Are eSIMs Disrupting Telcos — or Just Skimming the Most Profitable Customers?

At first glance, eSIMs look like a classic disruption story. Travellers land, switch on their phones, and connect instantly without queues, paperwork, or local SIM cards. Roaming fees disappear. Convenience wins. Local telecoms look obsolete.

But look closer and a different picture emerges.

eSIMs haven’t replaced telecom networks. They sit on top of them. And rather than dismantling the system, they may be quietly extracting its most profitable layer.

Before eSIMs, international travellers were a goldmine. Short-term visitors often bought prepaid SIMs at airports or paid high roaming charges. They used lots of data, didn’t complain much, and left before becoming long-term support problems. For local telcos, this was premium revenue without long-term customer obligations.

eSIMs targeted that exact segment.

Most eSIM providers focus on tourists, business travellers, and digital nomads — users willing to pay for simplicity, instant access, and predictable pricing. These are the highest-margin customers in mobile telecoms. Meanwhile, residents, low-income users, and long-term contracts remain with local operators.

This is not accidental disruption. It’s selective extraction.

In practice, eSIM companies don’t build towers, maintain networks, or handle outages. They buy wholesale data access from local telcos, bundle it into global plans, and sell it under their own brand. The infrastructure cost stays local. The customer relationship — and margin — moves global.

Local telcos still do the heavy lifting. They maintain base stations, spectrum licences, fibre backhaul, and regulatory compliance. When networks fail, they fix them. But the premium traveller no longer belongs to them.

This is why many telcos aren’t panicking publicly. Wholesale revenue still flows in. But the unit economics change. Selling bulk data at wholesale rates is very different from selling premium prepaid plans directly to end users.

Margins shrink. Pricing power shifts.

The effect is especially visible in tourism-heavy economies. In countries across Southeast Asia, Southern Europe, the Caribbean, and parts of Africa, airport SIM sales were once a reliable revenue stream. Small resellers, kiosks, and local distributors depended on them. As eSIM adoption grows, that money increasingly bypasses local ecosystems and flows to global platforms headquartered elsewhere.

For national economies, this is quiet leakage.

The consumer experience feels more competitive — dozens of eSIM brands, instant comparisons, simple activation. Underneath, many of these brands rely on the same handful of global roaming agreements and carrier partners. Choice exists at the retail layer, not necessarily at the infrastructure layer.

Competition looks intense. Control remains concentrated.

Regulation adds another layer of tension. In many countries, physical SIM cards require ID registration for security and compliance reasons. eSIMs often bypass local registration entirely, operating through international roaming frameworks. That creates regulatory asymmetry. Local telcos carry compliance costs that global eSIM platforms largely avoid.

From a security and governance perspective, this raises uncomfortable questions. Who is responsible for lawful interception? How are fraud and misuse handled across borders? The system works — but it works unevenly.

Still, eSIMs aren’t invincible.

They remain parasitic on local networks. Without domestic coverage, spectrum access, and maintenance, eSIMs fail instantly. Local telcos retain leverage through wholesale pricing, coverage quality, and network prioritisation. In regions where domestic competition is limited, telcos can still dictate terms.

This is why eSIM coverage is strong in popular travel corridors and patchy elsewhere. Global convenience masks local fragility.

There’s also a behavioural shift that benefits destination economies, even as telcos lose margin. Travellers with cheap, instant data use more ride-hailing, navigation, food delivery, and digital services. They move more freely, spend more spontaneously, and rely less on hotel or tour intermediaries. Connectivity becomes a demand accelerator.

So the economic impact is mixed. Local telcos lose direct premium customers. Other local businesses gain more digitally enabled consumers.

Whether that trade-off is good depends on where you sit.

For consumers, eSIMs are an unquestionable improvement. Lower friction, transparent pricing, and immediate connectivity. For local telcos, they are neither pure disruption nor harmless innovation. They are margin skimmers.

This pattern isn’t new.

It mirrors what happened in payments, where global wallets sit on top of local banks. Or in accommodation, where platforms sit on top of local housing markets. Infrastructure stays local. Value capture moves global.

eSIMs may simply be the telecom version of platformisation.

The long-term question isn’t whether eSIMs will replace telcos. They won’t. The question is whether telcos can reclaim the customer relationship — or whether they accept a future as regulated infrastructure providers while global platforms own the interface, brand, and margin.

In that future, telecoms become utilities. Reliable. Essential. Low-margin.

eSIMs don’t kill the network.

They monetise its most profitable edges.

And as travel becomes always-on, borderless connectivity will feel normal. The disruption won’t be visible. It will show up quietly in balance sheets, wholesale agreements, and national revenue flows.

The real shift isn’t technological.

It’s economic.

And it’s happening one traveller at a time.