eSIM adoption is accelerating. Are South Africa’s MVNOs ready?
Although the technology has been around for more than a decade, adoption is now gaining momentum as more smartphone manufacturers introduce eSIM-only devices in selected markets. This shift could help reshape how consumers access mobile services and how new players compete in the telecommunications market.
eSIM adoption gathers momentum
Embedded SIM technology replaces the traditional removable SIM card with a chip built directly into a device. Users can activate a mobile service or switch providers digitally, without handling a physical SIM card.
The technology first gained traction in wearables and internet of things (IoT) devices, where smaller, more compact hardware was essential. Smartphone adoption, however, has taken longer to gain ground.
By the end of 2025, global eSIM smartphone penetration stood at just 5%. This is expected to reach 10% by the end of 2026 and double again in 2027, according to GSMA Intelligence. The same research forecasts that eSIM-enabled smartphone connections will reach 2.5 billion by 2028.
Lower barriers to entry for MVNOs
For new players in the telecommunications market, eSIMs offer a simpler way to introduce mobile services and scale existing business models.
Without physical SIM cards to manufacture, package, warehouse and distribute, MVNOs can reduce costs and operate without an extensive physical distribution network. Customers also no longer need to wait for a SIM card to be delivered or visit a store to collect one.
Instead, customers can sign up online, complete identity verification, pay and activate their service digitally. This creates opportunities for businesses to launch mobile offerings with fewer physical distribution requirements.
Greater flexibility for consumers
eSIMs also make it easier for consumers to switch between mobile providers remotely, typically through a QR code or an app. A compatible device can store multiple eSIM profiles, allowing users to manage separate numbers for work and personal use.
The technology is particularly useful for international travel. Rather than relying on their usual provider's roaming rates or buying a physical SIM card when they arrive at their destination, travellers can activate a local or travel data plan digitally.
This can make staying connected abroad more convenient while helping consumers avoid unexpectedly high roaming bills.
A smaller physical footprint
Digital SIMs could also reduce the environmental impact associated with manufacturing and distributing physical SIM cards.
Estimates cited in the industry suggest that between 4.5 billion and five billion physical SIM cards are manufactured annually, generating approximately 18,000 tons of plastic waste and 560,000 tons of carbon dioxide emissions.
Reducing reliance on physical SIM cards offers a way to limit this waste, although the overall environmental benefit also depends on the energy and resources required to manufacture and operate eSIM-enabled devices and infrastructure.
New opportunities beyond telecommunications
I’ve previously written about opportunities for MVNOs to tailor their offerings to specific industries here, including the growing role of non-telecommunications brands such as banks, insurers and retailers in the market.
eSIMs could make these offerings more practical. Instead of selling a forestry company or a mine 10,000 physical SIM cards, for example, an MVNO could provide a managed connectivity service for 10,000 connected assets, whether trees, sensors or critical mining equipment.
This shifts the focus from selling SIM cards to delivering connectivity as part of a broader business solution.
Embedding connectivity into existing services
For brands that want to capitalise on the MVNO opportunity without becoming telecommunications companies themselves, eSIMs can be an important enabler.
Imagine a customer selecting a mobile plan through their banking app, verifying their identity using information the bank already holds, paying from their existing account and having an eSIM provisioned directly to their phone.
The process eliminates the need for a separate retail journey or a physical SIM card to collect. It also allows brands to integrate connectivity into services customers already use, potentially strengthening existing relationships and creating additional revenue opportunities.
The customer experience remains critical
However, making connectivity available digitally does not automatically guarantee a seamless customer experience.
If customers still have to call a contact centre to activate an eSIM, or if an operator's operational and business support systems (OSS/BSS) cannot connect onboarding, identity verification, billing, provisioning and customer management, much of the promised convenience disappears.
Successful MVNOs will need to look beyond the technology itself and redesign the customer journey around it. That means ensuring each step, from sign-up to activation and ongoing support, works together without unnecessary friction.
Preparing for the next phase of growth
By 2030, eSIMs are forecast to account for 42% of all SIM technologies, according to GSMA Intelligence.
For local MVNOs looking to develop new value propositions and distinguish themselves from competitors, this presents an opportunity to compete on more than price. A well-designed eSIM service can make connectivity easier to access, simpler to manage and more relevant to customers' everyday needs.
Although adoption has developed more slowly in many African markets, the potential for growth remains. MVNOs that invest in the systems and customer experiences needed to support digital activation could be better positioned to take advantage as eSIM adoption expands.
