Blog series: eSIM#3 How did connectivity for sea captains and flight crews turned out to two important companies for eSIM?
You attend investor meetings where every investor is excited for a marketplace business model. Everybody wants but only one can get it! If you have not heard about it meet the marketplace for eSIM!
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In an era dominated by seamless connectivity and global communication, companies like Airalo, GigSky, Truphone, and Ubigi have emerged as pioneers in providing innovative solutions for international travelers and businesses.
As we explore the comprehensive landscape of companies operating in a similar space, we will delve into their unique business models and assess the market sizes of a few key players. What are interaction between different businesses and are there any other opportunities?
There is no specific reason that eSIM is focusing on travelling passengers. To my understanding the main reason is to clearly indicate to MVNOs and MNOs that there is no competition with their customers.
Currently, the consumer can directly can the eSIM from the eSIM market place or from a eSIM provider. For clarity, eSIM provider can also be a traditional MNO or MVNO. In this blog we focus on the new eSIM marketplace Airalo and an eSIM MVNO GigSky, where the founder of the former was focusing on providing connectivity to ships and the latter started as a company specialized in flight crew connectivity.
The eSIM marketplace: Airalo's Pioneering Role in the eSIM Revolution
In today's interconnected world, travel is back on the agenda after a COVID-19 hiatus.
As international travelers seek seamless connectivity, Airalo has emerged as a key player in the eSIM space. Let's dive into their business model, market size, and growth trajectory.
Editors note: Somehow experience and diligeant work in life leads you to opportunities. A quote from the founder Özdermir´s bio: “During the time he managed the global ship supply company, the sea captains, among other things, had always asked him to deliver SIM cards” [6]
Airalo, founded 2018 in Singapore and officially headquartered in Delaware (with offices worldwide), offers a unique proposition: software-based eSIM connectivity for travelers. Their platform provides nearly 700 lower-cost mobile data packages tailored to international travelers.
By leveraging eSIM technology, Airalo eliminates the need for physical SIM cards, making it easier for users to switch carriers without hassle. Airalo operates as a marketplace for eSIM data plans, acting as a middleman between local telecom operators and travelers.
One of the biggest challenges that Airalo faced was to establish relations with mobile network operators (MNOs) and mobile virtual network operators (MVNOs) around the world. Airalo approached this challenge by creating a win-win proposition for both parties. Airalo offered to share a percentage of its revenue with the MNOs and MVNOs, as well as to promote their brands on its platform and social media channels. Airalo also assured them that it would not compete with their existing customers, but rather target a niche market of travelers who would otherwise not use their services.
As a result of its efforts, Airalo has managed to partner with over 200 MNOs and MVNOs across the globe. Some of the notable partners include Vodafone, Orange, T-Mobile, AT&T, Telstra, Singtel, and Reliance Jio.
Airalo's business model centers on flexibility and affordability. Here's how it works:
Wide Range of Plans: Travelers can choose from an extensive catalog of data plans based on their destination. Whether it's a short trip or an extended stay, Airalo offers granular options to suit different needs.
App-Based Activation: Users select their plan through the mobile application and activate it themselves. No more juggling multiple physical SIM cards—just seamless connectivity.
Global Coverage: With coverage spanning over 200 countries and regions, collaborating with local telecom operators to purchase eSIM plans in bulk catering to millions of users worldwide.
Additional revenue streams: Airalo also generates revenue through affiliate programs, where content creators and businesses promote Airalo's services to their audience and earn a commission on each sale
Airalo’s Market Size and Growth
Despite a slow start during the pandemic, Airalo gained momentum in 2022. Their revenue growth rate has been impressive—20% month-over-month—with nearly 1 million downloads monthly over the past three months. The company recently closed a Series B funding round, securing $60 million in equity financing [1]. This round values Airalo at $280 million post-money. Notably, discussions are underway to bring additional investors on board at an even higher valuation—between $800 million and $1 billion [2].
