Travel eSIMs Are Cleared for Take Off - But Are Operators Ready?

May 2024

Telecoms & Connectivity

Molly Gatford

Senior Research Analyst

Roaming has been a proven connectivity solution in telecoms markets since the 1980s. While cellular technologies have evolved during this time, the emergence of travel eSIM packages can be considered the first service that genuinely has the potential to substantially disrupt this established market, since roaming services began over 30 years ago.

As the demand for staying connected while abroad grows, this disruptive business model is emerging to challenge the traditional international roaming and travel connectivity market. Travel eSIMs, also known as embedded SIMs, now offer alternative travel connectivity solutions, lower cost and more flexibility to mobile subscribers.

The Time Is Now for Travel eSIMs

The number of eSIM-capable devices continues to grow, with most new smartphones compatible with the technology. In the US, the iPhone 14 and iPhone 15 models were launched as eSIM-only devices. This increases awareness of the technology and indicates that eSIM technologies will eventually replace the traditional plastic SIM cards widely used today.

Travel eSIMs give customers a significantly more cost-effective solution than traditional roaming services. By offering data at significantly lower costs than roaming, travel eSIMs can save customers an average of 35% on their data spend per GB in 2024. This financial empowerment makes travel eSIM packages a compelling choice for frequent travellers. 

The demand for travel eSIMs is rising, particularly where operators impose high roaming charges.  According to Juniper Research’s latest Travel SIMs & eSIMs report, the total revenue from travel eSIMs is projected to increase rapidly by 650% between 2024 and 2028. This rapid growth indicates an urgent need for telecom industry professionals, mobile subscribers, and individuals interested in travel connectivity solutions to adapt to the changing travel connectivity landscape.

As the potential value of this market becomes apparent, more vendors are expected to emerge to take their share of revenue. One of the latest entrants into the travel eSIM market is the digital bank Revolut, which became one of the first digital banks within the Economic European Area to launch an eSIM for connectivity in over 100 countries.

How Will Travel eSIM Vendors Ensure Success?

An increasing number of travellers are open to purchasing travel eSIMs to remain connected whilst abroad, with the number of travel eSIM users growing 52% between 2022 and 2023. However, with a lack of consumer awareness of the technology hindering further growth, how will travel eSIM vendors ensure that the market reaches its full potential? 

Juniper Research has identified several strategies that travel eSIM vendors must use to capitalise on this rapidly growing market. These strategies must, first-and-foremost, focus on increasing awareness of travel eSIM products amongst international travellers through:

• Partnerships with Travel Operators: Vendors will partner with travel operators such as travel agencies or airlines. Travel operators have details about a customer’s trip, including the location and length, and are therefore in the prime position to offer personalised travel eSIM packages.
• Advertising Campaigns: Vendors will promote travel eSIM products through advertising campaigns to help increase awareness of the packages that are available.
• Value-added Services: Vendors will use value-added services, such as loyalty programmes, to incentivise customers to purchase a travel eSIM again when they next travel. Vendors may also use online queries to learn more about the customer’s travel information and data requirements.

The Impact on Roaming Vendors 

Key issues for roaming vendors are the identification of roaming connections and traffic, and the lack of real-time data on roaming connections. This is becoming an even more significant problem as 5G roaming agreements come into place. The faster speeds and lower latency offered by 5G networks have led to higher demands from mobile subscribers, even when roaming. However, roaming services have not remained agile against this demand for data, with many roaming services unable to identify roaming connections and traffic, leading to ineffective and inaccurate billing. 

However, despite the potential value of travel eSIMs, mobile roaming services still provide customers with some benefits:

• Increased Availability: Some operators have yet to support eSIMs for global connectivity, and many smartphone vendors do not support the necessary hardware. Roaming services are well established, with a greater number of operators offering them. Therefore, travellers can remain connected in more countries while roaming, when travel eSIM packages are unavailable. 
• Convenience: Travel eSIMs require the customer to purchase and download the package before using it, whereas subscribers do not have to activate their device for connectivity. The customer also remains on their existing mobile number, so they can continue to receive calls and texts on this number.  

While many may view travel eSIMs and roaming packages as competing technologies, this should not be the case. Offering consumers choice is essential to the provision of any successful service; therefore, we expect more operators to launch travel eSIM services alongside their roaming packages to compete with these emerging third-party vendors and protect their revenue.

Molly is a Research Analyst at Juniper Research, providing insight, data, and recommendations for established and future markets within the telecommunications sector. Her recent reports include Travel SIMs & eSIMs, Generative AI in Mobile Messaging, and A2P Messaging.