Breaking the Chains of Vendor Lock-In: Inside Onomondo and the SGP.32 eSIM Revolution for Cellular IoT

The global cellular Internet of Things (IoT) landscape is undergoing a structural transformation, driven by the rollout of the SGP.32 eSIM standard and the recent launch of proprietary remote management tools designed to liberate enterprise fleets from legacy telecom constraints. To understand the gravity of this shift, IoT Business News sat down with Michael Karlsen, co-founder of Onomondo and a veteran entrepreneur who previously served as the Chief Financial Officer of gaming studio Playdead before co-founding Onomondo alongside Henrik Aagaard in 2018.

Karlsen, who served as CEO until early 2025 and currently spearheads the company’s long-term strategy and strategic partnerships, shared critical insights into why SGP.32 represents a fundamental tipping point. For over a decade, the cellular IoT ecosystem has been hampered by commercial models rooted in traditional telecommunications culture—models that historically prioritize customer lock-in and long-term single-vendor retention over true interoperability and operational flexibility. As enterprises look to deploy millions of connected devices globally, the necessity for vendor-agnostic architecture has shifted from an operational luxury to a core business imperative.

Main Facts and the Shift Toward Interoperability

At its core, the introduction of the SGP.32 technical specification—and Onomondo’s subsequent rollout of its dedicated SGP.32 eSIM IoT Remote Manager—addresses a long-standing structural flaw in cellular IoT: the inability to dynamically switch connectivity providers post-deployment without physical SIM card replacements or cumbersome field interventions.

Historically, enterprise fleet managers were forced to select a single mobile network operator (MNO) or mobile virtual network operator (MVNO) during the initial design phase of a hardware product. Once deployed, these devices were practically tethered to that original provider for their entire operational lifespan, which often spanned anywhere from five to ten years. This pre-SGP.32 paradigm created immense risk. If a provider altered its pricing structure, suffered network degradation, or failed to secure coverage in expanding target markets, the enterprise customer had virtually no recourse.

Karlsen argues that while the IoT sector has achieved significant technological maturity in hardware, cloud analytics, and artificial intelligence, the connectivity layer has lagged behind in terms of genuine flexibility. SGP.32 changes this dynamic by establishing an interoperable architecture and an eSIM Internet of Things Remote Manager (eIM) that empowers businesses to provision, manage, and migrate device profiles over-the-air across disparate networks. This capability effectively functions as an operational insurance policy, mitigating market volatility and geopolitical shifts that could otherwise jeopardize long-term digital transformation initiatives.

Chronology of Cellular IoT and the Rise of eSIM Architecture

To fully grasp the magnitude of the SGP.32 standard, it is helpful to examine the historical trajectory of subscriber identity module (SIM) technology within the machine-to-machine (M2M) and IoT domains.

• Early 2010s (The Pluggable SIM Era): Enterprise deployments relied almost exclusively on removable, physical plastic SIM cards (Form factors 2FF, 3FF, and 4FF). Scaling global fleets required physical logistics management, manual inventory tracking, and localized network agreements.
• Mid-to-Late 2010s (The M2M Era and SGP.02): The GSM Association (GSMA) introduced the SGP.02 specification, aimed primarily at automotive and industrial M2M applications. While embedded SIMs (eSIMs) eliminated the need for physical card swaps, the architecture was heavily centralized, complex, and tailored primarily toward high-arpu consumer electronics or deeply embedded industrial machinery, leaving standard IoT fleet managers with rigid provisioning constraints.
• 2018 (Onomondo’s Foundation): Recognizing the friction in global IoT connectivity, Michael Karlsen and Henrik Aagaard founded Onomondo to rethink how devices interface with cellular networks, eventually scaling the platform across more than 180 countries through integrations with over 600 mobile operators.
• 2024–2026 (The SGP.32 Paradigm Shift): The GSMA finalized and advanced the SGP.32 standard, specifically engineered to address the lightweight, low-power, and headless nature of IoT devices. Unlike its predecessors, SGP.32 empowers enterprise IoT managers directly, decoupling connectivity management from strict consumer-style remote SIM provisioning (RSP) frameworks. Onomondo’s 2026 launch of its native SGP.32 eSIM IoT Remote Manager marks a commercial milestone in operationalizing this standard for widespread enterprise use.

Supporting Data and Demographic Beneficiaries of SGP.32

Not all IoT deployments require the dynamic flexibility offered by SGP.32. According to industry analyses and Karlsen’s market observations, enterprises deploying short-lifecycle devices or localized single-market networks may find that implementing eSIM remote management introduces unnecessary technical overhead. However, for specific high-value segments, the quantitative and qualitative benefits are transformative.

1. Global Deployments with Permanent Roaming Restrictions: Countries such as Brazil, Turkey, China, and Saudi Arabia enforce stringent regulations regarding permanent roaming. Traditionally, enterprises deploying devices in these regions were forced to design multiple stock-keeping units (SKUs), negotiate localized roaming or local carrier agreements separately, and manage fragmented billing and usage monitoring systems. SGP.32 allows manufacturers to produce a single hardware SKU with a single software design that can be seamlessly provisioned with local profile credentials over-the-air upon arrival in restricted jurisdictions.
2. Long-Lifespan Infrastructure Deployments: Smart utility meters, smart grid architecture, long-term environmental sensors, industrial asset trackers, and municipal parking sensors frequently remain in the field for seven to ten years. Statistically, the longer an asset remains operational, the higher the probability that the initial connectivity provider’s commercial terms or network coverage will misalign with enterprise needs. SGP.32 eliminates this long-term forecasting risk.

Industry Reactions and Competitive Pressures on Traditional MNOs

The commercial implications of SGP.32 extend far beyond technical convenience; they pose a direct challenge to the traditional business models of legacy global network operators. For decades, the telecommunications sector relied on high switching costs as a primary customer retention mechanism. Contractual lock-ins reduced the incentive for operators to continuously optimize pricing, customer service, or value-added feature sets.

Karlsen asserts that this friction-heavy status quo ultimately damages the broader IoT ecosystem by discouraging bolder corporate investments. By introducing a frictionless mechanism for vendor migration, SGP.32 forces traditional connectivity providers to compete actively on service quality, security, and transparent pricing rather than relying on legal and technical barriers to entry.

Analysts suggest that forward-thinking operators are already adapting to this reality by pivoting toward value-added services—such as advanced device security, integrated cloud analytics, and seamless multi-network orchestration—rather than attempting to monetize raw data transport alone. Companies that fail to modernize risk losing market share to agile, software-defined connectivity platforms that embrace the new interoperability standards.

Broader Impact and Future Implications (2029 and Beyond)

Looking three to five years ahead, industry experts anticipate that the widespread adoption of SGP.32 will fundamentally alter the economics of digital transformation. As physical artificial intelligence (AI), edge computing, and hyper-power-efficient IoT use cases proliferate, the underlying act of moving data from a remote sensor to a cloud repository is expected to become an unbundled, low-friction utility.

This commoditization of basic connectivity will shift the competitive battleground toward innovation in adjacent services. Enterprises equipped with the structural flexibility to switch providers dynamically will be positioned to leverage emerging technologies—such as quantum-resistant security protocols and advanced SIM-based edge compute functions—without being held back by legacy infrastructure constraints.

Ultimately, the maturation of cellular IoT through standards like SGP.32 signals a transition from proprietary ecosystem enclosure to an open, interoperable market framework. For enterprises navigating complex global supply chains and long-term digital deployments, this shift offers a vital tool: the absolute freedom to choose, adapt, and scale without compromise.