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Local telcos rush to eSIM despite risks
The new technology is a double-edged sword that could help telecommunication service providers cut costs but may hamper customer retention.
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A customer walks into an XL Center in Bandung, West Java, in February 2019. (Antara/Raisan Al Farisi)
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lmost all major Indonesian telecommunication service providers now offer embedded SIM (eSIM) cards as they react to smartphone manufacturers producing more eSIM-enabled devices, and even eSIM-only phones.
The new technology can help telcos cut costs, but it also makes it so easy for customers to switch from one provider to another that it might change the competition landscape and hamper their profit margins in the long run, analysts say.
XL Axiata launched its eSIM service on March 20 and registered more than a thousand purchases in the first four days. The firm's group head of mass segment Lyra Filiola said she was surprised at the demand, given that the company had not conducted a large marketing campaign.
XL Axiata was the third telco in Indonesia to offer the eSIM service, after Indosat in December last year and Smartfren back in 2019.
The only major telco that has not yet offered eSIM services, state-owned Telkomsel, said it was still assessing the industry’s readiness for adopting the new technology.
In a nutshell, an eSIM is a module permanently planted inside a smartphone. It can store multiple phone numbers or cellular plans in a single device, but only one number can be active at a time.
Customers can buy eSIM phone numbers through telcos' websites and use them as their primary or a secondary number.
