Telcos in Trouble? eSIM Startups Are Taking Over International Travel
As international travel surges to record levels in 2025, a new battleground has emerged in the telecommunications industry. Global telecom companies are actively bolstering their roaming services to counter growing competition from low-cost eSIM providers. These nimble competitors offer data-only plans at significantly lower rates, challenging the telcos’ traditional revenue streams from international roaming services. eSIM vs roaming
This shift represents not just a pricing war but a fundamental transformation in how travelers stay connected abroad.
The Post-Pandemic Travel Boom
According to the latest World Tourism Barometer from UN Tourism, an estimated 1.4 billion tourists traveled internationally in 2024, indicating a virtual recovery (99%) of pre-pandemic levels. This represents an increase of 11% over 2023, or 140 million more international tourist arrivals. The momentum has continued into 2025, with over 300 million tourists traveling globally in the first quarter—a 5% increase over Q1 2024 and 3% above the same period in 2019, marking the first time global tourism numbers have surpassed pre-pandemic levels in a first-quarter period.
This travel resurgence has been particularly strong in certain regions. The Middle East welcomed 95 million arrivals in 2024, an impressive 32% above pre-pandemic levels. Africa saw 74 million arrivals, 7% more than in 2019, with 9% year-over-year growth in Q1 2025. Europe, the world’s largest destination region, recorded 747 million international arrivals in 2024, 1% above 2019 levels. Even Asia and the Pacific, which had been slower to recover, reached 316 million arrivals in 2024, showing rapid growth with a 33% increase over 2023.
This surge in international travel has created a corresponding spike in demand for mobile connectivity solutions while abroad. Travelers increasingly expect seamless, affordable data access during their journeys, creating both opportunities and challenges for telecom operators worldwide.
Global Telecom Companies’ Strategic Response – eSIM vs Roaming
As international travel surges, telecom operators across Europe, North America, Asia, and the Middle East are actively enhancing their international roaming services to ward off competition from affordable eSIM providers. According to recent reporting from The Economic Times, over the past year, flexible plans for international travelers have helped telecom operators corner the market, pushing smaller competitors to the periphery. However, they now face a growing threat from low-cost travel eSIM providers offering similar services at lower rates.
Enhanced Roaming Packages: Global telcos are offering more comprehensive and flexible international roaming packages that include data, voice, and SMS services, providing a complete communication solution unlike the data-only plans from most eSIM providers.
Competitive Pricing Structures: To counter the price advantage of eSIM providers, traditional operators are revising their pricing structures to offer more value, including daily, weekly, and monthly plans tailored to different travel durations.
Seamless User Experience: Major operators are focusing on providing a seamless user experience, emphasizing the convenience of maintaining the same number while traveling internationally, which is particularly valuable for business travelers who need to remain accessible on their primary number.
eSIM Integration: Recognizing the technological shift, established telecom operators are not just competing against eSIM providers but also integrating eSIM technology into their own offerings. Major carriers worldwide now support eSIM technology, allowing customers to benefit from the convenience of eSIMs while maintaining their relationship with their primary service provider.
The implementation of eSIM technology is guided by regulatory bodies in various regions, such as the Federal Communications Commission (FCC) in the US and the European Electronic Communications Code (EECC) in Europe. These regulatory frameworks are designed to promote fair competition, protect consumer interests, and foster innovation in the telecommunications sector.
The Rise of Low-Cost eSIM Providers
The telecommunications landscape has been dramatically transformed by the emergence of eSIM (embedded SIM) technology. Unlike traditional physical SIM cards, eSIMs are built directly into devices, allowing users to activate mobile plans digitally without the need to physically swap cards. This technological shift has given rise to a new category of service providers: low-cost eSIM companies that specialize in offering data-only plans for international travelers at significantly lower rates than traditional telecom operators.
The business model of these eSIM providers differs fundamentally from traditional telecom operators. Rather than maintaining extensive physical infrastructure and retail networks, these companies operate primarily through digital channels, significantly reducing overhead costs. Their streamlined operations focus almost exclusively on providing data connectivity for international travelers, allowing them to offer more competitive pricing than traditional roaming services.
According to TechRadar’s 2025 analysis, companies like Airalo, Ubigi, and Airhub, just to mention a few, have pioneered this approach, offering eSIM plans covering over 200 countries worldwide. These providers typically partner with local telecom operators in each country to secure wholesale data rates, which they then package and resell to international travelers at prices substantially lower than traditional roaming fees.
Airalo has established itself as one of the most prominent eSIM providers, covering more than 200 countries and regions. Their business model revolves around collaborating with local telecom companies worldwide, allowing them to offer competitive rates that vary by location. According to their website, they serve over 20 million users globally and offer flexible plans ranging from short-term local connectivity to regional and global packages.
Ubigi, developed by Translatel-NTT, has been operating since 2017 and covers over 200 countries. Their competitive advantage includes offering 5G connectivity in more than 40 destinations at no additional cost and providing unlimited data options in certain regions. Their pricing structure is transparent with no hidden fees, making them particularly attractive to budget-conscious travelers.
The pricing strategies employed by eSIM providers represent a significant disruption to traditional telecom revenue models. For example, Ubigi offers a 10GB Europe plan valid for 30 days at €16, providing coverage across multiple European countries. For frequent travelers, there’s an annual plan offering 5GB per month (totaling 60GB) for €59, ensuring consistent connectivity throughout the year. Additionally, Ubigi provides a 7-day unlimited data plan for Europe at €28, catering to short-term travelers needing extensive data. These rates are often a fraction of what traditional telecom operators charge for international roaming, making eSIMs a cost-effective alternative for travelers.
