The expansion of the Internet of Things (IoT) is a huge growth opportunity for vertical industries and mobile network operators (MNOs), but there are challenges and risks. The recent hacking of a Jeep while it was driving on a public road illustrates the risks to all IoT devices and segments. On the network side, millions of autonomous machines trying to access the mobile network at the same time can cause catastrophic network outages. Meanwhile, for developers the lack of a standard embedded connectivity architecture creates valueless costs and complexity.
The IoT ecosystem is about as complex as an industry can get. There are so many companies in the industry, and to complicate matters, there is a lot of noise and hype coming from all sides. The world’s mobile network operators are rapidly seeking to add value and take a leadership positon in the IoT value chain. In pursuing this, they are assembling ecosystems and sourcing proprietary-enabling technology and tools across the solution building blocks from platforms and services, to embedded hardware and software.
Unleashing the power of the subscriber identity module
Most MNOs simply do not recognize that they already own the key to successful IoT deployments on their own, without the need to partner with so many different companies in the ecosystem. That key is the subscriber identity module (SIM) — the small integrated circuit chip that every MNO embeds in each of its devices. The SIM contains the international mobile subscriber identity (IMSI) number and its key, which are used to identify and authenticate the user of that device on the MNO’s network — or the network of any roaming partner.
Currently, most MNOs view the SIM as a necessary but low-value component of their customer offering in order to deliver a valid subscription, manage roaming and other basic mobile network functions. As such, MNOs have been focused on driving down the cost of the SIM in an effort to minimize the total bill of materials cost for a device. MNOs need to realize that by unleashing the power of a standard SIM, they can provide the industry and enterprises with services that address the needs of successful IoT projects, with no changes in the deployment of their existing standard network elements required. The MNO is then positioned higher in the IoT value chain, while easing the deployment of IoT services for all types of vertical IoT applications on the mobile network.
Making the SIM the “master” and not the “slave” in the IoT architecture
The SIM is a secure processor requiring network authentication for app access, providing increased security. MNOs can also define and embed on the SIM the network access solution (NAS) for the device, ensuring service assurance, and eliminating risks to their networks. Embedded in the device as an extension of the mobile network, SIMs conform to a global standard.
SIMs are fully programmable computer systems. With the right software, any SIM can become the “master” and not the “slave” in the IoT architecture. The MNO does not need to purchase certain brands of SIMs or make any other changes to the SIM or to their network — they just need software that is capable of embedding and executing an IoT application directly on the SIM.
Embedded apps on SIMs are updated via a secure, globally standard over-the-air (OTA) method. The utilization of standard mobile network elements to address IoT challenges experienced by enterprise adopters — and to additionally create new business models such as IoT app stores — positions the MNO as a high value IoT services provider.
Tying value-added features and services to the MNO profile on an eUICC (MFF2)
In the rapidly evolving area of embedded SIMs (eUICC / MFF2), OEMs are sourcing the SIMs directly from the SIM manufacturer for embedding in the machine at time of manufacture. These SIMs are deployed with a “boot-strap” subscription that may be changed over the air to a new MNO once a machine or device arrives in the country of deployment. In this scenario, it is difficult for the MNO to compete on any aspects other than price and coverage in the geographic area. Software can be embedded in a specific MNO’s profile working in conjunction with their network elements, tying all the following described high value features provided to that MNO, establishing a competitive advantage and lessening the likelihood of the subscription being swapped to a different MNO’s profile.
App security, delivering and updating
SIMs have multiple layers of encryption keys that work in conjunction with the authentication center in the mobile network. Individual encryption keys on each SIM for network authentication and the individual application interacting with the OTA server are required in order to install or modify any application embedded on a SIM.
This makes apps embedded on SIMs very secure and virtually unhackable.
Because security is now a critical factor in IoT enterprise applications, MNOs will be able to charge a premium for this service, quickly recovering any costs related to any software required to increase the SIM’s capabilities. In addition to the premium service charge, the MNO can charge a monthly fee for each device on the platform and a transaction fee for each OTA update that occurs. This secure OTA update will save the enterprise the cost of dispatching a technician to each device for individual updating. The MNO will be able to achieve superior margins by charging for this service based and cost and time savings for the enterprise.
New business models: Creating a standards-based MNO IoT app store
The combination of a standardized embedded architecture, secure applications space and globally secure OTA method creates the opportunity for an MNO-controlled IoT app store business model. All that is required is for the device makers to publish the hardware specifications with I/O addresses so that multiple parties can develop apps and services for the device. The end user can choose the embedded app and service provider and securely download the chosen app to the devices embedded SIM via OTA.
The IoT app store model creates new revenue streams for the MNO. Potential revenue elements include:
- A monthly platform maintenance fee for each device
- A monthly fee for maintaining an app in the App Store
- A revenue split for any app sales from the App Store
- OTA fees for each installation or update of an application
Mobile network connectivity service assurance
As stated by the GSMA in its recently released non-binding permanent reference document regarding IoT Device Connection Efficiency Guidelines: “the predicted large scale growth of Internet of Things (IoT) devices and their associated IoT device applications, will create major challenges for MNOs. One major challenge that MNOs must overcome is the risk caused by mass deployment of inefficient, insecure or defective IoT devices on the MNOs networks. When deployed on a mass scale such devices can cause network signaling traffic to increase exponentially which impacts network services for all users of the mobile network. In the worst cases, the mass deployment of such IoT devices can disable a mobile network completely.”
An easy to understand scenario is an earthquake in a city such as San Francisco where hundreds of thousands of connected machines with motion detectors or accelerometers are deployed. The application in each of those machines will detect the motion and attempt to use the network at the same time to report the event. Due to congestion, the vast majority of the machines will not successfully connect to the network and they will all try again, at the same time, perpetuating the scenario and potentially bringing the network down.
The network access solution component enables the MNO to provide the application network access software with an API for the developer to integrate the application to on the SIM. In this way, the MNO now has some control over how autonomous machines interact with their network. A key element of the NAS is a connectivity back-off timer algorithm that escalates over time.
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.