There are thousands of businesses in the UK and Europe right now whose core value proposition is built on a component that is being engineered out of existence.
They stock SIMs. They ship SIMs. They manage SIM contracts. They take a margin at every step. Some of them have been doing it for twenty years and doing it well.
The problem is not that they’re doing it badly. The problem is that the thing they’re doing is being automated away at the infrastructure level – and most of them either don’t know it yet, or are choosing not to look directly at it.
This post is about what happens to the SIM reseller channel when eSIM matures. Not the optimistic version where everyone pivots successfully and the market grows. The realistic version, with named examples, real numbers, and an honest account of who is structurally exposed.
If you work in this channel, this is worth reading. If you’re a customer of someone in this channel, it’s worth understanding what it means for your supplier relationships.
What the Channel Actually Looks Like
Before the reckoning, the structure.
The IoT SIM distribution chain has historically run something like this:
MNO produces network access and SIM credentials. They have the spectrum, the infrastructure, and the billing relationship with the end customer – or they wholesale it to someone who does.
MVNO / Aggregator buys wholesale access from one or more MNOs, bundles it into multi-network SIM products, operates the management platform, and sells down the chain. This layer has genuine technical depth when done well – multi-IMSI SIMs, SM-DP+ platforms, proper connectivity management tooling.
Sub-MVNO / Reseller buys from the MVNO layer, applies their own commercial packaging, and sells to end customers or to distributors. Their value add is typically customer relationships, vertical market knowledge, and support. Their margin comes from the spread between what they buy and what they sell.
Distributor / VAR in some channels adds another layer – volume purchasing, credit, logistics, and a broader product portfolio that happens to include SIMs alongside hardware.
End customer buys a SIM, installs it, manages a contract, and calls someone when it stops working.
Each layer is a viable business when the thing being sold – the SIM – requires human handling at every stage of its lifecycle. When someone has to stock it, ship it, insert it, and potentially replace it, there is genuine logistical value in the chain.
The question the eSIM transition asks is simple: what happens to each layer when the SIM no longer requires human handling?
The 1NCE Moment
In 2017 a German startup called 1NCE launched a product that should have caused a serious conversation throughout the IoT SIM channel. It didn’t, partly because the market was still early and partly because it was easy to dismiss as a niche proposition.
1NCE offered a single SIM with 500MB of data and 250 SMS, valid for ten years, for a one-time fee of €10.
No monthly charges. No contract. No renewal. One payment, decade of connectivity.
The roaming coverage was real – partnerships with Deutsche Telekom and others gave it European and global reach. The target market was low-data IoT: asset trackers, environmental sensors, agricultural monitoring. Devices that send small amounts of data infrequently across long operational lifetimes.
1NCE did not invent cheap IoT connectivity. What they did was make the floor price visible.
If a startup with wholesale MNO relationships and a lean platform can deliver ten years of IoT connectivity for €10, the implied margin available to every layer above that price point is the gap between €10 and whatever you’re currently charging for an equivalent service.
For many resellers, that gap turned out to be significant – and most of it was margin for handling a physical object and managing a commercial relationship, not for providing technical value.
1NCE grew quickly. By 2022 they had over three million SIMs deployed. By 2023, Nokia had acquired a strategic stake. The floor price model attracted volume that the traditional channel model cannot compete with on pure connectivity pricing.
The lesson is not that every IoT customer wants the cheapest possible connectivity. Many don’t. Enterprise IoT customers value reliability, support, and commercial flexibility over raw price. The lesson is that the connectivity itself – the raw data transport – has a visible floor price, and that floor is close to zero.
Everything a reseller charges above that floor has to be justified by value that isn’t the connectivity.
What SGP.32 Actually Removes
The eUICC and eSIM architecture post on this site covers the technical stack. The SGP.32 transition post covers what it means for the industry broadly. This post is specifically about what it removes from the reseller value proposition.
