The Superhero SIM
- in Business Models, Wireless
Almost everyone in the world knows what a SIM is. It’s the little piece of plastic with gold bits on it that makes your mobile phone work.
Almost nobody in the world knows how a SIM works.
That’s about to change, as over the next few years we’re going to see SIMs disappear. Or at least the bits of plastic with gold bits on will disappear, as the things that a SIM does get integrated inside your phone. It brings the prospect of changing the way phone contracts work, allowing your phone to do far more, and has the potential to disrupt the current business models of network operators.
The best way to describe what a SIM does is to compare it to a dog’s lead, with you being the dog and your network operator being your owner. There are a lot of different elements inside the SIM, which are currently controlled by the network operator. These interact with the firmware inside the 2G, 3G, 4G or 5G radio section of your phone to allow the operator to determine what you connect to, where you can connect to (in the form of roaming, i.e., who can hold your lead), limits on your mobile usage and prepay. A SIM can also be used to store your phone contacts and SMS messages, although nowadays they’re likely to be stored in an app as well.
A SIM also contains a unique number, so it can be recognised anywhere in the world; it knows your phone number, and it contains a security element that is responsible for encrypting your connections.
Almost all of this was specified at the start of digital phone development and is defined in a range of ETSI and 3GPP specifications. Most of the core technology derived from an earlier British Army radio system called Ptarmigan, which was developed in the 1970s, so the concepts have been around for over 50 years. But still hardly anyone knows how it works.
It’s always been possible to do more than just these basics with a SIM. Back in the first 2G specifications in 1990, there was a feature called the SIM Application Toolkit. SIMs contain a microprocessor that can run Java applications that take advantage of the higher levels of security and encryption that are in the SIM card, which are developed with the SIM Application Toolkit. These have been used for a number of mobile banking applications, of which the best known is M-Pesa. Current SIM cards have become very powerful – today a SIM card can include GBits of memory and processors as powerful as those on basic phones. They’re also starting to do far more complex things.
A nice example of what they can do is a SIM Applet application from Wadaro, which is used to measure mobile coverage. Traditionally, the way that a network operator determines whether they have good coverage is to do “drive-testing”. They put an engineer in a van and get them to drive around the country, logging the quality of the mobile signal. It’s a very crude approximation of reality and one reason why the UK’s mobile networks are regularly castigated for “misleading and exaggerated claims” about their coverage. Having good coverage is more important than just generating impressive marketing. To be allowed to operate, mobile operators need to pay Governments for the radio spectrum they use; to get a license, Governments try to impose conditions on what percentage of the country has mobile coverage. There is a constant debate about this, which can involve large sums of money. In the US, operators have allegedly overstated their coverage. That is coming back to bite them, as the Biden administration has just allocated $42.5 billion in infrastructure funding to extend mobile phone coverage to areas lacking a signal. The Catch 22 for operators is that they’ve claimed they already cover those areas, so are being excluded from access to the funding. They don’t want to confess, which means that around 42 million Americans are unlikely to get coverage any time soon and the $42.5 billion will probably get diverted into marketing and paint jobs on cellular masts.
Other Governments take a sterner approach. Nigeria, not the first thought for enlightened Government thinking, has taken the approach of levying heavy fines on any operator that doesn’t meet their coverage requirements. Not surprisingly, it’s led to a lot of debate about what the coverage is and how you can measure it. This is where Wadaro comes in. Their SIM Applet sits in a SIM and constantly logs the coverage and how often a call is dropped, reporting it back. Instead of a few people driving around in vans, this provides real information from tens of thousands of phones revealing what users actually experience. Rather than constant arguments based largely on hearsay, Government regulators and operators can move on to having a meaningful debate about how to improve coverage based on a constant flow of real-time data. It’s a powerful and very cost effective way to monitor coverage in real time, that benefits everyone.
Monitoring like this could be done with a phone app, but a SIM applet has an enormous advantage, which is that because it runs on the SIM, it’s independent of the operating system on the phone. The same SIM Applet will work on Android, IoS, or even on a basic feature phone. It’s also under the control of the SIM provider, without relying on a user to run it. It also takes a fraction of the power of a phone app. Despite these advantages, mobile operators don’t seem very interested in using the SIM for anything other than basic subscriber control. That’s clear from the fact that even if you have a 5G phone, it won’t contain a 5G SIM. At best it will have a 4G SIM, and it’s quite likely it only supports the 3GG Release 8 specification, which came out fifteen years ago, back in 2008. As far as their business model is concerned, they feel little reason to change. Other parts of the industry think differently, which brings us on to SIM evolution.
The diagram below is one Nokia produced several years ago, to illustrated how SIMs have evolved.
