Voda’s Travel eSIM has landed – will we see eSIM consolidation

If you’re yet to be convinced that travel eSIM is THE next big thing for the industry then take note: Vodafone has launched “a worry free” mobile data travel SIM for use in over 200 worldwide destinations. 

It’s actually quite extraordinary to think how far travel eSIM has come in such a short time. In 2017, MVNO World looked at eSIM as a disruptive technology to watch. Now the scrappy challenger designed to encourage customers not to roam but to get better value through downloading a local SIM, is a real contender for differentiation. 

Market primed for growth 

By 2028, travel eSIM spend is expected to grow from €3.1 billion to nearly €7 billion. The big catalyst to it going mainstream, is largely due to the digital platform advances that MVNOs pioneered. You know they’ve done a good job when the networks invest in digital to keep up. 

MNOs couldn’t ignore the fact that customers have been embracing travel eSIM all over the world via banking, retail, and travel offers and, in part, thanks to the shift in handset design. In pure facts and figures, some 67% of consumers will consider travel eSIM as an alternative to their current solution for accessing data when travelling. 

And, anecdotally, enterprise users are using travel eSIM too. It’s perfect for those keen to keep costs down and avoid some of the quite extreme roaming charges and bill shock incidents we have come to see in the news (everyone has an example).

Is this the death knell for independent travel eSIM?

Clearly this has started to hurt the big mobile network operators, with the irony being they are offering a challenger to their own roaming business. It’s no doubt it’s a calculated move as customers are rejecting high costs of using data abroad with their home network.

Does this sound the death knell for independent travel travel eSIM providers? I don’t think so.

Firstly, many of the providers are selling the service under their own brand as part of an extension to existing services customers use before they travel. Airlines, travel insurance companies, travel agents and foreign exchange travel money companies can wrap the service into their user journeys and sell travel eSIM add ons for travellers. 

This gives them the upper hand as they will understand consumers’ travel plans in advance. eSIM can be sold months before the trip when the customer books flights, accommodation and airport parking. Whereas the mobile network only knows the customer is travelling when they land. It’s therefore a great value added service to sell, and the travel company gets multiple opportunities to remind customers to buy a SIM ahead of departure.

Secondly, as Revolut has done very successfully, the costs can be blended across all those services allowing free or heavily discounted offers. What’s not to like?

Thirdly, there is a customer perspective to consider. Yes, the networks are trusted brands, but the customer perception is they are the reason why they have had to take a travel eSIM in the first place. To put it bluntly, customers feel they have been ripped off on roaming so, I think, they will be less inclined to hand over their money to MNOs, even if it is for a cheaper travel eSIM solution.

Obviously what Vodafone has in its favour is high equity brand trust, and the benefit of digital investments that allows it to see when customers pop up abroad, and trigger an offer for a more cost effective solution.

That said, I still think it’s a bit of a stretch for customers. In the short term, it means customers will become more aware of travel eSIM and its value, and see that they have more choice. 

Consolidation on the cards

However, I do think we will see significant consolidation in the travel eSIM market over the next three to five years and probably some acquisitions. Who knows maybe the MNOs will be doing some shopping for a partner with scale and relationships as we speak. 

That’s something to think about – if you’re an MVNO, do you take advantage of more hype in the market and grow to compete, or do you scale for a sale? Big questions that need to be answered soon, I suspect. 

If you are a brand considering a travel eSIM proposition, a network working out your response to travel eSIMs or a travel eSIM provider wanting to work out how you survive and thrive through consolidation, then get in touch. Our team has experience of working through all scenarios and can get you on the right road with truly independent advice.