A feature in the iPhones that Apple unveiled this month could drastically reduce high international mobile roaming charges, a major hidden cost of business travel. The Apple XS, XS Max and XR phones include embedded subscriber identification modules, or eSIMs. Price per minute of talk time on foreign trips typically is measured in dollars rather than cents, but an eSIM allows the user to download a local calling plan when he or she arrives.
Stories are legend among travel managers of travelers racking up thousands of dollars in mobile fees on a single foreign business trip. At one time, international travelers were accruing such significant charges that procurement departments began negotiating with their service providers," said Madia Sargent, a former travel manager and now Chicago-based VP and managing director of consulting services for travel management company Direct Travel.
Businesses resorted instead to negotiating "corporate plans that as long as you purchase in advance you avoid high roaming charges," Sargent added. Alternatively, some travelers take an additional, local phone with them or take just one phone but remove the normal SIM card and replace it with one purchased in the destination country. Either option means operating a second phone number and therefore potentially missing calls and messages to the user's regular number.
Sargent believes eSIM has great potential. "The ability not to have to plan ahead when travelers go internationally is a huge advantage. This will automate some of the more manual processes companies have put in place to mitigate high roaming costs, although trying to get a traveler to do something that involves even one or two steps can be challenging."
Truphone—which sells pools of discounted minutes to corporations, as well as data that any of those corporations' employees can draw on around the world—has welcomed the advent of eSIM. "You will be able to download an app and that will take you through a really simple purchase path that involves selecting a plan for a group of countries and then checking out with ApplePay or a credit card," said Truphone chief business development officer Steve Alder. "Operators will have to become more competitive, so the whole industry's prices will come down."
Asked exactly how much cheaper roaming will become, Alder said: "Our pricing won't be going live until the end of October. We're trying to get this as close as possible to what you pay at home. There will be a little bit of a premium, but it should feel like you are paying domestic rates for your traveling."
Sargent agreed but added a note of caution. "I do think it's going to reduce the cost of roaming, but the mobile carriers are going to try to make it up somehow. They aren't going to take a hit just because Apple innovated." In Sargent's view, "some larger organizations are probably not auditing their phone expenses as much as they should." Given that, more vigilance may be needed.
Alder also predicted that eSIM will change the way multinational corporations purchase roaming. "Companies will look for solutions beyond their local carriers. Generally, they look to well-known brands within their own country. This might open people's eyes that there are some global companies which can give something a little more creative. Each office around the world is quite protective of its mobile phone service, which often results in decentralized procurement for mobile. This gives an opportunity for centralized purchasing."
Apple is not the first company to offer eSIM.
It already has appeared in a couple Google models. But Alder believes adoption
by Apple "is the turning point for eSIM." Apple has adopted a
standard set by GSMA, a global trade organization of mobile network operators.
However, the technology is not yet universal. To date, eSIM is offered by
operators in 10 countries but is not supported by all operators in those
markets. In the U.S., for example, AT&T, Verizon and T-Mobile offer eSIM
but not Sprint. "I think that will very quickly change over the next few
weeks and months," said Alder.
Truphone said it will be one of two operators
to offer multinational data plans on the iPhone eSIM, with the service
available in 33 countries.