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How an Alternative Approach to SIM Card Provisioning Helps Operators Cure their Logistics Headaches

Today’s wireless operators have to deal with ever-growing numbers of SIM cards. Most operators employ a process where SIM cards are pre-provisioned in the network before shipping into distribution channels, but these resources become increasingly strained as SIM card volumes increase.

Pre-provisioning requires the allocation of core network capacity and resources well in advance of a card being used, so unnecessary costs are incurred for inactive SIMs. This approach also means that when SIM card starter packs are shipped, they must have specific, relevant MSISDNs printed on the pack, which can only be sent to specific regions.

Pre-provisioning often hampers the operator’s ability to be agile and respond rapidly to market pressures and competitive initiatives, by making it impossible for them to move cards quickly around the country to meet demand or fulfil targeted marketing campaigns.

In fast-growing emerging telecoms markets including India, China and much of Asia and Africa, these issues are particularly important as they have the potential to hold up market growth at a time when it is just beginning to accelerate. In some emerging countries, the problem is exacerbated by the complex distribution structures, involving multiple different regions and a complex channel incorporating a tangled web of distributors, dealers, sub-dealers and retailers.

The operational cost of managing rapid SIM card growth can also be a serious concern for operators. The pre-provisioning model means that every SIM card requires space on the Home Location Register (HLR) and other network platforms, even if it is never actually used in a device and never generates any revenue. With large numbers of SIM cards being distributed to support market growth, operators often incur significant costs by buying and commissioning more network platforms than are required to support their subscriber base.

Pre-provisioning can also lead to an uneven distribution of SIM cards across vital elements like the HLR. Uniform loading of these elements relies on accurate forecasting significantly in advance of sales and any variation from forecasts can result in a sub-optimal distribution. This takes considerable time to correct and may involve expensive, and risky, re-homing of subscribers between HLRs.

Countrywide number utilisation regulations imposed by many national telecommunications regulators can often end up putting further pressure on operators to optimise their SIM card provisioning processes. Some regulators charge a monthly rental as well as a one-off fee for MSISDN ranges. If the utilisation of MSISDNs, for prepaid users, is low using the pre-provisioning approach, additional number ranges are needed that would not be required if the utilisation of the provisioned prepay subscriptions (and hence MSISDNs) was higher.

Operators across developing telecoms markets are now beginning to turn to a new approach to SIM card provisioning, known as dynamic provisioning, to free up valuable network capacity and reduce operational costs. With this approach, key network elements such as the HLR only need to be provisioned at the time of first use. In addition, this helps operators achieve more effective marketing initiatives by enabling them to distribute large numbers of SIM cards packaged for particular promotions, without worrying about whether there is sufficient capacity to provision them in the network. Finally, operators that use dynamic provisioning are typically able to achieve simplification across their SIM logistics chain, resulting in significant cost savings associated with lower channel inventory.

Dynamic provisioning is typically rolled out as part of a phased implementation. Often, it is introduced first in selected regions, before later being rolled out nationally.

Once fully deployed, dynamic provisioning helps revolutionise the SIM provisioning process by enabling operators to activate cards ‘on-the-fly’ upon first use. The ability to optimise phone number usage and streamline SIM logistics significantly reduces network overhead costs. Dynamic provisioning also helps operators offer a unique customer experience to subscribers by allowing dynamic number selection and other value-added services right to the user’s handset upon first use.

Looking Ahead with Confidence

Developing telecoms regions often feature countries with complex supply chains, regional numbering or complicated distribution structures. In these countries, simplifying SIM card logistics and distribution processes can be key to driving enhanced business agility.

As we have seen, operators now have an approach that offers the potential to resolve this issue – and they are increasingly looking to provisioning systems that enable them to streamline SIM card logistics and consequently achieve business agility and competitive edge.

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