In the world of M2M “How Many MNOs does it take to change a light bulb”?

Written by: Iain Maxwell

May 31, 2017 - Will IoT amplify rollout of eUICC?

 

In the brave new connected world of Internet of Things (IoT), the GSMA believe that the introduction of Embedded SIM (eUICC) will deliver massive new business opportunities and that Mobile Network Operators (MNOs) worldwide will start to gear up for eUICC v3.1 rollouts, but will IoT Service Provider (SPs) really use the MNOs services as expansively as the MNOs hope? Will it end up that business is just ‘good’ for the MNOs, and not as ‘huge’ as predicted, given that SPs might only use the Machine to Machine (M2M) eUICC solution for remote, inaccessible or portable/moving devices?

Embedded SIM Roll Out

GSMA resolved early interoperability problems with GSMA eUICC v2.1 by releasing and certifying eUICC v3.1 in conjunction with GlobalPlatform in June 2016 which uses the new SIMAlliance Interoperable Profile format. It allows any eUICC profile to be loaded on any eUICC using GSMA’s SCP03t to secure the new SIMAlliance profile while it is delivered to the eUICC Over-the-Air (OTA). But the predicted wave of new business across the target verticals of automotive, Smart Home, Smart Cities and eHealth in Q4 of 2016 did not occur and only now are we seeing increased M2M eUICC volumes.

GSMA predictions for M2M and IoT devices

The Smart Home or Domotica (based on the Latin word for house: domus) use case of IoT is to connect all of the devices in our home so at minimum we need an internet connection to our home Wi-Fi allowing all the Domotica devices to connect. But do we really need an eUICC in each and every device in our homes given that these devices might not leave the local range of the Wi-Fi connectivity or other wireless connection options? SPs and ultimately the end user will not feel the need to insert an eUICC in each device so it appears that eUICC is only then applicable to portable devices that might leave our home, therefore the business case here for the MNOs might appear to not be as strong as the MNOs are predicting. But the GSMA are still driving the ‘Smart-Home’ as one of their main use cases in their IoT service portfolio, so where is the business opportunity for the MNO? Future business for the MNO in the Domotica vertical will arrive as an IoT opportunity rather than a M2M opportunity, where the MNO is the internet service provider (ISP) for your home. Many MNOs have already diversified into offering ISP services and other IoT value add services sitting on top of the internet connection to your home. Combining this with eUICC connectivity in devices that will leave the home delivers a convincing argument for this business case qualifying the GSMA’s huge predictions for this market vertical.

Is GSMA’s eUICC Solution overly complex?

In the Smart Home example above, the connectivity and management of these connected devices again appears to be a fairly straightforward IoT proposition rather than a M2M solution. All we need is an internet connection and an application on our mobile handset or some other central home controller to provide the device management service layer and feedback device data to a remote IoT platform. But other concerns do arise such as; securing access to your connected Domotica devices and interoperability issues, where connecting every device in your home to each other currently suffers from extreme market fragmentation, we can see that we are still quite far away from a seamless secure and interoperable Smart Home solution although we only need one MNO to ‘change’ the light bulb in this instance.

Now if we look beyond the fact that the eUICC solution is currently aimed at the M2M market for remote, inaccessible or portable/moving devices to consider the fact that it is technically possible to fit an eUICC into any home based device e.g. the humble light bulb, is this technology overly complex and prohibitive to rapid expansion and huge market deployments? Again on the surface the answer and solution seems pretty straightforward. The end-user purchases their smart light bulb fitted with Wi-Fi, M2M/eUICC etc connectivity. They connect and switch on the device and at that point it connects to the MNO network and an existing telecoms profile is enabled or a new one is downloaded.  They are ready to go and this connected device is up and running in their home. If in the future the SP who provides the service management layer for the light bulb decides to switch MNO connectivity services all of this can be done remotely OTA saving SPs and ultimately the end-user’s subscription costs for all their connected devices, not just their light bulb. The GSMA’s eUICC v3.1 solution makes it easy for the SP and/or the end-user to switch subscriptions on all their connected devices, though in the end its probably not applicable to the humble light bulb. This not only solves any interoperability concerns but also offers a strong security layer via the eUICC’s built in support of 3DES and AES cryptography. So we need at least two MNOs to ‘change the light bulb’ and keep the market competitive in this instance. This clearly indicates that the success of the GSMA’s eUICC solution in the M2M market is reliant on the GSMA’s MNO members’ adoption of this new technology.

Conclusion

Similar to the IP connected IoT solution the M2M eUICC solution delivers an easy to use and straightforward system. M2M devices additionally deliver guaranteed interoperability and the built in security value add that many IP based IoT devices often do not offer and if needed would be added to the solution as an expensive afterthought for the SP/IoT Platform vendor. But the M2M eUICC solution is mainly applicable for only remote, inaccessible or portable/moving devices. So whether you need one MNO in the IP IoT solution or at least two MNOs in the M2M eUICC solution to ‘change that light bulb’, the MNOs aren’t joking around when it comes to their strategies for IoT and M2M services. They have a clear vision and experience in all the required technologies to connect the number of devices required to meet their expansive business predictions for their new IoT and M2M services!

Disclaimer

These are the personal opinions of UL’s employees and its guests and should not be misunderstood as representing the opinion of UL's clients, suppliers or other relations.