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Are carrier-free SIM cards on the way?

A relaxing of the rules relating to carrier locked SIM cards in the Netherlands hit the news recently. We take a look at what it actually means and examine the potential benefits of this move and how it could go further to create some real carrier competition.
March 21, 2014
sim card vodafone

Does the fact that current SIM cards are tied to specific carriers actually benefit anyone other than the carriers? What if device manufacturers like Samsung and Apple could sell you smartphones with SIM cards already in them? Your network connection could change on the fly, or you’d have the option to change it within your account online. OEMs could negotiate better deals for service and pass the savings along to customers. Hybrids combining Wi-Fi and different public and private networks could provide seamless service wherever you went.

Sounds great, doesn’t it? So, what are the chances of it happening?

Is it just a pipe dream?

The news that the Netherlands has eased the rules regarding carrier agnostic SIM cards was picked up by GigaOM and generated a bit of excitement. If OEMs took over as carriers then, in theory, roaming could be eradicated and we could switch to the best service wherever we happened to be. This idea is the “soft SIM” and it’s the kind of thing that gives carriers nightmares. Unfortunately, it’s a fair distance off what the Netherlands legislation is actually talking about.

“This is meant primarily for large scale M2M deployments, think smart metering, vehicles, Kindles, machinery etc. In these cases it is prohibitively expensive to switch SIM-cards even if you could,” explained Rudolf van der Berg, “…it is certainly not for normal consumers and it is not about soft-SIMS. It is about hard coded SIMs that are under control of the M2M deployer.”

A variety of devices now use SIMs for always-on communication
A variety of devices now use SIMs for always-on communication.

Rudolf van der Berg is a policy analyst currently working for the Organization for Economic Co-operation and Development (OECD). He has been pushing for this change for years and wrote some of the substantiating research.

So what does the Netherlands legislation mean?

The Netherlands has liberalized the IMSI numbers for carrier agnostic SIM-cards. IMSI or International Mobile Subscriber Identity numbers are unique IDs. They consist of an MCC (mobile country code) followed by an MNC (mobile network code), followed by an MSIN (mobile subscription identification number).

“The Netherlands has so far taken a partial step, by allowing the shared use of 2 MNCs,” says van der Berg.

One of the ways this idea was sold was to highlight the cost involved in switching SIM cards when they are fixed in devices, sometimes even soldered onto a board. As we start to put SIM cards in more devices, from cars to cameras, this issue grows more important.

Give us an example

“Now I do see a role for OEMs but not in the area of mobile phones, but much more in innovations for tablets, laptops, digital cameras and other gear. That equipment often stays at home for long periods, making it uneconomical to buy a monthly data subscription, but when you are on the road or abroad, having access to data would be really really nice. Having to go hunting for a SIM is a chore. Roaming is expensive…” van der Berg suggests, “In such a case a tablet with 3G and embedded SIM registered ASUS, Samsung or something could be really handy. They could provide a function where you buy access on a network or all three networks for X per day, through a simple menu. In addition they could make agreements with providers of Wifi for EAP-SIM authentication even if the tablet only supports Wifi and no 3G/4G.”

sim card
Imagine never having to swap SIM cards again

He certainly has a point, and it’s an issue that OEMs really need to tackle. We’ve already seen a move in the US carrier space as T-Mobile offers 200MB monthly free data for tablets if you get a SIM from them. Amazon offered 3G access for Kindle owners for free, but it soon applied a 50MB per month limit. You can still download as many books as you want, but you won’t get more than 50MB a month through the browser. If you want 4G LTE for your Kindle tablet then you have to sign up for a plan from AT&T or Verizon.

People don’t want to have multiple data plans with different carriers, so the ability to switch your service for the SIM in your car or your tablet without having to rip the SIM out is going to be vital.

Indoor call quality

There’s another side to this and it relates to indoor call quality. We’ve all felt the pain of a pathetic signal when we enter a building, sometimes rendering your phone unusable. It’s a serious problem and it can even be a safety concern. Netherlands is a special case here.

“For one or two years anyone can set up a low power GSM network in the DECT Guardband, without any license. Over 3000 organisations have done this so far. For example many hospitals did…” van der Berg explains, “Until now they had no official MNC to broadcast with. This has now been fixed. The benefits lie in improved indoor coverage compared to traditional DECT and to be independent of the mobile network, for example in case of disaster or for the Dutch equivalent of the O2 Arena and Wembley, to make sure that when the stadium is full all the staff can still use their phones on the DECT Guardband and their own PBX (private branch exchange).”

cell tower antenna
Weak signal is still a problem, despite the ubiquity of cellular antennas

In most of the rest of the world we are relying on signal boosters or carrier-supplied devices that effectively draw a stronger signal through your Wi-Fi router or employ Wi-Fi calling to combat poor signals indoors. If businesses and public organizations were allowed to operate their own internal networks, then you can bet a lot of them would.

Where’s the competition?

These moves in the Netherlands are certainly a positive step, but there’s a long way to go. The OECD report on Machine-to-Machine Communications puts it well: “Further liberalisation, in wireless markets, could enable M2M-users to buy wholesale access to mobile networks, to change mobile networks without switching SIM-cards and to directly negotiate national and international roaming…” going on to suggest that, “Such changes could lead to a more dynamic market for mobile wholesale access, mobile roaming and a strengthening of competition between mobile network operators.”

That’s the key right there, how about some genuine competition driving carriers to do a better job? Why can’t we have automatic national roaming, so you get the strongest signal possible wherever you happen to be? Why should the mobile network operators own our SIM cards when it enables them to limit our service, lock us in, and drain every last drop of profit out of us? If the mobile network had efficiency and customer satisfaction as its primary goal it would look completely different than it does right now. You may say I’m a dreamer…