Mobile network operator on-demand subscription management study

Mobile network operator on-demand subscription management study

Executive In December 2013, GSMA, the global mobile phone operators association, 2 Mobile network operator on-demand subscription management study

summary Mobile network operator on-demand subscription management study 3

Our survey Context, objectives and methodology 4 Mobile network operator on-demand subscription management study

How it works: embedded SIM basic system architecture Subscription manager for data preparation Securely packages pro les to be provisioned on the euicc Manages the installation of these pro les onto the euicc MNO Uses subscription manager to manage pro les Reuses existing provisioning interfaces and processes Subscription manager for secure routing 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 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 Mobile network operator on-demand subscription management study 5

Survey objective: to understand how mobile operators perceive this initiative and whether it can 1 6 Mobile network operator on-demand subscription management study

Use case details Mobile network operator on-demand subscription management study 7

Initial device provisioning SIM cards Use case 1: Carmaker builds cars and ships them to various local car distributors Local distributor asks local mobile operator to provision SIMs Local mobile operator delivers connectivity to the connected car The car is sold to the customer with local connectivity Local MNO Customer PoS Local MNO Customer in M2M tenders SIM cards 8 Mobile network operator on-demand subscription management study

Use case 2: Carmaker negotiates connectivity contract with MNO A and sells a connected car to the end user Customer uses car with connectivity from MNO A Carmaker can switch connectivity over the years in response to regulatory constraints or change in ecosystems Carmaker Customer Connectivity MNO A Carmaker Connectivity x MNO x Connectivity MNO B MNO A MNO A MNO B Use case 3: SIM and device manufacturers sell non-provisioned SIMs and devices to MNO MNO ships phones with nonprovisioned SIMs to local stores Customer selects tariff plan and MNO salesperson provisions SIM with relevant pro le SIM maker MNO MNO store Customer Salesperson Device maker Provisions within the HLR licennse Prepaid Capped Post-paid Provisions customer s SIM with a prepaid offer HLR Mobile network operator on-demand subscription management study 9

and anywhere Use case 4: SIM and device manufacturers sell non-provisioned SIM and portable gaming device to the MNO MNO ships portable gaming device with nonprovisioned SIM to local stores and additional retailers Customer buys portable gaming device equipped with SIM When needed, activates SIM on chosen offer SIM maker Device maker MNO New distribution channel MNO store Customer Welcome to MNO X Please slelect your tariff plan: 10 MB 1 GB 10 GB Additional retailer Customer 10 Mobile network operator on-demand subscription management study

Use case 5: User subscribes to an offer within the portfolio of local MNO User travels to another country in the EU with his phone User can choose to switch on local network If selected, local network delivers connectivity to user Do you want to switch to local network? Customer Yes No MNO MNO Mobile network operator on-demand subscription management study 11

12 Mobile network operator on-demand subscription management study

Mobile operators technology strategies are likely to Low bandwidth Telematics M2M High bandwidth Infotainment Connected devices market More business Mobility usage High bandwidth Low bandwidth SIM not easily accessible SIM easily accessible Health care, cameras Connected watches Ebook reader M2U Home usage Connected TV, photo frame Tablets Core business Smartphones Low applicability High applicability Mobile network operator on-demand subscription management study 13

18 15 500b- 550b 2014 ARPU ( /month per connection) 12 9 6 2020 2014 750b- 0b 800b 160b- 190b 2020 2014 3 2020 5b- 10b 0b- 50b 0 0b 1b 2b 3b 4b 5b 6b 7b 8bn Volume (billions of connections) Smartphones/tablet/PC M2M Consumer electronics Mobile operators disagree on the most appropriate operating 2 3 4 normal to use reprogrammable SIMs, some operational 14 Mobile network operator on-demand subscription management study

revenue development opportunities, scope cutting costs and the need to In addressing revenue development, cost reduction, Local connectivity Local MNO (partner) End user Device manufacturer (e.g., carmaker) Customer relationship Contractual terms Billing Service level agreements Bootstrap connectivity Lead MNO Local connectivity Local MNO (partner) Main relationship Local connectivity Internal/intercompany ows Mobile network operator on-demand subscription management study 15

In regulatory compliance, Perceived for mobile operators A lead MNO should be positioned as a bootstrap Closed ecosystems (consortiums) are the best go-to-market strategy for MNOs Use case 4 euicc increases mobile data penetration by connecting consumer electronics euicc supports shared data bucket marketing strategy Enabler of M2M market development Use cases 1 and 2 MNO should be the SM-DP owner Use case 3 Reduces SIM logistic costs Comply with regulation as alternative to permanent roaming SM-SR owner can be any player in the ecosystem Perceived threats for mobile operators Overall return on investment (ROI) of euicc Use case 5 Lower expected revenues on tablet connectivity Increase in SIM total cost of ownership (TCO) euicc raises signi cant security threats for MNOs Supports embedded SIM liability-induce costs Increases churn on core business (smartphones) Facilitates real-time network arbitrage Need to massively upgrade IT and business processes Loss of customer ownership Divergent feedback Convergent feedback Categories of impacts Source: mobile operators interviews Revenues Costs Value chain Legal 16 Mobile network operator on-demand subscription management study

Mobile network operator on-demand subscription management study 17

Appendix: glossary integrated circuit cards data preparation secure routing 18 Mobile network operator on-demand subscription management study

Mobile network operator on-demand subscription management study 19

Contacts Prashant Singhal Holger Forst Amit Sachdeva Etienne Costes Bruno Perrin Thibaud Chabrelié Senior Manager Louisa Melbouci Guillaume Djourabtchi Manager EY About EY How EY s Global Telecommunications Center can help your business GA 1001853