Distributors supplying the UK electronics OEM community, often partner with manufacturers of electronic components and modules. They may also sell networking and connected devices from multiple global manufacturers, wired and wireless controllers and sensors.
Their business model is largely based on one-off sales. Sales revenues can be difficult to predict, as they can fluctuate with market conditions. Growing a sustainable business from one-off sales can be challenging, especially with bills and salaries to pay. Many investors prefer recurring revenue business models, as they can attract a higher EBITDA multiple.
What is an eSIM?
eSIMs are mobile data SIM cards, which can be embedded into connected devices or delivered as a traditional plastic SIM. In the eSIM model, a device is ready to deploy anywhere network coverage exists. If a device moves and crosses networks, its profile can be updated quickly and securely. Instead of swapping plastic SIM cards, profiles are downloaded and managed on a device as needed.
What problem does eSIM solve for the distributor?
4G data is an easy add-on to connected devices, increasing ARPU and adding a valuable, predictable revenue stream for distributors. Recurring revenues provide much-needed stability. When you rely on one-off sales, you are vulnerable to wild fluctuations in month-to-month revenue, but things are much more predictable with recurring revenue.
What about their customers?
eSIMs provide cost-effective multi-network 4G data for IoT rollouts. They are configurable OTA (Over The Air), so network providers can be changed without the often high cost and hassle of swapping out the SIMs.
Distributors can choose the tariff required based on the amount of data the customer needs and the country (or countries) that the SIM will operate in. Therefore, there are no more unexpected roaming charges to worry about.