Is the SIM card having an identity crisis?

Jeremy Green, Steven Hartley, and Tony Cripps
24 Jan 2011

The humble SIM card has attracted a lot of attention from mobile industry strategists in recent weeks. After years in which not much of interest has happened to the SIM, there has been a flurry of announcements, some of which have generated a certain amount of angst among network operators.

First, Apple was rumored to have been working with SIM vendor Gemalto to develop a “soft SIM”, which could be provisioned into its devices, and (most importantly) re-provisioned over the air, without the need to insert a physical card at all.

That an unsubstantiated rumor could generate so much heat is itself eloquent testimony to just how sensitive this area is. Then, as part of a parallel – or was it opposing? – development, the GSMA announced the establishment of a working group of major operators to create a specification for a soft SIM to support machine-to-machine (M2M) applications.

The SIM card has been the fundamental token of identity in the GSM system, and its successors, since the standard was unveiled in 1990. What worked well in the context of relatively few high-value customers on long-term contracts works less well now.

In some of the biggest and fastest-growing markets customers frequently change their mobile networks, in response to blizzards of promotional offers. With lifetime value almost a meaningless concept for customers such as this, the cost of purchasing and then handling a physical SIM becomes a significant burden for the operator.

Many operators are looking to the M2M opportunity as an important source of future growth. But the traditional SIM model doesn’t fit well here either, as M2M modules may need to be configured and tested at the factory but may then spend weeks or even months in a long supply chain before final active deployment.

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