eSIM adoption is increasing thanks to its compatibility with travel and devices

eSIM as a technology has been around for a decade. However, global eSIM adoption rate was around 3% last year and will only exceed 5% this year.

Despite these numbers, analysts, eSIM startups, and investors are optimistic about eSIM’s upward trajectory, thanks in large part to travel.

Device compatibility

A major factor for this is phone makers launching devices with eSIM features.

The first batch of eSIM-equipped smartphones arrived in 2017 and 2018, with the Pixel 2 and iPhone XR among the most notable. In 2022, Apple ditched the physical SIM slot for an eSIM only in the US market, and Google followed suit with the Pixel 10 this year.

This year, Apple upped the ante by launching the eSIM-only iPhone Air and offering the eSIM-only model of the iPhone 17 series in over 11 countries as an option. One of the main advantages of these eSIM-only phones is that they offer slightly more battery life than models with a physical SIM slot.

Analytics firm Counterpoint said that in 2024, the penetration rate of smartphones with eSIM technology will reach only 23%. The US is the strongest eSIM market, with 41% of devices launched in 2024 having eSIM capabilities.

Until recently, eSIM was a feature of high-end devices, but this is slowly changing. In the first half of 2025 alone, brands launched more than 60 eSIM-enabled smartphones, the GSMA said.

China could be a major factor in the adoption of eSIM technology. In October this year, after the launch of Apple’s eSIM-only phone and some hiccups, telecom providers in China began offering eSIM support. Local manufacturers such as Huawei, Xiaomi, Oppo and Vivo are also likely to launch more devices with native eSIM or supported devices, said Pablo Iacopino, an analyst at GSMA.

These manufacturers have a large share in economically sensitive markets in Asia and Africa. It could gradually include eSIM support across price ranges to support local demand.

“When Chinese brands see that Chinese mobile operators have launched eSIM services for the local Chinese market, they will likely start offering eSIM across a wider range of smartphones, including the mid-range and low-end market,” Iacopino said. “But I don’t think they’ll go eSIM-only right away. Rather, they’ll start by supporting both physical eSIM and eSIM, before switching to eSIM-only models.”

Currently, even within eSIM-enabled devices, only a few people use this technology – but that is changing. Stephen Sorrell, head of research at Kaleido Intelligence, a communications analytics firm, said it observed a 30% activation rate in devices with eSIM capabilities in 2024. The company estimates that rate will rise to 75% by 2030.

Traveling is a great motivator

An eSIM is one of the most convenient ways to connect while traveling. A GSMA survey showed that 51% of people who use an eSIM use it for travel. Additionally, it is a more secure solution, since eSIM devices are often linked to secure hardware elements, making them difficult to tamper with.

These elements have been positive for eSIM startups, such as AirAlo, Holafly, eSIM.me, Nomad, and Truely. Lithuania-based security provider Nord has even launched an eSIM service called Saily. Most of these companies have seen their customer base grow, thanks in large part to travel.

The GSMA said travel is currently proving to be a strong catalyst for eSIM growth, with frequent travelers preferring to purchase eSIM-enabled devices. In addition, they can adopt eSIM for their long-term use.

“People may experience an eSIM for the first time while traveling. Those users who love the eSIM experience will go home and ask their network providers to make the switch from a physical SIM,” GSMA’s Iacopino told TechCrunch over a phone call.

AirAlo is one of the largest eSIM companies around and has been active for over six years. The company’s CEO, Bahadir Ozdemir, said that the application is responsible for many users trying the eSIM card for the first time. The company conducted a survey on its app last year, where 85% of respondents were first-time eSIM users.

“Nearly 15% of travel communications are powered by eSIMs, and the number is growing. Once users figure out how to call using an eSIM, they don’t really want to go back to the old way.” [physical SIMs] Ozdemir indicated to do so.

He said that while a lot of telecom operators offer eSIMs, it is not easy for customers to discover them, and apps like Airalo make the process easier. Network providers are also considering the travel eSIM market. For example, Vodafone has partnered with UEFA to launch a specialist eSIM for travelers attending football matches across the continent.

Growth and investor interest

Travel-related eSIM startups have seen significant growth. Truely said it has served more than 70,000 passengers over the past two years, with demand growing twice as much this year. The startup, which raised $2 million in an extension round in June, said that apart from partnering with fintech services and travel apps, it is also exploring government collaboration in different regions.

NordVPN said its Saily eSIM app saw a seven-figure user base after launching in March 2024. The company also launched a $60 per month Ultra plan with global coverage.

Holafly said it has sold more than 15 million eSIMs since its inception in 2018 and its total revenue exceeded $500 million. The startup indicated that it earned $200 million from this figure in 2024.

AirAlo’s blockbuster $220 million round, led by CVC and announced in July, made it a unicorn and was the most prominent eSIM investment in the past two years. Meanwhile, French eSIM startup Kolet has secured $10 million in Series A funding led by Daphni with participation from former Expedia Group CEO Peter Kern and former Apple VP of Marketing Jon Gieselman.

Scott Xiao, director of Goodwater Capital, said the investment focus will be on eSIM travel-related startups on the consumer side for now, but there may be an opportunity in local markets in the future as well.

Although the use case for eSIM for travel is growing, many users can be considered early adopters, and there is still plenty of room for growth, said Martel Hardenberg, partner at Antler.

“I think there is an opportunity to offer bundled services to global travelers or digital nomads around what companies can offer other than travel SIM cards and make it a profitable package for those user profiles,” Hardenberg told TechCrunch.

Investors are likely to look for offers and marketability for a long-term bet that there could be a merger within a few years, Caledio’s Sorel said.

“Obviously the market is on the way up, but I think sooner or later we will reach a saturation point in terms of service providers in the market there. So investors will look at the long-term viability of the business along with things like customer loyalty, quality of coverage, and even tie-in to marketing capabilities, and how you can promote eSIM, whether that’s through airlines, banks or taxi companies.”

Challenges in adoption

Two barriers to adoption are education, trust, and ease of use. A lot of people don’t know what an eSIM is.

“Spotify can ask people to download Spotify because people know something about music, and Netflix can ask people to download Netflix because people know about TV shows,” Airalo’s Ozdemir said. “But we couldn’t do that with Airalo, because a lot of people don’t know about eSIMs.”

He noted that the company regularly collaborates with various influencers to educate people about on-the-go calling via eSIM and redirect them to Airalo.

Truely CEO Eric Dadon believes that since there is a steady rise in eSIM-only devices, consumers will be forced to familiarize themselves with the technology as well. He said companies in the eSIM industry will remain focused on user education to acquire customers in markets where purchasing an eSIM-only device is optional.

One of the trickier parts of using an eSIM is that when you purchase a plan from any of the apps, you get a QR code in your email that you need to scan to install the eSIM. This means you need a second device that displays the QR code. The whole process is cumbersome if you are visiting another country and want to purchase an eSIM card when you are at the airport.

GSMA’s Iacopino agrees that the process is cumbersome for many users, and as adoption grows, eSIM providers and device makers will need to figure out a way to make the process seamless.

Kaleido Intelligence’s Sorel noted that for some network providers, the transition to eSIM is slower, as they have legacy technologies and systems that have proven to be a barrier. They will also need to make the transition entirely digital so customers don’t have to visit the store.