The traditional reseller provides value at several points in the SIM lifecycle:
Pre-deployment: Advising on network selection, sourcing the right SIM, managing the logistics of getting it to the customer or to the device manufacturer.
Deployment: In some models, managing the physical SIM insertion process or coordinating with the customer’s deployment team.
In-life: Handling the support tickets when connectivity fails, managing network changes when coverage issues emerge, processing SIM replacements when hardware fails.
End of life: Managing contract termination, SIM deactivation, and any associated logistics.
SGP.32 removes or automates most of this.
Network selection becomes a platform decision, not a procurement decision – the SM-DP+ platform provisions the optimal network profile for the device’s location automatically. Physical logistics disappear – there is no SIM to ship because the profile is delivered over the air. Network changes are handled by the platform without a support ticket or a SIM replacement. Contract management becomes platform subscription management.
What’s left? Support for edge cases in the provisioning workflow. Integration work connecting the eSIM platform to the customer’s management systems. Advice on platform selection and commercial model design. Professional services around deployment architecture and security policy.
That is a smaller, more specialised, more genuinely technical business than “we stock and ship SIMs.” It is a viable business. It is not a business that can support the same number of participants at the same margins as the old model.
The Consolidation Evidence
This isn’t speculation. The M&A activity in the MVNO and IoT connectivity platform space over the last decade tells the story directly.
The SGP.32 transition post covers the major deals: Cisco buying Jasper for $1.4 billion in 2016, NTT acquiring Transatel in 2019, Tele2 acquiring Eseye in 2021, Thales absorbing Gemalto for €4.8 billion in 2019.
The pattern in every case is the same: a strategic buyer with scale acquires a company with genuine SM-DP+ platform capability and multi-network relationships. They are not buying customer books. They are buying the platform layer.
The companies being acquired are the ones with something to buy. The companies not being acquired are the ones with nothing to buy – the resellers and sub-MVNOs whose value lives in customer relationships and SIM logistics, not in platform infrastructure.
What happens to the second group?
Some will be absorbed by the platform layer players as customer acquisition. An MVNO with a strong enterprise customer base but no platform depth is worth acquiring for the revenue, even if the technical stack is replaced. This has happened repeatedly in adjacent markets – the managed services consolidation of the 2000s ran the same playbook.
Some will be acquired cheaply, for their customer relationships alone, as the acquirer knows the technical value is minimal. These deals happen below the press release threshold.
Some will simply lose customers as those customers migrate to platform-direct models or to better-capitalised resellers who have made the move up the stack. This is the slow version. Revenue declines gradually. Cost base doesn’t. The business becomes unprofitable over three to five years rather than collapsing overnight.
And some will pivot successfully. Not many. The ones that do will look quite different to what they were.
The Businesses Most at Risk
Not all resellers are equally exposed. The risk profile depends on where the value actually sits.
Highest risk: pure SIM logistics businesses. If the primary value proposition is sourcing, stocking, and shipping SIMs – with support and relationship management as secondary services – the core function disappears with remote provisioning. These businesses need to move or they will be displaced.
High risk: vertical specialists without platform access. A reseller who has built a strong position in, say, fleet management or smart metering – but whose technical capability stops at sourcing the right multi-network SIM – is exposed. They have customer relationships and domain knowledge, but the platform layer they depend on is being consolidated above them.
Medium risk: resellers with genuine support capability. If the value proposition includes real technical support – deployment architecture advice, integration work, troubleshooting complex provisioning scenarios – there is a defensible position. eSIM provisioning failures and edge cases are real. Enterprise customers deploying at scale need someone who can navigate them. This value doesn’t disappear with SGP.32. But it has to be real, not just a support email address.
Lower risk: resellers who have already moved up the stack. The businesses that recognised early that connectivity was becoming a commodity and repositioned around managed connectivity services, IoT platform integration, and device lifecycle management are in a substantially better position. They’ve already done the painful work.
