eSIM SGP.32 Specification Was the Hot Ticket at MWC 2024

During my visit to MWC 2024, it became quickly apparent that the Embedded Subscriber Identity Module’s (eSIM) new SGP.32 specification was top of mind and a significant focal point and topic that dominated all my discussions. SGP.32 is a new remote provisioning specification specifically designed for Internet of Things (IoT) devices, aiming to simplify integration, provide switching capabilities between operators, improve scalability, and accelerate time to market. Regardless of where each vendor sat, as it relates to the cellular connectivity ecosystem, including operators, smart card providers, silicon vendors, Mobile Virtual Network Operators (MVNOs) and IoT device manufacturers, all had SGP.32 either in development within their development roadmap or pre-standardized solutions readily available.

There is clearly a high level of expectation and hype related to the SGP.32 specification, although this shouldn’t come as too much of a surprise as the existing Machine-to-Machine (M2M) SGP.02 specification (which should be dubbed the automotive specification), was not fit for purpose as it relates to the broader IoT market.

Despite the fact that SGP.32 has not yet been fully ratified, some enterprises are willing to take the risk and deploy pre-standardized solutions to ensure high levels of market readiness—such is the excitement and expectation levels that SGP.32 will finally unlock the potentially lucrative IoT market.

In the shorter term, the automotive sector will continue to dominate the M2M and IoT eSIM market. This is, in part, driven by the well-established SGP.02 specification, which was designed specifically with the automotive industry in mind. This specification is the reason why the vast majority of eSIM activity seen within the IoT space is automotive-centric.

The ability to address other IoT eSIM devices, particularly those constrained in nature or those that do not support Internet Protocol (IP), has driven the development of the SGP.32 specification.

This specification will break down support barriers, allow the use of existing Subscription Manager Data Preparation (SM-DP) infrastructure, and provide a provisioning mechanism that recognizes the capability of an IoT device, and then define whether said device should be provisioned over Short-Messaging Services (SMS), IP, or another channel.

The SGP.32 architecture specification was ratified in 2Q 2023, with work continuing on the technical and interoperability sides, as well as certification.

The first Proof of Concept (PoC) connections are expected later in 2024 with commercially available devices likely coming to market in 2025. The years 2024 and 2025 are viewed as critical and will see significant traction as more SGP.32-capable devices come to market, and existing connections, including those within the automotive industry, transition over to the SGP.32 spec.

ABI Research has identified two large opportunities: asset trackers and smart metering. Although both remain in extremely nascent phases, they are considered two applications of great opportunity that the new SGP.32 specification will open up.

Asset trackers, with use across high-value containers and/or within the industrial category to track and trace high-end/value field equipment, are considered low-hanging fruit for the SGP.32 specification, alongside an expansion into smart metering, driven by continued digitization to help further automate the reading process and help suppliers deliver on green initiatives.

To date, the M2M/IoT eSIM market can be summarized as one that, although continuing to experience Year-over-Year (YoY) growth, can be described as a stunted/limited market, inhibited by shorter-term impacts such as the chipset shortage, but ultimately a market whereby a specification specifically designed for automotive has been crowbarred into a one-size-fits-all M2M/IoT spec.

This slow and stunted paradigm will change, thanks to a purpose-built IoT specification, with 2024 and 2025 considered critical growth acceleration years as the specification moves from being in development to being commercially available.