Almost a year later but I thought it good to leave my feedback here incase it helps someone in the future.
It's a long winded story but read it if you have reached a dead end like me.
*** YES - You can have your primary number on MTN as a eSim and also have your watch Esim work as well. So essentially you have two eSim's.
Here is some key points of what happened and what eventually worked for me.
1. Simswop from physical SIM to eSim always failed when the stores tried it until someone figured out that we need to remove the watch eSim from my profile first.
This is the Apple watch eSim Service @ R25pm.
(My eSim Service/Mobile data worked on my watch for more than a year without issues).
I could not do this myself and someone from the customer support department managed to remove this from the system. This took about 5 weeks to figure out and once they did this I received a SMS to say something about my order has been processed. The mobile data service on the watch stopped working immediately and when navigating to the Mobile Data option in the Watch app it listed MTN as my current plan with the word "Expired" underneath.
2. Once the above is sorted the store will be able to perform a normal simswop to eSim. You will receive a email with the QR code for activation on the iPhone. Note that I didn't receive the email initially and had to ask the consultant to resend the code.
3. MTN eSim worked and physical FNB connect SIM worked. All dual SIM functionality was available as expected although the watch was now without a eSim.
4. Reactivating the watch eSim was now a drama on its own. It confirmed that the service was deleted from my account as I left everything alone for about 2 months and could see I was no longer being billed the R25pm.
On the Watch itself it showed no SIM present but the MTN expired menu was always present on the Watch app. (See my screenshot).
5. No matter how many times I tried to remove and add the service back from the Watch app again it never worked.
This is the official way to activate the eSim for the Watch and as long as you have the correct contract the service will be added to your account. You don't technically even have to do this at a store.
If you follow the official MTN instructions it mentions that you have to Activate the service when logging into the MTN portal (via the Mobile data menu on watch app- see screenshots).
Although I could login to the MTN portal and remove and add the service I was never presented with the option to "Activate" the service.
6. Went to several stores randomly to try my luck in finding a consultant that has experience with eSim's but amazingly I either always missed this person or mostly I was met with short "It can't be done" answers.
7. But I never gave up
8. After yet another store visit on a quiet Sunday morning I was finally ready to abandon the Watch eSim as per usual nobody could help or the technical person wasn't available. I even sat next to the consultant and navigated through every service option on their terrible portal and could find nothing to Activate....
....The conclusion was once again that you won't be able to have 2 eSims on your profile.
9. While sitting at the store and wasting time I googled for some more generic watch and mobile data issues and concluded that I could just try and factory default the Watch.. I had nothing to loose at this stage.
10. I wiped and setup the watch from scratch and opted not to restored from backup. Once the Watch was paired I went straight to the Mobile Data menu in the Watch app where I was greeted with the same "MTN" expired message. I removed and added the service once again but still got the same results. I gave up and drove back home.
11. Once I got home which was about 30min later i continued to setup the Watch as I've technicallly lost all it's customizations now. The Watch automatically connected to WiFi as it should.
I checked the mobile data option one last time and noticed that the "MTN Expired" message was gone.... I selected the Manage account option again and to my surprise I was presented with a new webpage explaining the R25pm service charge and given the option to Activate the service.
I selected Active and Lo and behold I immediately recieved two SMS's to confirmed the eSim has been activated.
***Y'ello! MTN's added eSIM Number Service ES2,eSIM Connection Fee ES2,eSIM ES2,eSIM Parent ES2 to your account. Your new monthly payment is R173. Enjoy!
***Y’ello! Your Dual profile has been successfully activated on your eSim Smartwatch. T&C apply
Conclusion:
*Don't listen to the stores... It can be done!
*The Watch eSim seems to be something foreign to most consultants and the only true part of all their stories was that they don't have to activate it from the store.
* iPhone eSim first then watch eSim.
*Make sure you have a normal "open" contract that can be billed. In my case it was the most entry level "MTN Mega Flex R65"
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