The travel eSIM market looks bigger than ever on the surface. More brands, more plans, more destinations, more ads chasing travellers at the exact moment they switch airplane mode off. But behind that growth story, something far less glamorous is happening.

Profit margins are quietly collapsing.

According to recent analysis from Juniper Research, average margins on travel eSIM data packages have fallen by more than 10 percent over the past two years. That drop has happened even though wholesale data prices have barely moved. In other words, costs are flat, but revenues are shrinking.

For many providers, that gap is becoming uncomfortable.

What was once a high-margin, fast-scaling digital product is starting to look like a race to the bottom, especially for brands whose entire value proposition still revolves around selling gigabytes.

Competition did not just increase; it multiplied

The core reason is not complicated. Competition has exploded.

The travel eSIM market used to be dominated by a relatively small group of specialised players who understood telecom, negotiated data deals directly, and invested heavily in distribution and education. Today, that barrier to entry is largely gone.

As Molly Gatford, Senior Research Analyst at Juniper Research, explains, the rise of travel eSIM enablers has completely reshaped the landscape.

These enablers make it possible for almost any brand to launch an eSIM product without being a telecom company. Airlines, travel apps, fintechs, insurance providers, and even content platforms can now add “mobile data” to their offerings with minimal technical effort.

The result is predictable. More brands enter the market, price becomes the main acquisition lever, and established players are forced to respond. Instead of defending margins, many providers have shifted into pure retention mode, lowering prices just to keep users from switching.

It is no longer about selling the best product. It is about selling something cheap enough that customers do not bother looking elsewhere.

Data has become a commodity

This is the uncomfortable truth the industry is now facing.

For most travellers, mobile data abroad has stopped being a premium product. It is a utility. They expect it to be cheap, instant, and reliable. If one provider charges €15 and another charges €10 for roughly the same coverage, the decision is rarely emotional.

This is why stagnant wholesale costs are not saving margins. When every competitor is selling access to the same underlying networks, differentiation disappears. Coverage maps look identical. Speed promises sound the same. Even user interfaces are starting to blur together.

Price becomes the loudest signal.

And once price dominates, margins suffer.

This is not unique to eSIMs. We have seen it before in roaming SIM cards, international calling cards, hotel booking platforms, and even low-cost airlines. When the core product becomes interchangeable, the only sustainable way forward is to add value beyond the core.

Bundling is no longer optional

Juniper Research’s conclusion is blunt but realistic. Travel eSIM providers cannot rely on data revenue alone anymore.

To survive, and especially to grow, providers need to increase the perceived value of their packages. That means bundling services that solve real travel problems, not just offering more gigabytes.

Examples already exist across the market.

Some providers are experimenting with airport lounge access, local discounts, or ride-hailing credits. Others are bundling VPNs, travel insurance add-ons, or loyalty points that can be redeemed later. A few are leaning into long-term traveller needs by combining eSIMs with remote work tools, expense tracking, or multi-trip subscriptions.

The logic is simple. If data margins are thin, the package has to carry value elsewhere.

Bundling also changes the conversation. Instead of competing on price per gigabyte, providers compete on usefulness, convenience, and brand trust. That is a much healthier battlefield.

Niche players are quietly gaining ground

One of the more interesting takeaways from Juniper’s analysis is that smaller, niche providers may be better positioned than the giants.

Large players built their scale on volume. They thrive when customer acquisition costs are predictable and margins are wide enough to absorb heavy marketing spend. When margins shrink, that model becomes fragile.

Niche providers, on the other hand, often serve very specific audiences. Digital nomads, business travellers, cruise passengers, remote teams, or frequent regional travellers. By understanding those users deeply, they can bundle services that actually matter, rather than generic add-ons.

As Gatford notes, these niche players are already outperforming larger competitors in margin resilience. Not because they sell more data, but because they sell more value.

This is where the threat to market leaders becomes real. If a smaller provider can earn more per user with fewer customers, scale stops being the only advantage that matters.

What this means for the travel eSIM market

The travel eSIM market is not slowing down. Demand is still growing, and awareness is higher than ever. But the easy phase is over.

Selling data alone is no longer enough. Providers that fail to evolve risk becoming interchangeable utilities, fighting over cents while burning marketing budgets.

Those that succeed will likely look less like telecom companies and more like travel tech platforms. Connectivity will be the foundation, not the headline.

We are already seeing echoes of this shift in adjacent markets. Fintech apps bundle insurance. Airlines bundle experiences. Hotels bundle workspaces and memberships. Connectivity is simply joining the same evolution curve.

Conclusion

Where the market goes next

If the last two years were about expansion, the next two will be about positioning.

Travel eSIM providers now face a choice. Compete aggressively on price and accept shrinking margins, or step back and redesign the product around broader travel value. History suggests only one of those paths is sustainable.

Similar transitions have played out in online travel agencies, low-cost airlines, and even streaming platforms. The winners were not the cheapest, but the ones that built ecosystems users wanted to stay in.

Reliable industry research from firms like Juniper Research, GSMA Intelligence, and Analysys Mason all point in the same direction. Connectivity alone does not create loyalty. Experience does.

For travellers, this shift is positive. Better bundles, clearer value, and fewer meaningless gigabyte comparisons. For providers, it is a necessary correction.

The travel eSIM market is growing up. Those who adapt will shape its next phase. Those who do not may still sell data, but at a price that is increasingly hard to justify.