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Mobile network operatoron-demand subscription management study

2 Mobile network operator on-demand subscription management study

Executive In December 2013, GSMA, the global mobile phone operators’ association,

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Context, objectives and methodology

Our survey

Mobile network operator on-demand subscription management study4

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Subscription managerfor data preparation

MNO

eUICC

• Is functionally identical to a traditional SIM • Will have a “provisioning pro le” assigned at manufacture with

secret keys that allows the associated subscription manager to download and manage “operational pro les” on the eUICC

• The technical speci cation can accommodate both an initial declaration of the mobile operator in the eUICC, as well as the selection of a new mobile operator later

• Uses subscription manager to manage pro les • Reuses existing provisioning interfaces and processes

• Securely packages pro les to be provisioned on the eUICC • Manages the installation of these pro les onto the eUICC

• Ensures the secure transport of both eUICC platform and eUICC pro le management commands in order to load, enable, disable and delete pro les on the eUICC

Subscription managerfor secure routing

How it works: embedded SIM basic system architecture

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Survey objective: to understand how mobile operators perceive this initiative and whether it can

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Use case details

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Initial device provisioning

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• SIM cards

Use case 1:

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in M2M tenders

• SIM cards

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PoS

Customer

Customer

The car is soldto the customer withlocal connectivity

Local mobile operatordelivers connectivityto the connected car

Local distributor askslocal mobile operator to provision SIMs

Carmaker builds cars and shipsthem to various local cardistributors

Local MNO

Local MNO

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Use case 2:

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Use case 3:

Device maker

SIM and device manufacturerssell non-provisioned SIMs anddevices to MNO

MNO ships phones with non-provisioned SIMs to local stores

Customer selects tariff plan andMNO salesperson provisionsSIM with relevant pro le

MNO store

HLR

Provisions within theHLR licennse

Provisionscustomer’sSIM with aprepaid offer

Prepaid

Capped

Post-paid

Salesperson

MNO

SIM maker

Customer

Carmaker negotiates connectivitycontract with MNO A and sells aconnected car to the end user

Customeruses car withconnectivityfrom MNO A

Carmaker can switch connectivityover the years in response toregulatory constraints or change inecosystems

Carmaker

MNO A

Customer

MNO BMNO A

Connectivity MNO A

Connectivity MNO

Connectivity MNO B

Carmaker

x

x

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and anywhere •

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Use case 4:

SIM and device manufacturerssell non-provisioned SIM andportable gaming device to the MNO

MNO ships portablegaming device with non-provisioned SIM to local stores and additionalretailers

Customerbuys portable gaming deviceequippedwith SIM

When needed,activates SIMon chosen offer

Welcome to MNO XPlease slelect yourtariff plan: 10 MB 1 GB 10 GB

Additionalretailer

New distributionchannel

Device maker

SIM maker

MNO MNO store

Customer

Customer

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Use case 5:

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MNO MNO

User subscribes to anoffer within the portfolioof local MNO

User travels toanother country inthe EU with his phone

If selected, localnetwork deliversconnectivity to user

User can chooseto switch on local network

Do you wantto switch tolocal network?

Yes No

Customer

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Mobile operators’ technology strategies are likely to

M2M

M2U

Connecteddevicesmarket

Low bandwidth

High bandwidth

Morebusiness

Core business

Mobilityusage

Homeusage

Highbandwidth

SIM not easilyaccessible

Telematics

Infotainment

Tablets

Connected TV,photo frame

Ebook reader

Health care,cameras

Connected watches

Smartphones

Low applicability High applicability

Lowbandwidth

SIM easilyaccessible

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Mobile operators disagree on the most appropriate operating

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normal to use reprogrammable SIMs, some operational

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6

9

12

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0b 1b 2b 3b 4b 5b 6b 7b 8bn

ARPU

(€/m

onth

per

con

nect

ion)

Volume (billions of connections)

2014

2020

2020

€500b-€550b 2014

2014 €750b-€800b

€160b-€190b

€0b

€0b-€50b €5b-€10b

Consumer electronicsSmartphones/tablet/PC M2M

2020

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revenue development opportunities, scope cutting costs

and the need to

In addressing revenue development,

cost reduction,

Devicemanufacturer

(e.g., carmaker) End user Lead MNO

Local MNO(partner)

Local MNO(partner)

• Customer relationship• Contractual terms• Billing• Service level agreements • Bootstrap connectivity

Local connectivityMain relationship Internal/intercompany ows

• Local connectivity

• Local connectivity

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In regulatory compliance,

Revenues Costs Value chain Legal

Categories of impacts Source: mobile operators interviews

Convergent feedback

Perceivedthreats for

mobileoperators

Perceived for

mobileoperators

Divergent feedback

Enabler ofM2M marketdevelopment

eUICC increases mobile data penetration by connecting

consumer electronics

eUICC supports “shared data bucket” marketing

strategy

Loss of customer“ownership”

Supportsembedded SIMliability-induce

costs

Need to massivelyupgrade IT and

businessprocesses

Increases churnon core business(smartphones)

Facilitatesreal-time network

arbitrage

eUICC raisessigni cant

security threatsfor MNOs

Increase inSIM total costof ownership

(TCO)

Lower expectedrevenues on tablet

connectivity

Reduces SIMlogistic costs SM-SR owner can

be any player in the ecosystem

MNO should be the SM-DP owner

Closed ecosystems(consortiums) are the best

go-to-market strategyfor MNOs

Comply with regulation as alternative to permanent

roaming

A lead MNO should be positioned as a

bootstrap

Overall returnon investment(ROI) of eUICC

Use cases 1 and 2

Use case 4

Use case 5

Use case 3

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Appendix: glossary

integrated circuit cards

data preparation

secure routing

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About EY

How EY’s Global Telecommunications Center can help your business

GA 1001853

EYContactsPrashant Singhal

Holger Forst

Amit Sachdeva

Etienne Costes

Bruno Perrin

Thibaud ChabreliéSenior Manager

Louisa Melbouci

Guillaume DjourabtchiManager