Virtual Operators Keep Calm as Verizon Announces New Global IoT eSIM Platform

Verizon announced last month a global Internet of Things (IoT) Embedded Subscriber Identity Module (eSIM) platform, Verizon Global IoT Orchestration. The platform enables IoT customers to manage devices internationally using the eSIM and roaming capabilities of Verizon’s international Mobile Network Operator (MNO) partners.

IoT customers using the platform will be able to connect to a carrier partner’s network as a subscriber. At the time of the platform’s release, Verizon announced partnerships with Bell Canada and Telenor, and plans to add more MNO partnerships in the future.

Verizon Global IoT Orchestration allows Verizon to offer better support to international devices, which have been historically underserved by ThingSpace, the company’s IoT management platform. Some in the industry question if this new product will threaten Mobile Virtual Network Operators (MVNOs), many of which exist to provide eSIM connectivity to international deployments. MVNOs, however, appear unperturbed.

After its introduction in 2016, eSIM technology revolutionized the MVNO business, enabling virtual operators to remotely provision SIM cards after the point of manufacturing. Remote, Over-the-Air (OTA) provisioning and re-provisioning allowed MVNOs to offer customers simplified global connectivity and eliminated stubborn connectivity issues like vendor lock-in and physical SIM swapping.

With the adoption of eSIM technology, MVNOs furthered their reputation as innovators in the IoT world. While MNOs cater to large, domestic, static IoT use cases, virtual operators have angled themselves as specialized IoT providers with flexible eSIM offerings for international and mobile IoT deployments. Understandably, the introduction of Verizon’s eSIM platform could be seen by many in the industry as a strategic move against MVNOs, one meant to imitate and eventually deter MVNOs’ opportunities in global markets.

However, in speaking with RCR Wireless News, Shamik Basu, Head of IoT and Automotive Products at Verizon Business, dismissed the notion that the carrier’s platform is meant to snuff out MVNO competition. Basu expects that MVNOs will want to participate in the platform, while still providing the specialized, managed services for which they are known. “MVNOs have some very niche customer relationships, where they don’t just provide connectivity – where they are long-time SIs to customers. Which we don’t have aspirations to be,” he said.

While it is unclear if MVNOs truly have ambitions to be involved with the Verizon platform, ABI Research has spoken with several MVNOs who appear unthreatened by Verizon Global IoT Orchestration. In one regard, these MVNOs seemingly agree with Basu—believing their specialized customer base and value-added services will protect their business from any MNO eSIM platforming efforts.

MVNO and MNO customer bases have historically been seen as two separate groups—MVNOs developed a reputation for capturing small, vertical-specific IoT deployments, while carriers went after large IoT projects from big-name companies. MNOs are not incentivized to win customers with small deployments and ambitions to scale, leaving these customers to MVNOs. In providing support to these customers, virtual operators developed innovative and specialized IoT expertise.

Between virtual and mobile operators is a tense understanding of what the other is best at and a precarious agreement that they need one another to address the full spectrum of customers’ connectivity needs. From Basu’s comments, it appears that Verizon expects these dynamics to remain the same as the carrier rolls out the Verizon Orchestration IoT platform. Basu stated that Verizon plans to target large, multi-national corporations with this offering.

However, remote provisioning has allowed virtual operators to expand their customer base and improve their prospects of winning larger, international mobile IoT deployments. Efforts like Verizon’s could undo some of the progress MVNOs have made in offering international connectivity to large IoT estates.

Though many MVNOs seem confident that MNOs cannot replicate their success, virtual operators should understand that more platforms like the one from Verizon could disrupt their ability to gain larger deployments. MVNOs should continue to differentiate themselves from MNOs by leaning into their established role as System Integrators (SIs) and investing in more innovative end-to-end managed services for IoT customers. Investing in specialized, customer-centric solutions, particularly when attempting to capture large, global deployments, will help insulate virtual operators from carrier competition.

The GSMA set the first eSIM specification in an attempt to prevent the concept from being owned by device manufacturers. MVNOs have since made great use of eSIM technology, leveraging their international partnerships to offer customers consistent, global coverage. Carriers have been less likely to adopt eSIM technology, as operators are protective over their contracts and are not keen on the idea of sharing a customer’s connectivity with other carriers. However, Verizon clearly views eSIM platforming as an opportunity, maybe not to directly compete with MVNOs, but to instead become an international IoT entity that can compete with global carrier groups, such as Vodafone.

Though Verizon says this is not an explicit power move against virtual operators, many MVNOs view the new platform as Verizon’s late attempt to match MVNO innovation. There are other areas of innovation, beyond customer support and verticalized expertise, where MVNOs could again prove 8their IoT competence against carriers. For example, many consider Integrated SIMs (iSIMs) as the coming SIM form factor that will revolutionize the connectivity landscape. iSIMs only rely on eSIM technology, and companies that have already mastered remote provisioning are more likely to profit from iSIMs as they gain traction in the future. Though iSIMs are not near the point of mass adoption, by continuing to invest in remote provisioning (and re-provisioning) technology, MVNOs will prepare themselves for the next stage of SIM advancement and could again be considered ahead of MNOs in SIM and connectivity innovation. Forward-thinking SIM innovation and vertical expertise will help bolster MVNO organizations if more carriers mimic Verizon in the future and offer MVNO-like platform services.