Could eSIM IoT lock emerging markets out of global cellular connectivity?

Details: Henrik Aagaard; Category: Enterprise Ecosystems; 06 May 2026; 247 views

For many in the telecoms industry, the promise of cellular IoT has always been global scale.

The idea is straightforward: build a connected product once and deploy it anywhere. Whether that is a smart meter, an asset tracker, or industrial equipment, cellular networks offer the only truly global infrastructure capable of supporting that vision. Yet in practice, global scale has proved harder to achieve.

While IoT connections continue to grow – with the GSMA forecasting more than 38 billion by 2030 – the expansion of connected devices across regions remains uneven. Deployments that work in Europe or North America do not always translate easily into Latin America, Africa, or parts of Asia.

Historically, this has been attributed to familiar challenges: network coverage, roaming costs, regulatory fragmentation, and the operational complexity of managing connectivity across multiple markets. What this disparity has not historically accounted for, however, is that the systems now responsible for managing connectivity flexibility may themselves be built around the markets where devices are designed – not the markets where they need to go.

This is because a new constraint is now emerging – one that is less visible, and potentially more structural. And one that sits within the industry’s latest attempt to solve these very challenges. The issue centres on eSIM IoT and the latest GSMA SGP.32 specification, widely positioned as a breakthrough that would finally enable global, flexible connectivity at scale.

However, a key nuance in how the standard is being implemented is creating a potential constraint. A legitimate loophole allows eIM (eSIM IoT remote manager) implementations to be non-configurable – a design choice that can limit access to alternative connectivity providers, particularly in emerging markets. If left unaddressed, this form of lock-in will undermine the very flexibility the standard was designed to deliver and ultimately limit the ability of cellular IoT solutions to expand across emerging regions at scale.

This is more than a commercial issue for emerging markets. Cellular IoT is increasingly being used to generate the real-world data that feeds AI-driven systems – from logistics and energy to infrastructure and agriculture. If connected products cannot be deployed flexibly across regions, emerging markets risk being excluded not just from connectivity, but from the AI data ecosystems built on top of it.

In parallel, cellular IoT is becoming a significant part of the overall IoT landscape. Ericsson estimates that it will account for around one in five of all IoT connections globally within the next five years – reaching approximately 7.8 billion connections by 2031, up from around 4.5 billion today. In other words, how cellular IoT scales will increasingly shape how – and where – digital services and AI-based applications are delivered.

A standard designed for flexibility
The GSMA’s SGP.32 specification for eSIM IoT has been widely welcomed as a major step forward. It is designed to enable remote provisioning and management of connectivity, allowing devices to switch networks without requiring physical SIM changes. In theory, this should make global deployment significantly faster and easier. Connectivity becomes a software decision rather than a hardware one.

For emerging markets in particular, this flexibility matters. It offers the potential for products developed elsewhere to adapt to local network conditions, regulatory requirements, and cost structures – all over the air and without requiring a physical redesign. However, the reality depends not just on the standard itself, but on how it is implemented.

Where flexibility can be lost
A recent GSMA report highlights an important detail: a majority of available eIM (eSIM IoT remote manager) implementations are non-configurable. The eIM is the system responsible for managing connectivity profiles over the air on a device. While the SGP.32 standard allows for multiple eIM associations per device, it does not require that an eIM implementation supports this freedom to choose.

This creates a subtle but important constraint. Devices may still be able to switch between different connectivity profiles within a given eIM. But if that eIM does not support transferring control to another eIM, the device is effectively tied to that original provider’s ecosystem of connectivity options. In practical terms, the flexibility promised at the standard level may not fully materialise at the deployment level.

A shift in where decisions are made
This challenge is compounded by a broader shift in how connectivity decisions are made. Increasingly, eSIM IoT is forcing connectivity decisions at the design and manufacturing stage by OEMs and SIM vendors, rather than by end customers at deployment. As a result, architectural choices – such as which eIM is embedded into a device – are often made long before a product reaches the markets where it will eventually be used. That makes these decisions far harder to reverse. What appears to be a technical configuration choice during development can become a long-term, irreversible constraint once devices are deployed at scale.