Data-Only eSIM Plans vs. Traditional Roaming: A Detailed Comparison
The most striking difference between data-only eSIM plans and traditional roaming services lies in their cost structures. According to a 2025 analysis by BM Magazine, eSIMs offer pre-paid data plans at local rates, often slashing costs by 50-80% compared to carrier roaming fees. This significant price gap has become a major driver for travelers seeking more affordable connectivity options while abroad.
Traditional roaming services typically follow one of two pricing models: pay-as-you-go or daily passes.
Pay-as-you-go roaming can be extremely expensive, with some providers charging up to €10 per MB of data. This means that even simple activities like sending a photo over WhatsApp could end up costing more than an entire meal.
Daily roaming passes offer more predictable pricing, usually charging a flat fee of €8 to €15 per day for a set amount of data. However, these costs can add up quickly during longer trips, making them less economical for extended travel.
In contrast, eSIM providers offer destination-specific data packages at rates much closer to local prices. For example, in Europe, eSIM data plans typically range from €2 to €6 per GB, while traditional roaming on a pay-as-you-go basis can cost €10 to €15 per GB.
For travelers heading to Asia, the gap is even wider: eSIMs offer data at €1 to €5 per GB, whereas traditional roaming can range from €10 to €25 per GB.
These price differences become especially important on longer trips or for travelers who rely heavily on mobile data for work, streaming, or communication.
Beyond pure cost considerations, eSIMs offer significant advantages in terms of flexibility and convenience. Traditional roaming locks users into their home carrier’s partner network in the destination country, regardless of that network’s quality or coverage. If the partner network has poor service in certain areas, travelers have no alternative but to endure subpar connectivity.
eSIM technology, on the other hand, allows travelers to choose from multiple local networks, selecting the one with the best coverage for their specific location. According to WoWo eSIM’s 2025 analysis, this flexibility is particularly valuable in countries with varied network coverage, where the ability to switch between carriers can mean the difference between reliable connectivity and frustrating dead zones. eSIM vs roaming
Another significant advantage of data-only eSIM plans is the improved transparency and control they offer over data usage. Most eSIM providers offer dedicated apps that allow users to monitor their data consumption in real-time, purchase top-ups as needed, and receive notifications when approaching their data limits. Traditional roaming services often lack this level of transparency, making it difficult for travelers to track their usage and potentially leading to bill shock upon returning home.
While data-only eSIM plans excel in providing affordable internet connectivity, they typically do not include traditional voice calling or SMS services. This represents a limitation compared to traditional roaming, which maintains all the functionality of the user’s home mobile service. However, this limitation has become increasingly irrelevant for many travelers who primarily rely on internet-based communication apps like WhatsApp, FaceTime, or Zoom for both messaging and voice/video calls.
The Competitive Landscape and Future Outlook
The PwC Strategy& Report highlights that eSIM growth presents significant challenges for telecom operators globally. Unlike previous disruptions such as WhatsApp’s impact on SMS services, the rise of eSIM-enabled business models could be harder for telecom operators to recover from. Competitors offering eSIM already provide activation journeys that are simpler than those offered by traditional telecom operators.
Telecom companies worldwide are particularly concerned about the potential loss of roaming revenue, which has traditionally been a high-margin service. The holiday season’s bump in foreign travel has intensified this competition, with telecom operators enhancing their international roaming services specifically to counter the threat from affordable eSIM providers.
As telcos scramble to defend their roaming revenues against a surge of agile eSIM startups, Vodafone’s launch of its Travel eSIM platform signals a bold pivot—embracing digital-first, cross-network connectivity to stay relevant in the new travel tech era.
Several trends are shaping the future of this competitive landscape:
1. Increasing eSIM Adoption: As more devices ship with eSIM capability as standard, the barrier to adoption is lowering. Apple’s iPhone 14 series in the US market has already eliminated physical SIM slots entirely, signaling a shift toward eSIM-only devices.
2. Competitive Response from Traditional Carriers: Traditional telecom operators are responding to eSIM competition by improving their own roaming offerings or launching their own eSIM services. This competition benefits consumers through improved services and potentially lower prices.
3. Integration of Voice and SMS: Some eSIM providers are beginning to offer voice and SMS capabilities alongside data, addressing one of the few remaining advantages of traditional roaming.
4. Regulatory Changes: Regulatory bodies in various regions are implementing measures to reduce roaming charges and increase transparency, potentially narrowing the price gap between traditional roaming and eSIM alternatives.
Conclusion about eSIM vs roaming
The surge in international travel to pre-pandemic levels and beyond has created a dynamic, competitive landscape in the telecommunications industry, particularly in the realm of international roaming services. Telecom companies across Europe, North America, Asia, and the Middle East are actively bolstering their roaming offerings to counter the growing threat from low-cost eSIM providers, which offer data-only plans at significantly lower rates. eSIM vs roaming
While traditional telecom operators maintain advantages in terms of comprehensive service offerings (voice, SMS, and data) and seamless integration with users’ home mobile services, eSIM providers have disrupted the market with substantially lower prices, greater flexibility, and improved user control. The price differential, with eSIMs often 50-80% cheaper than traditional roaming, represents a significant challenge to telecom operators’ high-margin roaming revenue streams.
As eSIM technology becomes more widespread and device compatibility increases, this competitive pressure is likely to intensify. Global telecom companies’ strategic responses, including enhanced roaming packages, competitive pricing structures, improved user experiences, and their own eSIM integration, reflect the seriousness with which they view this challenge.
For consumers, particularly international travelers, this competition brings benefits in the form of more options, better services, and potentially lower prices. The evolution of this market will continue to be shaped by technological advancements, changing consumer preferences, and regulatory developments in the coming years. eSIM vs roaming
