The price of roaming data is the single biggest rip-off in telecom. Like a toxic relationship, every one of us has silently endured these exorbitant fees for decades. We don't complain. Defeated, we're left looking for WiFi in cafés or buying side-SIMs from a stranger at an airport.
But now there's a better way.
Travel eSIMs have liberated us from greedy rent-seeking operators, giving everyone access to roaming data at local prices.
A stepping stone technology
Capitalizing on growing eSIM adoption and the opening of the roaming market, travel eSIM apps like Airalo and Holafly are popping up faster than AI companies. But they're just a stepping stone technology. Acquiring customers at a $15 average basket and hoping they’ll return on their next holiday is not a solid business model. The “bill shock” from their advertising campaigns alone is too steep to be sustainable in the long-term.
While the market for travel eSIMs is projected to grow to $8.7 billion by 2028, it will be well-established consumer apps, rather than standalone travel eSIM companies, that will benefit from the upside.
This year alone, we’ve seen several giants enter the ring. Nubank released travel eSIMs as a free perk for premium users, Revolut launched travel eSIMs as an easy-to-purchase and install add-on through their app, and NordVPN has released a roaming eSIM app.
In our pockets
When it comes to winning our roaming dollars, popular consumer apps hold a major advantage over companies like Airalo. They already have a captive audience of digitally native consumers. They are, quite literally, already in our pockets.
They also have access to rich user data which they can use to target us before we’ve even packed our suitcase. When we buy a flight on our card, make an FX transaction, or purchase travel insurance, they can sign us up for a travel eSIM on the spot. They’re at our fingertips, at the exact moment we’re primed to purchase. This slashes their customer acquisition costs to zero, allowing them to undercut competitors without losing margin.
These apps are masters of UX, it’s how they won their customers in the first place. With the right partner, they can integrate travel eSIMs within their product seamlessly in a matter of days, allowing users to download an eSIM and connect in one tap, all without leaving their app.
The power of embedded connectivity
The biggest challenge consumer apps face is securing brand loyalty and driving revenue per user. The best way to achieve that is to offer more value to customers.
Apps like Airbnb and Uber have already found success by diversifying into new products and services. Travel eSIMs are an obvious contender. With adoption rates projected to grow by 440% over the next five years, travel eSIMs have significant upside. But more importantly, data roaming is one of life’s essentials, and nothing drives app loyalty like offering something people really need.
By offsetting costs against other products, consumer apps can think creatively about how they position travel eSIMs within their user experience. They can bundle eSIMs with premium memberships, use them as a purchase incentive for other high-margin products, and even reward customers for their loyalty with extra data.
This is their real trump card. Consumer apps don’t need to sell travel eSIMs as a standalone product. Instead, they can embed them within their user experience and use them as a catalyst for earning more value from customers. Who is going to buy a travel eSIM from a standalone provider when you can get one bundled free when you book your hotel, buy your flight, or manage currency exchange?
As travel eSIMs shift from a standalone product to a fully embedded service, we can all look forward to beautiful user experiences, superior customer support and premium data whenever we travel. No more bad connections in sweaty cafes. No more surprise bill.
Meanwhile, consumer apps will further weave themselves into the fabric of our lives, strengthening their position as the go-to providers for life’s core essentials and, in turn, extracting more value from us.