[Era of 1 Phone 2 Numbers①] Two Numbers on One Phone, eSIM to Be Used from September 1

eSim, Chip Embedded in Device Provided to Consumers
Introduced Overseas in 2016, Domestic Adoption Somewhat Delayed

To replace a regular USIM, a separate pin is required. Additionally, a tray to hold the USIM chip is needed. An eSIM, however, is embedded directly within the smartphone itself, eliminating the need for both a tray and a pin.

[Asia Economy Reporter Lim Hye-seon] The USIM (Universal Subscriber Identity Module), which had to be issued by visiting a mobile carrier store every time to use a smartphone, is finally disappearing. An era is coming where smartphones themselves are equipped with embedded eSIMs (embedded Subscriber Identity Modules), allowing users to connect to the internet and directly subscribe to their desired carrier from home. It will also be possible to use two phone numbers on a single smartphone, which is expected to unleash fierce competition in the mobile telecommunications market.

eSIM Service Starting September 1

The government will introduce eSIM services starting September 1. The embedded digital SIM, eSIM, is built into the device during the smartphone manufacturing process, so consumers do not need to purchase a separate USIM. The usage is simple. By scanning a QR code provided by mobile carriers, the carrier’s profile is downloaded to the eSIM, completing the activation process. There is no longer a need to visit a carrier store to receive a USIM. Non-face-to-face and online activations will become commonplace. Plans can also be registered through each carrier’s application. The cost is cheaper than a USIM (7,700 KRW); only a download fee of 2,750 KRW is required for the eSIM.

The hassle of purchasing a new USIM every time one changes numbers or losing the USIM chip somewhere in the house and having to buy a new one is expected to disappear. With eSIM, users simply delete the existing carrier profile and download the new carrier’s profile, eliminating the need to purchase a separate chip.

Two Numbers on One Smartphone

eSIM consists of two types: single eSIM and dual eSIM. Single eSIM uses only the eSIM without a USIM. Dual eSIM allows simultaneous use of both USIM and eSIM. One smartphone can have two phone numbers. Using dual SIM, unlike traditional two-number services, users can independently use calling and messaging functions, effectively combining two phones into one. Users can apply different plans for personal and business use and make calls separately, which is useful for those who used to carry multiple smartphones.

Users can receive discounts based on the line, i.e., the device’s unique identifier (IMEI). IMEI is an internationally assigned unique number for communication devices, allocated per device or modem chip. Dual SIM devices have two IMEIs because two SIM cards can be issued and activated. For example, one can receive a handset subsidy discount from SK Telecom and a selective contract discount from LG Uplus. This eliminates the need for a ‘second phone,’ saving device costs.

Introduced Overseas Since 2016

Domestic eSIM adoption is somewhat delayed compared to overseas. Carriers have been reluctant to adopt eSIMs. From the carriers’ perspective, USIM sales revenue decreases, and average revenue per user (ARPU) also declines. Easier number portability increases subscriber churn. Carriers reportedly earn about 100 billion KRW annually from USIM chip sales. The cost of USIM chips is less than half the actual price.

The Ministry of Science and ICT judged that eSIM adoption could no longer be delayed and formed an ‘eSIM consultative body’ with carriers and manufacturers last year to discuss policy implementation. Regulatory improvements, including revisions to notifications, were completed in May.

eSIM is already widespread overseas. The GSMA published eSIM standard specifications in 2016. As of December last year, 175 operators in 69 countries including the US, UK, and Germany provide commercial eSIM services. According to market research firm Counterpoint Research, the number of eSIM-compatible phones is expected to surge from 364 million units in 2018 to 2 billion units by 2025, meaning eSIM will be supported on 50% of global smartphones.

Carriers have completed changes to their IT system data structures and are conducting testing. An industry official said, “After completing product development and store guidance, phones equipped with eSIM functionality will be available for sale starting September 1.”