Why Total Cost of Ownership Is the Right Measure
The conversation about IoT connectivity is almost always framed in terms of monthly data rates and per-device SIM fees. These are the visible costs on the invoice. The costs that justify SGP.32 are mostly invisible on the invoice – they sit in operational budgets, maintenance line items, and the cost of engineering time spent doing things that should not need doing.
The GSMA has estimated that SGP.32 can reduce operational TCO by approximately 40% over a 10-year device lifespan. This figure is plausible but context-dependent. The savings are much larger for geographically dispersed deployments with long device lifetimes and high operator switching frequency. They are smaller for compact, short-lifecycle deployments with stable network requirements.
The purpose of this analysis is not to validate a specific percentage figure. It is to identify the cost categories where eSIM creates real operational savings, so you can model the numbers for your specific deployment.
The Hidden Costs of Physical SIM Management
The Truck Roll
A truck roll is the industry term for sending a technician to a device location for any reason that requires physical access. When the reason is a SIM swap – replacing a physical SIM card to change operator – the truck roll is a pure operational cost with zero productive value beyond the SIM change itself.
A reasonable baseline for a single truck roll in the UK is £150 to £200, covering transport, labour, and overhead. For a fleet of 1,000 devices that requires a single SIM swap event over its lifetime, the truck roll cost alone is £150,000 to £200,000. This is a cost that simply does not exist with remote eSIM profile management.
SIM Logistics and Warehousing
Physical SIM cards require procurement, testing, labelling, and distribution. For a multi-country deployment, different regional variants must be sourced, tracked, and allocated. Spare SIMs must be warehoused in case of device failure or replacement. SIM inventory management is an ongoing overhead that scales with fleet size.
The Single SKU benefit of eSIM eliminates regional SIM variants. One eUICC chip ships to every market, and the appropriate operator profile is loaded remotely after deployment. The warehousing, logistics, and inventory management overhead for SIM cards disappears.
Operator Contract Management
Managing connectivity contracts across multiple operators, multiple countries, and potentially multiple technology generations (2G, 3G, 4G, 5G) is a significant overhead for enterprise IoT operators. Each contract has renewal dates, minimum commitments, termination clauses, and coverage obligations that require ongoing management attention.
SGP.32 does not eliminate operator contracts, but it reduces the operational friction of switching between them. When a better commercial arrangement becomes available, the switch is a remote software operation rather than a logistics exercise.
The 3G and 2G Sunset Cost
This is the most quantifiable cost driver for physical SIM fleets in the current market. As 2G and 3G networks are decommissioned, devices that relied on those networks require hardware replacement or a SIM swap to access 4G or 5G. For a fleet with physical SIM cards, this is a mandatory truck roll event for every device.
Under SGP.32 with a future-compatible eUICC certified for current standards, the operator profile can be updated over the air as the underlying network technology changes. The hardware investment in the device survives the network transition.
The 10-Year TCO Model
The following is a simplified comparison for a fleet of 500 industrial IoT devices over a 10-year operational lifetime.
| Cost Category | Physical SIM | SGP.32 eSIM |
|---|---|---|
| Initial SIM procurement (500 units) | £500 to £1,000 | Included in hardware cost |
| SIM logistics and distribution | £500 to £2,000 | Zero |
| Operator switch events (assume 2 over 10 years) | £150,000 to £200,000 (1,000 truck rolls) | Zero – remote profile switch |
| Network sunset remediation | £75,000 to £100,000 (hardware replacement or truck rolls) | Minimal – remote profile update |
| SIM inventory management (10 years) | £5,000 to £15,000 (staff time) | Near zero |
| eIM platform subscription (10 years) | Zero | £10,000 to £30,000 (estimate) |
| Total operational overhead | £230,000 to £320,000 | £10,000 to £30,000 |
The data plan costs are assumed to be comparable between physical SIM and eSIM for this analysis. The primary saving is in operational management, not data pricing.
The one number to know: For any fleet where you anticipate changing operator more than once over the device lifetime, the truck roll cost of physical SIM swaps will almost certainly exceed the total cost of an eSIM platform subscription. For geographically dispersed fleets, this is true even with a single operator change event.
Where the Model Does Not Work
SGP.32 TCO savings are smaller or negligible when:
- Devices are in a single fixed location with easy physical access and no planned operator changes
- Device lifetime is less than two or three years
- The fleet is small enough that a single engineer can manage SIM swaps without significant overhead
- The eIM platform subscription cost is high relative to the operational savings on a small fleet
For these scenarios, a well-managed physical SIM deployment may be commercially comparable to eSIM. The decision should be made on operational grounds rather than on principle.
For a guide to evaluating the end user experience of eSIM vs physical SIM, see eSIM End User Benefits. For the network providers who deliver eSIM profiles, see MNO, MVNO and eSIM Resellers.