The emerging market impact
For short lifecycle consumer devices, this may not be critical. For long-lived IoT deployments expected to last 10 to 15 years, it can be. Consider a device developed in Europe or North America using a particular eIM provider. At launch, it may have access to a defined set of network partners, covering its initial markets. But as the business grows, it may look to expand into new regions – for example Brazil, Nigeria, or Indonesia.

At that point, connectivity requirements often change. Local network performance, available cellular technologies such as LTE-M or NB-IoT, pricing models, and regulatory constraints all vary significantly between countries. If the original eIM ecosystem does not include suitable local options, the device may not meet the technical or commercial requirements for deployment. And if the eIM cannot be changed, the only alternative may be to redesign the hardware or manually switch physical SIM cards. That fundamentally alters the economics of expansion.

What was expected to be a software-level adjustment becomes a costly re-engineering exercise, involving redesign, re-certification, and new production runs. For many developing market deployments, that is simply not commercially viable. The result is that products designed for global scale may, in practice, remain confined to their initial markets. And it is emerging markets that risk being locked out.

The telecoms industry has encountered similar dynamics before. Early mobile phones were once locked to a single network by design. This limited competition and economies of scale, slowed innovation, and put access out of reach for many lower income markets. It was a similar story with earlier generations of machine-to-machine (M2M) eSIM solutions. While they enabled remote provisioning, they often remained tied to operator-controlled platforms. The result was technical flexibility without true commercial freedom. Initial adoption was strong, but broader scaling proved more limited. There is a risk that the same pattern could repeat.

Why it matters now
This issue comes at a time when the role of connectivity itself is changing. For years, IoT connectivity has been sold as a bundled service – combining SIMs, data, platforms, and support into long-term contracts. That model made sense when coverage and price were the primary variables.

But as connectivity becomes programmable, and switching becomes technically possible, those rigid commercial models are increasingly at odds with how the technology is intended to function. If connectivity cannot be adjusted as products evolve across geographies, regulations, and use cases, it risks constraining not just devices, but the businesses built on top of them.

For emerging markets, the implications are significant. If products cannot be easily adapted to local conditions, those markets risk being excluded from new deployments altogether. This is not simply a question of network access, but of participation in the wider digital and AI data-driven global economy.

An implementation challenge, not a standards failure
It is important to stress that this is not a flaw in the SGP.32 standard itself. The specification provides the technical foundation for flexible, multi-vendor connectivity. The issue lies in how that flexibility is implemented – or, in some cases, not fully enabled.

From a vendor perspective, restricting configurability can simplify service delivery and protect commercial relationships. From a market perspective, it can introduce friction that slows adoption and limits reach.

If connectivity is to function as true infrastructure, which is what eSIM IoT and the GSMA SGP.32 standard encourage, it must behave more like a utility – interchangeable, adaptable, and responsive to changing, competitive requirements over time.

A question for the industry
Cellular IoT has long been positioned as the technology that can deliver truly global connectivity for machines. That vision depends on more than coverage and standards. It depends on ensuring that the systems built on top of those standards remain open, adaptable, and aligned with the realities of global deployment.

For emerging markets that adaptability is essential. Without it, the gap between where connected devices are developed and where they can be deployed will persist – or even widen.

As the industry moves forward with eSIM IoT, the question is not whether the technology can support global scale. It is whether the way it is implemented will allow that scale to be realised in practice.

The telecoms industry – and the GSMA – should address this lock-in loophole now, before current deployment decisions define the limits of IoT expansion for the next decade.

In the meantime, buyers can ensure that they will get what eSIM IoT promised with a single due diligence question. Before selecting an eIM vendor, ask this: does your provider support changing the eIM, the SIM vendor, and the connectivity provider independently? If a vendor cannot answer yes to all three, the flexibility SGP.32 promises is not what you will get in practice.

The expectation should be that all three are supported as standard. Until that becomes the norm, due diligence at the point of selection will be essential. Because locking customers in – risks locking emerging markets out – of their full growth potential.

Henrik Aagaard is the Chief Technology Officer and Co-founder of Onomondo.