Skip to Main Content

Strategic Business Insights (SBI) logo

Mobile Communications February 2015 Viewpoints

Technology Analyst: Frederick C. Dopfel

Advances in Network-Agnostic SIM Cards

Why is this topic significant?

Customers who purchase networked devices are often locked in to their service providers. Although many governments have legalized unlocking phones, many users find it tedious to install a new SIM card. During recent months, network-agnostic SIM-card developments have generated interest.

Description

In some cases, network-agnostic SIM cards appear to be a legal gray area, neither disallowed nor explicitly legal. In 2014, regulators in the Netherlands specifically authorized the use of network-agnostic SIM cards. More countries are likely to follow—or, at least, not outlaw the technology.

In October 2014, Apple introduced Apple SIM in its newest line of iPads. Users can select a service provider and sign up for a plan from within the tablet's settings menu. Some partners (such as AT&T) write-protect the SIM after reprogramming. By locking in customers once they test its service, AT&T effectively negates the Apple SIM's "killer app."

Cubic Telecom launched a SIM card that automatically reprograms itself to act as a local SIM whenever it moves between countries. The device is available in Chromebooks and some HP laptops and tablets. Reprogrammable SIMs are also available from AnyNet and PodSystem. KnowRoaming sells a reprogrammable $35 sticker that users attach to a SIM card. A smartphone app allows users to choose between using the SIM card and activating the sticker for a local market.

During 2014, NTT Docomo demonstrated its Portable SIM prototype, which the company says could be miniaturized in a compact wearable device. A user can have a collection of smartphones, tablets, and other gadgets and wave the Portable SIM near a device the user wishes to activate temporarily or near another person's phone or tablet that "borrows" the user's credentials to connect to a cell tower. In theory, a user whose phone battery has died could even borrow a friend's phone and have charges accrue to the user's account.

Implications

Reprogrammable SIM cards could help users reduce costs, reduce need for swapping SIMs (a practice common in countries where service providers offer different in-network versus out-of network calling rates), and even eliminate the need for external access to the SIM entirely (no more SIM trays).

Significantly, network-agnostic SIMs could help phone manufacturers to sell phones directly to consumers more easily rather than using service providers as intermediaries. Stores owned by Samsung, HTC, Apple, and other smartphone makers may take over sales and service of phones, allowing service providers to save money by closing outlets.

Impacts/Disruptions

Some service providers are understandably concerned about the development of user-reprogrammable SIMs. These SIM cards may encourage churn and lessen the effectiveness of marketing and reputation on customer choice: Some users may test-drive various networks in their area to find the least expensive one that offers service everywhere they need it, rather than simply choosing the one with best coverage overall. Reprogrammable SIM cards also enable lower-cost long-term M2M (machine-to-machine-communication) applications. For example, companies with sensor networks that use cellular providers for their backhaul can easily switch providers if one provider goes out of business or threatens to increase prices (manually replacing SIM cards on a large number of distributed remote devices is prohibitively expensive).

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: Medium

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: Now

Opportunitites in the following industry areas:

Large sensor networks, vehicle fleets, corporate phone plans, individual phone users, MVNO upstart operators

Relevant to the following Explorer Technology Areas:

Gigabit WLANs

Why is this topic significant?

Adoption of wireless LANs with real-world speeds orders of magnitude faster than speeds of WANs paired with gigabit home-broadband connections could enable new heavy bandwidth applications on portable devices that users expect to use both at home and while traveling.

Description

Broadband services that support at least 1 Gbit/s may become common in the years ahead. Yet their advantages can materialize fully only if customers have appropriate networking hardware. Gigabit wired-Ethernet connections have been available for years, but consumer-grade gigabit Wi-Fi routers are a recent development. IEEE 802.11ac, the most current widely available Wi-Fi standard, has a greater-than-1 Gbit/s maximum theoretical rate. Some vendors advertise rates of up to 3.2 Gbit/s, although users are likely to experience performance closer to 500 to 1000 Mbit/s in real-world settings.

Some high-end smartphones and tablets today support 802.11ac, and their capabilities for consuming large amounts of data are also increasing. When multiple members of a household each use high-bandwidth applications concurrently, demands for bandwidth could correspond to gigabit-class performance. Displays with beyond-HD resolution (such as QHD) are common on high-end mobile devices today. Similarly, OEMs are introducing beyond-HD front-facing cameras for videoconferencing and 4K rear-facing cameras for video capture. Smartphone-based VR systems such as Google's Cardboard and Samsung's Gear VR are already available to consumers; when in use for immersive video, these applications will be bandwidth intensive. These as well as unforeseen applications enabled by gigabit wireless speeds will increase bandwidth demands beyond what mobile carriers can support and will call for LANs to deliver gigabit-class performance.

Implications

Entirely new applications that exploit the vastly improved data rates of residential WLANs will become popular on mobile devices. Much like how bandwidth-heavy downloading apps and videoconferencing were initially feasible only on Wi-Fi networks to reduce congestion, so too will these new applications be confined to Wi-Fi, at least initially. Growing customer demand for high-bandwidth applications will inevitably force service providers to allow their use on their networks, introducing a huge strain to their infrastructure. Increases in demand for data may be as sudden and as dramatic as that of the iPhone, which overstretched AT&T's network for years.

Impacts/Disruptions

WLANs are likely to continue to outperform cellular networks because of the basic physics of wireless communications, and the gap is widening with ever-faster iterations of Wi-Fi standards. WLANs may even continue to outperform typical fiber-based broadband services because of the high cost of deploying and delivering multigigabit wide-area services. Much like how users found ways to take advantage of vast amounts of computer storage when it became economically available, so too will users find uses for astronomically high data rates in the home (and expect them on wide-area networks) for applications not now apparent. Wireless-service providers may need to invest more in small cells and may consider building or partnering with municipal Wi-Fi networks to provide the speeds users demand. Service providers may consider tiers of service, depending on data speed.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: High

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: 5 Years

Opportunitites in the following industry areas:

File compression, municipal Wi-Fi networks, wireless backhaul

Relevant to the following Explorer Technology Areas: