eSIM adoption is on the rise thanks to travel and device compatibility

As a expertise, eSIM has been round for a decade. Nevertheless, international eSIM adoption was round 3% final yr and can solely cross 5% this yr.

Regardless of these numbers, analysts, eSIM startups and traders are proud of eSIM’s upward trajectory, largely because of journey.

Machine compatibility

One of many predominant components for that is telephone producers releasing gadgets with eSIM options.

The primary batch of eSIM smartphones arrived in 2017 and 2018, with the Pixel 2 and iPhone XR among the many most notable telephones. In 2022, Apple ditched the bodily SIM card slot to go eSIM-only for the US market, and Google adopted go well with with the Pixel 10 this yr.

This yr, Apple upped the ante by releasing the eSIM-only iPhone Air and providing an eSIM-only mannequin of the iPhone 17 sequence as an possibility in additional than 11 international locations. A key benefit of those eSIM-only telephones is that they provide barely longer battery life than fashions with a hard and fast bodily SIM slot.

Analytics agency Counterpoint mentioned that in 2024, eSIM smartphone penetration was solely 23%. The US is the strongest marketplace for eSIM, with 41% of gadgets launched in 2024 having eSIM functionality.

Till not too long ago, eSIM has been a characteristic of high-end gadgets, however that’s slowly altering. The GSMA mentioned that within the first half of 2025 alone, manufacturers have launched greater than 60 eSIM-enabled smartphones.

China might be a significant factor in eSIM adoption. This October, after the launch of Apple’s eSIM-only telephone and a few hiccups, China’s telecom suppliers started providing eSIM assist. Pablo Iacopino, an analyst on the GSMA, mentioned home producers akin to Huawei, Xiaomi, Oppo and Vivo are additionally prone to launch extra native or supported eSIM gadgets.

These producers have a big share in economically delicate markets in Asia and Africa. They could step by step embody eSIM assist throughout the value vary to assist home demand.

“Chinese language manufacturers, once they see that Chinese language MNOs have launched eSIM companies for the Chinese language home market, they may most likely begin introducing eSIM to a wider vary of smartphones, together with the mid-range and low-end,” Iacopino mentioned. “However I do not suppose they’re going to go eSIM-only immediately. They will begin with each bodily and eSIM assist, earlier than transferring to eSIM-only fashions.”

Presently, even inside eSIM-enabled gadgets, few persons are utilizing the expertise — however that is altering. Steffen Sorrell, head of analysis at Kaleido Intelligence, a telecom analyst agency, mentioned it noticed an activation fee of 30% on eSIM-capable gadgets in 2024. The agency estimates the speed will go as much as 75% by 2030.

Journey is a good catalyst

Whilst you’re touring, eSIM is among the most handy methods to get related. A survey by GSMA mentioned that 51% of people that use eSIM use it for journey. Plus, it is a safer resolution, provided that the eSIM gadget is usually tied to safe {hardware}, making tampering tough.

These components have been optimistic for eSIM supplier startups Airalo, Holafly, eSIM.me, Nomad and Truely. Lithuania-based safety supplier Nord additionally launched an eSIM service referred to as Saily. Most of those firms have seen progress of their buyer base, and that is largely because of journey.

The GSMA mentioned that journey is at present proving to be a robust catalyst for eSIM progress, as frequent vacationers choose to buy gadgets with eSIM assist. Plus, they’ll undertake eSIM for his or her long-term use.

“Folks could expertise eSIM for the primary time whereas touring. These customers who just like the eSIM expertise will come residence and ask their community suppliers to make a change from a bodily SIM,” GSMA’s Iacopino informed TechCrunch on a name.

Airalo is among the greatest eSIM firms round and has been energetic for over six years. The corporate’s CEO, Bahadir Ozdemir, mentioned the app is accountable for many customers experiencing eSIM for the primary time. The corporate carried out a survey on its app final yr, the place 85% of respondents have been first-time eSIM customers.

“Roughly 15% of journey connectivity is powered by eSIMs, and the quantity is rising. As soon as customers learn how they’ll get related with eSIMs, they actually do not need to return to the outdated means (bodily SIMs) of doing it,” Ozdemir famous.

He mentioned that whereas many telecom operators provide eSIMs, it’s not straightforward for purchasers to detect them and apps like Airalo make the method simpler. Community suppliers are additionally fascinated with the journey eSIM market. For instance, Vodafone partnered with UEFA to launch a specialised eSIM for vacationers attending soccer matches throughout the continent.

Development and investor curiosity

Journey-related eSIM startups have seen notable progress. Really talking it has served greater than 70,000 vacationers over the previous two years, with 2x improve in orders this yr. The startup, which raised a further $2 million spherical in June, mentioned that along with partnering with fintech companies and journey apps, it’s also exploring authorities collaborations in varied areas.

NordVPN mentioned its Saily eSIM app noticed a seven-figure person base after its launch in March 2024. The corporate additionally launched a $60-a-month Extremely plan with international protection.

Holafly mentioned it has offered greater than 15 million eSIMs since its launch in 2018 and surpassed $500 million in complete income. The startup famous that of this determine, it earned $200 million in 2024.

Airalo’s profitable $220 million spherical, led by CVC and introduced in July, made it a unicorn and was essentially the most notable eSIM funding up to now two years. In the meantime, French eSIM startup Kolet grabbed $10 million in Collection A funding led by Daphni with participation from ex-Expedia Group CEO Peter Kern and former Apple vice chairman of promoting Jon Gieselman.

Scott Shiao, a director at Goodwater Capital, mentioned the funding focus will likely be on consumer-side travel-related eSIM startups for now, however there could also be a possibility in home markets sooner or later.

Martell Hardenberg, a companion at Antler, mentioned that whereas the journey eSIM use case has grown, many customers may be thought of early adopters and there’s nonetheless loads of room to develop.

“I feel there are alternatives to supply bundled companies to international vacationers or digital nomads for what firms can provide past journey SIM playing cards and make it a worthwhile bundle for these person profiles,” Hardenberg informed TechCrunch.

Buyers are seemingly on the lookout for bid, marketability for the long-term guess as there might be consolidation a couple of years down the road, Kaledio’s Sorrell mentioned.

“The market is certainly on its method to progress, however I feel ultimately we’ll attain a saturation level when it comes to suppliers out there there. So traders will likely be wanting on the long-term viability of the enterprise together with issues like buyer loyalty, high quality of protection, even affiliation with advertising and marketing abilities, how you’ll be able to promote that eSIM, banking firms or airways,” he mentioned.

Challenges in adoption

Some limitations to adoption are schooling, belief and ease of use. Many individuals merely have no idea what an eSIM is.

“Spotify can inform folks to obtain Spotify as a result of folks learn about music, and Netflix can inform folks to obtain Netflix as a result of folks learn about TV exhibits,” Airalo’s Ozdemir mentioned. “However we could not try this with Airalo, as many individuals do not learn about eSIM.”

He famous that the corporate frequently companions with varied influencers to coach folks about connectivity on the undergo eSIM and redirects them to Airalo.

Certainly CEO Eric Dadoun believes that as there’s a regular improve in eSIM-only gadgets, shoppers can be compelled to know concerning the expertise as nicely. He mentioned firms working within the eSIM business will nonetheless concentrate on educating customers about buying prospects in markets the place buying an eSIM-only gadget is non-compulsory.

One of many neatest components of utilizing an eSIM is that if you purchase a plan from any of the apps, you get a QR code in your electronic mail that you must scan to put in the eSIM. This implies you want a second gadget that shows the QR code. The entire course of is cumbersome if you’re visiting one other nation and need to purchase an eSIM whereas at an airport.

GSMA’s Iacopino agreed that the method is cumbersome for a lot of customers, and as adoption grows, eSIM suppliers and gadget producers might want to discover a method to make the method easy.

Kaleido Intelligence’s Sorrell famous that for some community suppliers, the transfer to eSIM is slower, as they’ve legacy expertise and methods which might be proving to be a bottleneck. They can even must make the method of switching to this expertise absolutely digital in order that prospects don’t want to go to a retailer.