The plastic card with the gold bits, which we know so well, has shrunk from the original Mini SIM used in the first GSM phones back in the early 1990s, to the current nano SIM which is used in the phones we have today. Operators didn’t like that much, but phone manufacturers wanted the smaller size, as it made it easier to make a phone waterproof. It also gave them room to provide slots for two SIMs. Having two SIMs lets users swap between two different mobile operators for different types of calls, helping them to save money. Which is something else the network operators don’t like.
SIMs are unlikely to get any smaller. There’s no need for a SIM continuing to be a piece of plastic with gold bits. The functionality of a SIM comes from tiny silicon chips embedded within the plastic, which can just as easily be put into a chip that is part of the mobile phone. That’s called an eSIM. If you have one of these, your network operator doesn’t need to send you a piece of plastic – they can just load their profile into your eSIM over the air.
In 2017, Google added an eSIM into their Pixel 2, followed by Apple, who did the same with their iPhone XS. Both phones still had slots for nano SIMs, as many operators couldn’t support eSIMs, but those may soon disappear. If you buy an iPhone 14 in the US, it won’t have a SIM slot, although there’s still a space for one inside, to cope with countries where eSIM support is behind the curve. Whereas a physical SIM only supports one SIM profile, the eSIM in an iPhone 14 supports at least eight different SIM profiles, which means your phone could work with eight different mobile operators. This is not good news if you’re a mobile operator, as it opens up far more choice for a user.
The final phase in the diagram above is the iSIM, where this is no separate silicon chip to act as a SIM. Instead, the SIM is implemented as software inside a secure element of the main chip which provides the 5G radio function. Qualcomm – one of the two major suppliers of mobile phone chips, have just started supporting this in their Snapdragon 888 chipset. This moves control even further away from the mobile operator. We expect to see the first iSIM enabled phones coming to market this year.
The ability to support multiple SIM profiles in an eSIM or iSIM marks a fundamental change to our relationship with a mobile operator. It’s already possible to enable multiple SIM profiles on recent phones, but the method of setting them up and then selecting which one you use, is cumbersome. The current mobile operators have no real interest in making this easier, as they’re happy with the status quo – they’ve spent the last thirty years using SIMs to make it difficult for you to change your network supplier. The main reason they’ve managed to do that is the fact that even with these new eSIMs, the tools to generate SIM profiles, distribute them and develop a user friendly interface to manage them, have been lacking. That’s about to change.
Telet is a new UK mobile network operator, which is developing a suite of SIM management tools and its own Multi-IMSI, Multi-Crypto SIMs. They believe that SIMs should be deployed for the benefit of users, not just for operators. They see a future where it will be possible for a supplier to provide a service which can automatically choose the most cost-effective network to use on a call-by-call basis, all managed by a SIM applet. You wouldn’t need to think about how much a call or data session costs – your virtual provider would choose the cheapest option for you.
That transforms the relationship between you and your mobile network operator and changes their business model. Today, if you want to insult your mobile provider, just call them a utility. They hate the fact that they are fundamentally no different to the companies that provide you with water, electricity and gas. They differentiate by exulting in the fact that they have retail shops and valuable brands (Brand Directory puts Verizon, AT&T and Deutsche Telecom in the top 30 most valuable global brands). They forget that it wasn’t that long ago that the utilities were in that same position. You could pop into your local electricity supplier to set up a contract or buy a new cooker – they even had fancy mobile stores where you could get excited about the latest chest freezers and spin dryers:
About the only thing that keeps our current mobile network suppliers from descending to utility status is their control of the SIM along with immature pricing plans. There has been surprisingly little innovation in pricing plans. For the first 20 years of GSM, operators failed to move away from counting call minutes for each individual phone. I recall one company who rolled out an early IoT application that was sent five thousand individual paper bills each month, because that’s the way the operator did billing. The transition to pre-pay, packaged minutes, data plans and roaming were slow and remained focused on means to cement customer retention. The arrival of eSIMs in phones six years ago should have changed that, but we’re still waiting for innovation in billing. At long last it looks as if we’re almost there.
Innovative billing, along with eSIM provisioning services that are user friendly, won’t result in the end of our existing operators. They need to remain to manage the infrastructure behind our mobile comms. But like our other utilities, their brand value will disappear, as will the retail shops. We’ll deal with new companies to provide our phone services and probably see prices fall as a result of more efficient competition. It is possible that some of the current network providers will step up to the mark to do that, but history suggests that they will find that transition challenging. More nimble companies, like Telet will probably outpace them. As customers, we deserve good coverage, reliable connectivity and reasonable pricing. The pieces are now in place to make that happen.
Cambridge Wireless recently ran a SIMposium – a seminar on developments in SIM technology, which prompted this article. If you’re interested in finding out more, presentations from both Wadaro and Telet are available for download.