In October 2025, the three major telecom operators received approval from the Ministry of Industry and Information Technology (MIIT) for the commercial trial of eSIM on mobile phones. Brands such as Apple, Huawei, OPPO, and Honor have subsequently launched eSIM-supported models one after another.
More than a year has passed, but how many people have you seen applying for eSIM at business halls?
The "eSIM Industry Development Research Report (2026)" released by the China Academy of Information and Communications Technology (CAICT) in August 2026 shows that the cumulative number of eSIM connections in China has exceeded 230 million, with the IoT (Internet of Things) sector contributing over 180 million connections. Meanwhile, the smartphone eSIM penetration rate in the North American market has reached 39%, Europe maintains at 27% to 28%, and the proportion in the Chinese market has risen from 8.5% in 2024 to 13% in the first quarter of 2026.
It is not that the technology is immature, nor that chips cannot be manufactured. The dilemma of eSIM popularization in China is essentially a structural issue involving a tug-of-war among interests, security, and habits.
01. Why Are Operators Not Enthusiastic?
The biggest technical feature of eSIM is over-the-air (OTA) provisioning. Users can complete card activation, plan changes, and even mobile number portability (MNP) online, without needing to visit a business hall or wait for a physical SIM card to be delivered. This is convenient for users but not very friendly to operators.
eSIM can complete MNP in just over ten seconds, whereas traditional physical SIM card portability requires users to visit a business hall in person and go through the entire process. Once the threshold for portability is lowered, the risk of user churn will increase. Data shows that the annual churn rate for eSIM users overseas is 18% higher than that for physical SIM card users.
The more direct impact of eSIM on operators lies in channels and value-added services. The offline business halls of the three major operators are not only places for card activation but also the main battlegrounds for promoting value-added services such as broadband, contract phones, and video memberships.
With eSIM activation, portability, and cancellation all completed online, the channel value of business halls is marginalized. Another source of revenue is international roaming. Users traveling abroad can directly activate the eSIM of local operators without paying exorbitant roaming fees. According to market data, travelers using eSIM spend an average of USD 5.50 per GB of data, compared to USD 8.57 for traditional roaming services.
According to public reports, Zhang Jialong, an expert in network evolution at Ericsson's Northeast Asia Network Products Department, once commented that operators have mixed feelings about eSIM. eSIM greatly simplifies the MNP process, while operators have conflicting feelings between user retention and competition. However, he also pointed out that GSMA data shows that even in North America, where eSIM penetration has reached 40%, no significant increase in churn rate has been observed. This indicates that eSIM does not necessarily exacerbate user churn, but may instead become a booster for operators' digital operations.
02. Regulatory Concerns
If the operators' lack of enthusiasm is an issue of interests, then the regulators' caution is a matter of bottom lines. The remote provisioning feature of eSIM bypasses the identity verification during the delivery of physical SIM cards. In 2023, some lawbreakers exploited OTA vulnerabilities to batch-register eSIM numbers using false identity information for telecom fraud and mass spam text messaging.
Subsequently, the three major operators suspended the one number, dual terminal service for smartwatches and other businesses on the grounds of system maintenance and upgrades. This incident made the regulatory authorities extremely cautious about eSIM. The strategy adopted by the MIIT is prudent and inclusive, which is to open up the commercial use of smartphone eSIM, but requiring offline real-name activation and prohibiting domestic users from remotely activating services of overseas operators.
These security measures are directly translated into the cost of user experience. Currently, to apply for a smartphone eSIM in China, the user must bring their ID card to a designated business hall in person to complete facial recognition and device verification on-site. Non-local numbers cannot be processed across provinces and must be handled in the home location. Compared to the experience in the physical SIM card era where one could simply find a nearby business hall to get it done, this is even more troublesome.
03. Device-SIM Binding and Number Quantity Restrictions
Theoretically, eSIM should support OTA provisioning, one-click switching, and multiple numbers on one device, but this has been encapsulated by a series of technical restrictions in China. China Mobile's "5G Mobile Phone Product White Paper (2026 Edition)" explicitly requires that each eSIM terminal can only embed one eSIM chip, which is non-removable and must have device-SIM locking capabilities. This means the eSIM number is strictly locked to the phone's motherboard. In the physical SIM card era, you could pull the card out of an old phone and insert it into a new one, getting it done in a minute. In the eSIM era, changing phones requires a special trip to a business hall to handle complex card replacement procedures.
In addition, the number of phone numbers is also restricted. During the commercial trial phase, each eSIM mobile phone can be bound to a maximum of two eSIM numbers from domestic operators, with no more than two new activations per month.
According to public information, overseas models can store up to eight or more eSIM profiles. For users who need to manage multiple numbers simultaneously, the advantage of multiple numbers on one device with eSIM hardly exists in China. Interconnection among operators has not been fully established either. The eSIM platforms of the three major operators mainly focus on single-brand and single-system testing. Cross-operator profiles are not universal, and switching operators is still constrained by plan contracts and backend approval processes.
04. Why Are Users Not Buying Into It?
Besides supply-side restrictions, there are also obvious cognitive and habitual barriers on the demand side. This cognitive blind spot is particularly evident among the middle-aged and elderly groups, whose familiarity with and psychological dependence on physical SIM card slots are difficult to change in the short term. Manufacturers' strategies have also exacerbated this inertia.
Currently, almost all domestic versions of smartphones supporting eSIM adopt a dual-support scheme of physical SIM + eSIM, with no pure eSIM phones available.
The reason manufacturers consider this is that before clear support from operators and a policy green light, no one is willing to risk the product failing to access the network to promote a cardless phone that might touch the fundamental interests of operators. Moreover, for eSIM certification of each model, the type test fee for consumer electronics eSIM by China Academy of Telecommunication Technology (CAICT) alone reaches CNY 515,000, plus CNY 500,000 for card information security certification (EAL4+), making the total cost reach the million-yuan level. Under uncertain market prospects, this is an investment thrown into the water without even hearing a splash.
05. The True Stage for eSIM May Not Be on Smartphones
The advantages brought by eSIM, such as eliminating the SIM card slot and freeing up device space, have not yet reached the point of being indispensable for current smartphone products. Liang Zhenpeng, a senior industrial economy observer, bluntly stated that eSIM is ultimately just an icing-on-the-cake additional feature for smartphones, rather than an indispensable core configuration.
But in another scenario, the situation is completely different. At CES 2026, Rayneo Innovation released the Rayneo X3 Pro Project eSIM, the first AR glasses equipped with eSIM. The body space of AR glasses is much more compact than that of smartphones, leaving no room for a physical SIM card slot at all; meanwhile, scenarios such as outdoor navigation and real-time translation require independent networking capabilities, which cannot be met by the coverage limitations of Bluetooth and Wi-Fi.
Funds under China Mobile and China Unicom also participated in this round of financing for Rayneo, which exceeded CNY 1 billion. This marks the first strategic investment by domestic operators in the smart glasses track. In scenarios with dispersed devices and harsh environments, such as smart vehicles and industrial IoT (Internet of Things), the remote provisioning capability of eSIM also has a natural advantage over physical SIM cards.
The popularization of eSIM on smartphones in China will not be accelerated in the short term by the release of any specific phone model. It takes time for any relaxation in the operators' interest structure, the regulators' security bottom line, and the users' habitual inertia. But if you shift your focus away from smartphones, on devices like AR glasses, connected vehicles, and smart wearables where every inch of space counts and independent networking is required, eSIM is already becoming the default option.