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You’ve all read the statistics – there will be nearly 21 billion devices in the Internet of Things (IoT) by 2020 according to Gartner. Regardless of the exact numbers it’s going to mean that mobile network operators (MNOs) are going to experience a real and sustained increase in the number of devices communicating across their mobile networks.
Not all IoT devices are equal
The behaviour of different IoT endpoints will place a range of different demands on the network as well as data centres that process and host this information. Smart meters for example provide their latest values at intervals to a centralised repository and connect to the network fairly infrequently.
A connected vehicle, however, may be streaming media, mapping information and exchanging diagnostics and location information to a central hub requiring much more mobile data. For IoT tariffs, customisation will be needed in order to gain market share (as opposed to more traditional mass tariffs). Such tariffs will need to be flexible enough to meet the network needs of particular use cases whilst being standardised, simple and structured enough for customers to adopt them.
As suggested above, different IoT applications will require different network capabilities. Whilst the current focus is 5G rollout there will be plenty of use cases that can leverage LTE-M, Narrowband IoT (NB-IoT), 4G, 3G, or even 2G. 5G will be able to integrate all of these network technologies into different network slices. Specifically designed network slices will provide ideal connectivity for different use cases but will need tariffs and pricing flexibility to reflect customer needs.
Leveraging the gateway into IoT
Leveraging IoT data, telecommunications organisations can better manage and respond to changing network usage patterns. This might include avoiding network outages during data surges (at music and sports events for example). IoT will also allow for better planning of network maintenance, helping to minimise service disruption.
A rapid increase in network data consumption and responsiveness isn’t the only benefit for mobile network operators in IT. In fact, they have an opportunity to position themselves as access and service providers of IoT by offering a range of service propositions that wrap around the network access itself.
It’s worth remembering that all of the commercial use cases of IoT will need solutions that enable them to manage and derive value from their own networks of connected devices. Clearly some market sectors for IoT are becoming crowded – smart cities, smart homes, electric vehicles are no exception, but telecoms organisations can leverage (and monetise) their deep experience of delivering device connectivity at scale alongside the life cycles of millions of connected (mobile) devices. They are also mature in understanding how to engage customers and work with them to deliver a compelling value proposition.
Becoming the platform provider for IoT
It’s hard to say whether telecoms network operators will be able to position themselves as platform providers for IoT. Most of the world’s largest service providers already offer their own connectivity platforms for IoT. Telefónica and Vodafone in Europe, and AT&T, Verizon, Sprint and T-Mobile in the USA. There are also clearly other organisations such as Qualcomm Technologies already bringing solutions to market in partnership with telecoms providers (such as its LTE IoT chipset).
IoT platforms help service providers to create an install base of IoT devices that rely on their network infrastructure. Devices built with AT&T’s ‘IoT Starter Kit’ are designed to make AT&T the default network carrier once deployed. Platform providers can also charge usage-based fees for access to their APIs alongside providing individual services around their platforms, such as IoT enablement, device connectivity and IoT consultancy.
Delivering IoT for industry sectors
With IoT comes a range of cloud services that customers might require. This might include cloud data storage, security, business process optimisation and data analytics. Telefónica’s Smart Business Control service provides not only IoT and big data storage but also application integration and real-time analytics. The truth, however, is that most service providers have yet to acquire comprehensive cloud capabilities, so are at risk of ruling themselves out of these supporting revenue streams.
There are clear market opportunities for service providers supporting connectivity solutions for key industry verticals. Autonomous vehicles are a good example where navigation, entertainment streaming, vehicle location monitoring, autonomous location sensitive operation, and so on, rely on mobile data connectivity. Vehicles will ultimately need a consistent data connection that can only be truly served with ultra-low latencies provided by 5G. Given information sources may include GPS units, vehicle sensors, devices, smart phones and wearables, vehicle telematics, entertainment and information sources, the opportunity is a broad one.
The dynamic nature of the connected car market is leading to industry players repositioning themselves through acquisitions and partnerships. The range of solutions for connected cars includes car manufacturers, automotive hardware providers, component and chip manufacturers, content providers, insurance providers and of course telecoms network operators. Telecoms organisations such as AT&T, Telefonica, Verizon and Vodafone have partnered with car manufacturers to provide embedded mobile data connection into cars, with AT&T and Verizon particularly focusing on a modular platform, enabling additional services such as data analytics, billing, insurance services, infotainment and content.
In the UK, Vodafone has partnered with several OEMs including Audi, Honda, Nissan, Toyota, Volkswagen to provide embedded SIM solutions, telematics, vehicle relationship management, fleet management and remote diagnostics and maintenance. This is just one example of an industry sector where telecoms providers can provide a whole range of complementary services around the IoT mobile data connection.
Moving at pace
The pace of change for IoT shows no sign of slowing down. Telecoms service providers need to be flexible to new opportunities and aware of the value, knowledge and connectivity experience they bring. Revenue streams for IoT will pull on a complex network of device manufacturers, equipment manufacturers, content providers, applications developers, systems integrators and end customers themselves who may need help to make IoT at scale a success.
Operators will also need to think digitally in how their business, propositions and tariffs are structured alongside adopting an accelerated route to market for new innovation. Most of all, such innovation needs to take place at speed, with the right emphasis placed on the right strategic opportunities.
Get in touch with us to help evolve your thinking on IoT, whether you are an end customer, telecoms network operator, equipment manufacturer or play a different valuable role in the IoT ecosystem.
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