Speakers:
Tolga Yalcin, research director, telecommunications / IoT / digital regulations – IDC (Chairperson)
Zacc Couldrick, CEO & co-founder – eSIM Go
Vipul Arora, EVP – global business – Globe Teleservices
Tony Kaldas, senior director of partnerships – Arabia & Africa – Airalo
Within the last year alone, the eSIM market has grown exponentially by 20%. It has been predicted that 68% of smartphone connections will use eSIM by 2030.
The impact on traditional roaming models has already been profound. This Capacity Middle East panel session, moderated by IDC’s Tolga Yalcin, examined how this shift is creating new commercial opportunities whilst challenging long-established business frameworks – unpacking the real impact of eSIMs on the roaming market and the biggest pain points for operators.
eSIM popularity continues to surge
The travel eSIM market alone is projected to triple from US$2 billion today to $6 billion by 2028, according to Tony Kaldas, senior director of partnerships for Arabia and Africa at Airalo.
“If you look at the verticals that adopted this earlier, we see telcos, of course, and also travel companies,” he explained. “Airlines are really keen to integrate travel eSIM into their booking journey for their customers, pilots and cabin crews. In addition, we work with hotels, travel companies, travel agencies, tour operators and enterprises.”
Expanding beyond traditional telecommunications boundaries in this way represents a fundamental shift in how connectivity is packaged and distributed.
Zacc Couldrick, CEO and co-founder of eSIM Go, noted the evolution from early adopters to mainstream integration: “What we saw post-COVID was an explosion with Airalo and other pioneers as early innovators. They really generated a lot of brand awareness and adoption, mostly amongst consumers in the early stages.
“What we’ve seen over the last 18 to 24 months is travel-adjacent brands like airlines and even fintechs have really started to launch.”
The numbers support this trend, according to the panel. Couldrick revealed that just two years ago, approximately 10% of eSIM Go’s sales came through brand partnerships. Today, that figure stands at roughly 50%, with neobanks driving particularly impressive growth.
“We support about six different neobanks who do the same thing, and they’re driving huge growth, bigger than the airlines and OTAs, surprisingly,” he said.
The impact of disrupting traditional wholesale models
For wholesale roaming providers, eSIM technology represents both opportunity and disruption. Vipul Arora, executive vice president for global business at Globe Teleservices, explained during the panel session how the technology is fundamentally altering interconnection frameworks.
“Traditionally, we were dependent on operator-to-operator interconnect,” he said. “From a user perspective, there was no choice but to go with your home operator. The ecosystem was very complex. But now eSIM opens that possibility to users.”
The implications extend beyond consumer choice, with bilateral roaming agreements, long the foundation of international connectivity, being supplemented – and in some cases replaced – by platform-based models.
“You don’t need to be restricted to bilateral partnerships, because fundamentally, they have issues,” Arora explained. “One, you need to keep renegotiating them. Second, it depended on your strength versus the other person’s strength. But now that is not the case. You can go in for a partnership with a platform, regional plans or region-related partnerships.”
Couldrick added: “We’ve seen a real change in the way roaming works. It’s following the same approach as IoT. What we’re seeing more and more is people like ourselves doing direct roaming agreements with operators all around the world, but it’s separate schedules.
“We’re building eSIM leasing traffic versus traditional roaming traffic. So it’s innovative commercial models versus the traditional bilateral models.”
Changing customer expectations
Perhaps the most significant impact of eSIM technology lies in how it’s reshaping customer behaviour and expectations, according to the panel. The elimination of roaming anxiety and the fear of unexpected charges emerges as a primary driver of adoption.
“One of the concerns we see with customers is that they have roaming anxiety,” Kaldas observed. “If I’m travelling and I have roaming, I’m worried that I’m going to be overcharged, and some charges are not very clear in advance.”
The transparency and control offered by eSIM platforms addresses this directly, as Kaldas continued: “What we’ve seen is the ease of how to buy and install – that’s very important and that’s what we offer on Airalo.
“Customers go, find eSIMs, purchase and then install whatever they need. There are no hidden fees or extra charges they might encounter later.”
However, quality is rapidly superseding price as the primary differentiator, as Kaldas explained that this is the main priority for customers: “There are many players now, and there’s huge competition when it comes to pricing. But pricing is not the only part, it’s also the quality of the eSIM.”
Tracking strong market adoption of eSIMs
Different markets exhibit distinct adoption patterns and priorities, as Arora outlined during the panel: “Europe is a low-cost market, but not so sensitive on price as it is on quality of service. Digital onboarding and customer service play an important role.
“The US is large data, shorter duration, so you need larger data plans. GCC is a segment which will pay a premium but will not compromise on quality.”
The GCC (Gulf Cooperation Council) in particular was identified as a particularly significant market for eSIM adoption.
“It’s probably the biggest market for us, both in terms of partners and users,” Couldrick said. “We see very strong market adoption in the GCC, probably bigger than Europe and the US.”
In Africa, the panel identified an unexpected regional trend, given that banks are starting to increasingly enter the market.
“They see eSIM as a business opportunity [and] how they can tap into the telco business or telco industry,” Kaldas added.
Looking ahead, the panel anticipated increasing integration of eSIM into broader travel and digital ecosystems. Arora projected a future where the technology even becomes invisible.
“Eventually we’ll stop talking about eSIM separately and it will get immersed in the whole ecosystem of travel. Whether it is booking tickets, taking travel insurance, currency exchange, or whatever it could be – if it gets integrated into the flow of travel, then it will not stand out but will be a part of the journey,” he explained.
The market is also expected to evolve even further as traditional mobile operators are eager enter the eSIM market and expand their capabilities to support what their customers want.
“We do see mobile operators coming into the market now. Over the last year and a half, Vodafone launched, Telefónica, Hutchison, Orange, du and so on,” Couldrick said. “But they’re not really at the point of driving it towards their existing customer base.
“They’re seeing it as a way to acquire new users or have a position in the market while the market evolves.”
