utilizing the know-how — however that’s altering. Steffen Sorrell, head of analysis at Kaleido Intelligence, a telecom analyst agency, stated that it noticed a 30% activation fee in gadgets with eSIM capabilities in 2024. The agency estimates that the speed will go as much as 75% by 2030.
Journey is a giant catalyst
eSIM is likely one of the most handy methods to get connectivity while you’re touring. A GSMA survey stated that 51% of individuals utilizing eSIM use it for journey. Plus, it’s a safer answer, given that usually eSIM {hardware} is sure with safe {hardware} components, making it tough to tamper with.
These components have been constructive for eSIM supplier startups, AirAlo, Holafly, eSIM.me, Nomad, and Truely. Even the Lithuania-based safety supplier Nord launched an eSIM service known as Saily. Most of those corporations have seen progress of their buyer base, and that’s largely due to journey.
GSMA stated that journey is presently proving to be a robust catalyst for eSIM progress as frequent vacationers favor to purchase gadgets with eSIM assist. Plus, they might undertake eSIM for his or her long-term utilization.
“People might experience eSIM for the first time while traveling. These users who like the eSIM experience would go back home and request their network providers to make a switch from a physical SIM,” GSMA’s Iacopino informed TechCrunch over a name.
AirAlo is likely one of the greatest eSIM corporations round and has been lively for greater than six years. The corporate’s CEO, Bahadir Ozdemir, stated that the app is chargeable for many customers experiencing eSIM for the primary time. The corporate did a survey on its app final 12 months, with 85% responders being first-time eSIM customers.
“Roughly 15% of travel connectivity is being powered by eSIMs, and the number is growing. Once users discover how they can get connectivity with eSIM, they don’t really want to go back to the old way [physical SIMs] of doing it,” Ozdemir famous.
He stated that whereas a number of telecom operators supply eSIMs, it isn’t simple for purchasers to find these, and apps like Airalo make the method simpler. Community suppliers are additionally fascinated with the journey eSIM market. As an example, Vodafone partnered with UEFA to launch a specialised eSIM for vacationers attending soccer matches throughout the continent.
Development and investor curiosity
Journey-related eSIM startups have seen notable progress. Truely stated it has served greater than 70,000 vacationers during the last two years, with 2x order progress this 12 months. The startup, which raised $2 million extension spherical in June, stated that aside from partnering with fintech providers and journey apps, it is usually exploring governmental collaborations in numerous areas.
NordVPN stated that its Saily eSIM app noticed a seven-digit userbase after its launch in March 2024. The corporate additionally launched a $60 per 30 days Extremely plan with world protection.
Holafly stated that it has bought greater than 15 million eSIMs since its inception in 2018 and has crossed $500 million in complete income. The startup famous that out of that determine, it earned $200 million in 2024.
AirAlo’s blockbuster $220 million spherical, led by CVC and introduced in July, made it a unicorn and was essentially the most notable eSIM funding within the final two years. In the meantime, French eSIM startup Kolet nabbed $10 million in Sequence A funding led by Daphni with participation from former Expedia Group CEO Peter Kern and Apple’s former vice chairman of promoting Jon Gieselman.
Scott Shiao, a principal at Goodwater Capital, stated that the funding focus will likely be on travel-related eSIM startups on the patron facet in the interim, however there might be a chance in home markets sooner or later as effectively.
Martell Hardenberg, a associate at Antler, stated that whereas the journey eSIM use case has grown, a number of customers may be thought-about early adopters, and there’s nonetheless a lot room to develop.
“I think there is opportunity in offering bundled services to global travelers or digital nomads about what can companies offer beyond travel SIM cards and make it a lucrative package for these user profiles,” Hardenberg informed TechCrunch.
Buyers will probably search for providing, marketability for long-term guess as there could be consolidation just a few years down the road, Kaledio’s Sorrell stated.
“The market is obviously on its way up, but I think sooner or later we’re going to reach a saturation point in terms of the providers on the market there. So investors will look into the long-term viability of the business along with things like customer loyalty, quality of coverage, and even association with marketing capabilities, how you’re able to promote that eSIM, whether it’s through airlines, banks, or cab companies,” he stated.
Challenges in adoption
A few roadblocks in adoption are training, belief, and ease of use. Lots of people simply don’t know what an eSIM is.
“Spotify can tell people to download Spotify because people know about music, and Netflix can tell people to download Netflix because people know about TV shows,” Airalo’s Ozdemir stated. “But we couldn’t do that with Airalo, as a lot of people don’t know about eSIMs.”
He famous that the corporate repeatedly companions with completely different influencers to coach folks about connectivity on the undergo eSIM and redirects them to Airalo.
Truely CEO Eric Dadoun believes that given there’s a regular rise in gadgets which might be eSIM solely, customers can be compelled to know in regards to the know-how as effectively. He stated that corporations working within the eSIM trade will nonetheless concentrate on consumer training for buyer acquisition in markets the place shopping for an eSIM-only system is non-obligatory.
One of many thornier elements of utilizing an eSIM is that if you purchase a plan from any of the apps, you get a QR code in your e-mail that you want to scan to put in the eSIM. Which means you want a second system that shows the QR code. The entire course of is cumbersome if you’re visiting one other nation and also you need to purchase an eSIM when you’re at an airport.
GSMA’s Iacopino agreed that the method is cumbersome for a lot of customers, and as adoption grows, eSIM suppliers and {hardware} makers might want to work out a solution to make the method clean.
Kaleido Intelligence’s Sorrell famous that for some community suppliers, the transfer to eSIM is slower, as they’ve legacy know-how and techniques which might be proving to be a roadblock. They might additionally must make the method of switching to this tech totally digital so clients don’t have to go to a retailer.
