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IoT connectivity: The ugly duckling of IoT for network operators

Given my telco background, it was logical that back in 2014 I published some of my first articles in my IoT blog around the topic IoT connectivity. I described how the optimist predictions of analysts and companies like Cisco and Ericsson made machine-to-machine (M2M) an attractive market to invest in.

The recent news of Tata Communications acquiring mobility and IoT specialist Teleena is a clear indication of the phenomenal growth in the global IoT connectivity market. “By 2021, enterprises’ spending on mobility alone is set to surpass $1.7 trillion,” said Anthony Bartolo, chief product officer at Tata Communications. I hope to see Tata Communications/Teleena in the next Gartner Magic Quadrant for M2M managed services worldwide.

There are still people who doubt that connectivity is a key component in the M2M/IoT value chain. Please remember that without connectivity there is no IoT.

Obviously during these years, many of my projects were associated with IoT connectivity — from the analysis of M2M and IoT service providers to the conceptual design of end-to-end solutions where connectivity selection was a key component. One of the most interesting projects was the analysis I made for the Telefonica project, IoT in a box. And I can’t forget projects comparing LPWAN technologies, end-to-end security and the identification of uses cases for 5G. Sometimes I also had to sell IoT connectivity.

In the last few years in the IoT connectivity market I have seen:

  • The consolidation of the market — like Kore buying Wyless, or Sierra Wireless acquiring Numerex;
  • The appearance of companies like 1NCE, the first dedicated Tier 1 Narrowband IoT MVNO providing fast, secure and reliable network connectivity for low-data B2B applications offering a set of optimized product features, such as an IoT flat rate and the first of its kind “buy once” lifetime fee;
  • The still not bloody battle between LPWAN operators (SigFox, LoRA network operators, NB-IoT, LTE-M);
  • Telco vendors, operators and analysts talking about the promise of 5G;
  • New Wi-Fi and Li-Fi IoT use cases;
  • IoT security breaches;
  • Operators focusing on key industries and use cases;
  • The partnership of M2M and IoT service providers evolve;
  • Agreements among M2M, MNO and satellite operators;
  • The lack of standards in the smart home connectivity;
  • The expectation to solve real-time connectivity challenges in Industry 4.0 and edge computing; and
  • Time-sensitive networking Industry 4.0 use cases and test beds by IIC members.

But in my opinion, enterprises still are confused and delaying their decisions to adopt IoT because they need advice about the right IoT connectivity — not just the cheapest prices, but easy integration or better customer support.

IoT connectivity: The ugly duckling of IoT network operators

Telecom operators’ more focused approach to bolstering their IoT businesses appears rooted in refining the technology inherent in their connectivity networks. And no wonder, the powerful GSMA has been helping mobile operators define their role in IoT. At first sight, the best way for large telecom operators to generate value from IoT might appear to be by providing connectivity via their networks. Additionally, they could use their vast experience in customer engagement, customer premise equipment support, and their robust, proven back-office systems by offering their operation support system and business support system platforms externally to IoT users, using their OSS to provide users with a turnkey platform to manage their equipment proactively in real time, and their BSS to support the related billing requirements. In fact, global telcos are setting their sights on IoT for growth in 2018.

Nevertheless, Analysys Mason highlighted that “telcos have been working with the broader ecosystem, including developers, cloud players and hardware vendors this past year — all of which should set the market up for an active 2018.”

Although many people think that IoT connectivity is or will become a commodity with little value for customers and along with the hardware will form the ugly ducklings of the value chain, IoT network operators should strive to demonstrate that IoT connectivity is vital for the global adoption of IoT and seek to increase the income derived from its connectivity services with aspects like security and the contextual data value that their networks transport.

IoT data is the new oil also for IoT network operators

If connectivity seems doomed to play the role of ugly duckling, data, on the other hand, sees its value increase with each new technology.

How many times have we seen a presentation titled “Data is the new oil”? Even taught by me.

Many telcos are in the process of digital transformation. They want to compete with the Googles, Apples, Facebooks and Amazons of the world and avoid the same situation lived by these over-the-top vendors. IoT is giving them an opportunity to monetize IoT data and convert their networks in pipelines of value.

IoT data is a new source of revenue that will also produce incremental profit through operational productivity and efficiency.

The new stream of data coming from the physical world and the billions connected things are mostly transported by IoT network operators’ networks, and once this data is captured, IoT network operators can monitor everything and feed their AI systems. It is then when IoT network operators can make a lot of money out of IoT contextual and aggregated data.

Can you imagine the opportunities created by the connection of millions of devices and intelligent things over your IoT network? A vast amount of useful data generated by smart containers, smart home appliances, smart cities, connected cars, smart healthcare devices and wearables — which for many businesses is an extremely valuable commercial tool. IoT network operators possess the ability to perform real-time data analytics on readily available data to determine product performance, improve customer experience and forecast network capacity, all of which IoT-ready businesses could benefit from.

Key takeaways

IoT connectivity is still at the core of all IoT network operators and M2M service providers. But some of them are implementing different strategies to capture more business from the IoT value chain. The idea of IoT connectivity will become a commodity, with added value influencing the decision to invest in new IoT-enabled networks (5G, LTE-M, NB-IoT).

It’s clear that there are some strong opportunities for IoT network operators and M2M service providers looking to capture the full potential of IoT, and it’s time that they open up their services to support companies from all sectors that are looking to employ not only IoT connectivity, but also machine data intelligence as part of their business models in this IoT-driven digital transformation.

Telcos offering IoT connectivity should look to monetize data and offer businesses unique insights that could potentially open doors to new revenue streams or even improve operational efficiencies.

If IoT business is about data and assets, telcos need to shift from technology and connectivity to business value and creation of valued services.

Thanks in advance for your likes and your shares.

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.

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