As Airalo continues its growth trajectory, it remains at the forefront of redefining global roaming experiences. With its diverse team of professionals and plans to expand to 53 languages.
eSIM MVNO: GigSky's Innovative Business Model
GigSky, Founded in 2010, is a key player in the eSIM market, operates with an innovative business model aimed at providing global connectivity solutions and data services for both consumers and businesses i.e. international travelers, enterprise customers, and airlines. GigSky operates as a mobile virtual network operator (MVNO), meaning it does not own its own network infrastructure but partners with local carriers worldwide [3].
GigSky has established strategic partnerships with several companies in different sectors and regions.
In late 2013, Norwegian Air Lines started using GigSky's service to support its electronic flight bag (EFB) product. EFB is a digital device that replaces paper-based flight documents and manuals for pilots. GigSky provides mobile data for EFB devices, enabling pilots to access real-time information such as weather, flight plans, maps, and charts. This has been an important step for them to build a niche that extends to the path of today.
In 2015, Apple began offering access to the GigSky service on cellular iPads with Apple SIM which is a technology that allowed users to switch between different cellular carriers without changing the physical SIM card in their devices. It was introduced by Apple in 2014 and was compatible with certain iPad and iPhone models. Apple SIM was useful for travelers who want to avoid roaming charges or access local networks in different countries. This was a significant milestone for GigSky, as it gave them exposure to millions of iPad users who could benefit from their service.
In a new attempt to capture new directions, in 2021, GigSky has partnered with FreedomFi, the open 5G company, and CalChip Connect, the nation's leading IoT distributor, to launch the world's first eSIM based cellular data plan that will utilize CBRS small cell infrastructure deployed by the Helium blockchain community [4].
The key components of GigSky's business model include:
Global Connectivity Solutions: GigSky offers patented eSIM technology, granting users access to global data through local connectivity. This ensures seamless connectivity for users traveling internationally or utilizing IoT applications and services.
Flexible Data Plans: The business model focuses on offering flexible data plans, catering to the diverse needs of consumers and businesses. Whether for smartphones or IoT applications, GigSky's approach is centered on providing convenient and affordable data connectivity worldwide.
The eSIM market is poised for explosive growth, with estimates suggesting a market size of USD 26.8 billion by 2027. GigSky holds a strong position within this landscape, thanks to its early adoption of eSIM where GigSky was among the first MVNOs to embrace eSIM, giving it a head start in understanding and leveraging the technology.
GigSky continuously innovates its offerings, recently launching its "Global Connect" plan for unlimited data in over 100 countries, meanwhile strategic partnerships through the collaborations with leading device manufacturers like Samsung and Google solidify GigSky's position in the ecosystem. Additionally, the mention of GigSky in conjunction with Sierra Wireless in a news release suggests potential partnerships or business activities that could contribute to growth. Furthermore, the inclusion of GigSky eSIM mobile data benefits in the U.S. Bank Altitude Connect product implies an expansion of GigSky's market reach and consumer base [5].
Editor´s note: There is an interesting observation in the eSIM story. eSIM as a market seems too promising to capture. Basically, everyone is a potential customer. However, two of the most successful companies are from the domain have their start in the very niche domain of connectivity for sea captains and flight crew. I personally think the growth potential for eSIM market is huge but I also want to add that this will be a slow change.
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Bio
I'm Mohamed Abdou, an experienced seasoned technical blogger who loves delving into the complexities of the digital world and transforming them into easily understandable insights for readers of varying expertise levels. With more than 18 years’ experience and a robust background in telecommunications with hands on many functions within telecom vendors and operators’ environment i.e. Alcatel-Lucent, Ericsson & Etisalat, my goal is not just to scratch the surface but to guide readers through the layers, making seemingly complex concepts accessible and understandable. Join me in this expedition through the digital landscape, where the language of technology speaks, and everyone is invited to the conversation.
Edited by Murat Gürsu
References & Sources:-
[1] Airalo https://www.airalo.com/blog/press-release:-airalo-raises-$60m-in-series-b-financing
[3] GigSky https://www.gigsky.com/
[5] Crunchbase GigSky - Updates, News, Events, Signals & Triggers (crunchbase.com)
[6] https://www.airalo.com/about-us/ahmet-bahadir-ozdemir