I often find that some of eSIM providers are able to offer very cheap plans as compared to actual mobile companies which own the network. For example Nomad/Lyca provide very cheap plans which make them quite attractive options for eSIMs.
But it seems counterintuitive that they are able to offer cheap plan than actual network owner, so it makes me wonder if there is any catch? Are there any risks when we go for cheap eSIM plan providers?
It's mostly a marketing and price discrimination issue. In France for example, each of the main network operators have a discount brand offering much lower prices (Sosh for Orange, RED by SFR for SFR, and B&You for Bouygues Telecom). To avoid cannibalizing revenue from their premium brands, the discount brands initially used separate sales channels, fewer perks, and more limited customer service (mainly Internet, no physical shops) but even these differences seem to have faded over time.
You can also see a similar dynamic with roaming charges. Operators are able to offer reasonably cheap data packages but still charge outrageous rates if you don't buy a package in advance. Network operators are not setting their rates based strictly on costs and wholesale prices are much lower. In some cases, regulation also caps wholesale prices (e.g. international roaming in the EU).
The reason why all that is possible is that marginal costs for additional traffic is actually very low. Once you have invested a lot of capital into the network, any marginal income is beneficial and you might find it profitable to resell some capacity at a much cheaper price, at least if you can preserve the revenue from your existing customers (and reselling through third parties can be helpful there: outside the UK, Lyca is a niche brand, not really a threat to existing operators).
Note that none of this really is about eSIMs. On a technical level, Lyca Mobile is a MVNO (Mobile virtual network operator). MVNOs predate eSIMs and Lyca still offers prepaid plans with regular SIMs. Conversely, it's possible to get an eSIM for a traditional plan from a network operator. Sometimes it is even sold as a premium service with an extra charge (e.g. to put in a smartwatch or tablet).
As far as quality of service goes, there are nuances and different kinds of MVNOs but in general they use the same infrastructure and the technology is mature. I have used both travel data eSIMs abroad and a domestic full-service MVNO with a regular SIM and I have always found them good enough for my use (which doesn't include video streaming). It is however possible for the network operators to deprioritize traffic from these virtual networks and others have reported performance issues.
Another small performance hit comes from routing the data through the operator's home country. When roaming in another country, latency will be a bit higher compared to a local provider. That's true whether your provider is a legacy network operator in another country, a full-service MVNO, or a travel-oriented data-only MVNO but the latter don't always clearly advertise where they are based (which is why you might notice Google serving you some random local version you didn't expect).
Beyond that, the main differences will be found in additional services (e.g. streaming, games), how you can get customer support, and perhaps in the terms and conditions (e.g. how hard it is to actually unsubscribe) but even there I wouldn't say MVNOs are universally worse than network operators.
it seems counterintuitive that they are able to offer cheap plan than actual network owner
Your intuition is wrong. Building and maintaining a network has its own costs, which must be offset on the rates charged to customers in order to be covered. Those costs are not incurred by e-sim providers.
The risks that you might have with cheap providers, but not only with them, are:
The main risk with these travel-focused eSIM resellers like Nomad is that the connectivity you get with these travel-focused eSIM providers is extremely unpredictable, and I would not recommend having it as your sole source of connectivity. Getting a refund for the defective service is also difficult though possible if you have enough patience.
The reason the prices are so cheap is that they're buying bottom-of-the-barrel capacity and you should consider yourself lucky if you manage to get usable speeds consistently.
Furthermore, the data sessions can be terminated far away from your physical location, adding not only latency but giving you a foreign IP address. This may trip fraud detection or geo-blocking systems/etc if you're trying to access/pay for things locally.
I recommend you avoid wasting your time with these "travel" eSIM providers and pick up a prepaid/pay-as-you-go (e?)SIM from a local provider in your destination country. It will most likely be even cheaper, the speeds will be much better and actually usable, you will get a local IP address indistinguishable from a local, and as a bonus you get an actual local phone number which might come in handy if some service requires SMS verification/etc.
