'eSIM' is on the way to replace sim cards. The biggest challenge of 'downloading a sim card' to a secure enclave on a phone is of course security.
The GSMA and members (i.e. telcos) have been working on secure remote provisioning. I think it'll take a while for the technology to make it in to consumer devices, though it's likely to be used in IoT relatively soon.
It takes a long time to spec these things up collaboratively and then even longer for telco's to act on it!
They are selling local data-plans abroad without switching the SIM card by implementing RSP.
Calls are coming in 2017, also promising a portable phone number later that year.
another interesting company in this space is FlexiroamX, they have a super flat sim that sticks on top of your existing sim. It lets you soft-switch the SIM using a "SIM Application" (like mentioned elsewhere in the thread) - appears as if it unplugs and replugs to the phone.
Works fantastically and gives me $30/GB data in pretty much any country at often 4G speeds - with a 12 month expiry on the data (does cost $20 a year or something for 'membership' but still, usually costs far more than that for a sim starter pack in every different separate country you go to). Good for frequent travellers!
Sure, they do remote provisioning, but it's not eSIM in that there is still a sim card! I assume they use some special USSD codes to switch to their provisioning carrier and use a normal network connection to do that.
In the case of a true eSIM, there is no sim card at all, it's stored on the device it's self with a lower level bootstraping profile (i.e. not an alternative pre-programmed carrier)
The GSMA and members (i.e. telcos) have been working on secure remote provisioning. I think it'll take a while for the technology to make it in to consumer devices, though it's likely to be used in IoT relatively soon.
It takes a long time to spec these things up collaboratively and then even longer for telco's to act on it!
See: http://www.gsma.com/rsp/2016/04/27/esim-opportunity-operator... and http://www.gsma.com/rsp/ (Warning: Lots of marketing BS)