The awkward middle: resellers with proprietary customer portals. Some resellers have invested in building customer-facing connectivity management tools – dashboards, usage reporting, alert management. This is real value. The question is whether those tools can evolve to sit above an eSIM management platform rather than beside a SIM logistics operation. In most cases they can, but it requires deliberate investment and the right platform partnerships.
What Survival Actually Looks Like
The businesses that come through this transition intact share a few characteristics. None of them are comfortable positions to arrive at from a standing start.
They own or have deep access to the platform layer. Either through building their own connectivity management capability, or through a genuine partnership with an MVNO or aggregator that gives them real platform depth – not just white-labelled SIMs at a margin. The distinction matters. A reseller who white-labels another company’s SIM is one commercial decision away from being cut out. A reseller who has genuine API integration with an SM-DP+ platform and adds value through that integration is harder to displace.
They sell outcomes, not connectivity. The conversation with the customer is not “here are your SIMs, here is your price per megabyte.” It is “here is your connected device estate, here is its uptime, here is what we do when something goes wrong, here is the SLA.” That conversation makes connectivity a line item in a service, not the product itself. Service contracts with performance SLAs are stickier and more valuable than SIM contracts.
They have vertical depth. The resellers with the strongest positions are those who know a specific market – fleet and transport, energy and utilities, retail and payments, industrial automation – well enough to be a genuine solutions partner rather than a connectivity supplier. Vertical expertise justifies margin in a way that SIM logistics never could at scale.
They have moved their commercial model. Per-SIM, per-megabyte pricing is the old model. The new model is platform access fees, managed service retainers, device lifecycle contracts, and performance-based arrangements. Moving the commercial model is the hardest part – it requires changing how customers think about what they’re buying, which means changing how you sell.
The Honest Advice
If you’re running a business in the IoT SIM channel and reading this, the honest position is this:
The question is not whether the transition happens. It is happening. The SGP.32 ecosystem is maturing, the consolidation is accelerating, and the floor price on raw connectivity is not going back up.
The question is whether you have two years or five years before the pressure becomes existential – and what you do with that time.
Two things worth doing now, regardless of where you sit in the risk matrix:
Audit your actual value. For every customer relationship you have, be honest about what you provide that they couldn’t get more cheaply or more effectively from a platform-direct model. If the answer is primarily “we handle the logistics and we’re responsive on support,” that’s a relationship at risk. If the answer includes “we know their deployment architecture, we’ve integrated with their systems, and we’ve saved them significant operational cost,” that’s a relationship with a future.
Map your platform exposure. If your business depends on a single MVNO relationship for its SIM supply, understand what happens to your commercial model if that MVNO is acquired, changes its partner terms, or moves to a direct sales model for your customer size. Platform dependency without platform depth is a structural risk that eSIM makes more acute, not less.
The businesses that will look back on this period as an opportunity rather than a reckoning are the ones that use the transition window to move deliberately up the value stack – before the transition forces the decision at a price they can’t control.
Further Reading
This post is part of the euicc.co.uk series on the eSIM transition and what it means for the industry. The other posts in the series cover the technical and commercial landscape in more depth:
- eUICC Explained: The Stack Behind eSIM and Who Controls the Connection – the architecture: eUICC, SM-DP+, SGP.02/22/32 explained without the vendor spin
- What Comes After SGP.32? – the adoption trajectory, the M&A consolidation evidence, and what eSIM means for costs and services at every level of the chain
- iSIM: The End of the SIM as a Component – where the hardware goes next, and why NTN closes the last gap in global IoT coverage
Credits and Sources
1NCE – Pricing model, deployment figures, and Nokia investment referenced from publicly available 1NCE commercial documentation and press releases.
GSMA – SGP.32 specification and eSIM market context sourced from GSMA published documentation at gsma.com.
Acquisition references – Cisco/Jasper, NTT/Transatel, Tele2/Eseye, and Thales/Gemalto deal details based on publicly reported transactions. Full sourcing in the SGP.32 transition post.
euicc.co.uk — eUICC and eSIM intelligence for the IoT connectivity industry.