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What the T-Mobile-Sprint merger means for IoT

It’s no secret that T-Mobile and Sprint are talking merger. However, other wireless carriers — and even some nontraditional competitors — have focused their attention on developing advanced solutions for the internet of things instead. So, how will this merger affect enterprise mobility and IoT connectivity?

A billion-dollar business

Both Verizon and AT&T expect $1 billion dollars in IoT-related revenue for the first time in 2018, but T-Mobile and Sprint — separate or combined — are predicted to fall far short of that figure. Even with a fully integrated IoT environment, this newly merged entity isn’t ready to take on its more-established competition.

A major U.S. carrier can rake in upwards of nine figures in revenue every year, however, so a billion-dollar disadvantage isn’t exactly impossible to overcome. What this lag will do, though, is severely impact some of T-Mobile’s and Sprint’s corporate strategies — especially those dependent on IoT revenue to offset declines in aging endpoint devices and legacy systems.

To competitively scale IoT support capabilities moving forward, these less-experienced carriers will need to prioritize new infrastructure investments. Sprint, for example, manages millions of IoT endpoint connections, but employs less than 50 full-time specialists to oversee the entire division. And while T-Mobile is the only wireless carrier other than Verizon committed to Narrowband IoT, its current IoT operation is even smaller than the one Sprint manages.

Connectivity isn’t king

In addition to a lack of resources, T-Mobile, Sprint and smaller-scale service providers are challenged by this technology’s seemingly counterintuitive business model. Compared to other mobile technologies, connectivity is not the primary revenue generator. In fact, most major organizations have seen their average per-user and per-connection IoT earnings decline since creating a connectivity offering.

Instead, deeply integrated services that add value to specific customer IoT implementations have been the most profitable mobile network operator ventures thus far. Since T-Mobile largely lacks enterprise IoT experience, expect to see this newly formed organization use a combination of Sprint’s existing capabilities and acquired technologies/partners to lead its IoT innovation charge.

If this new wireless carrier is feeling particularly bold, it could even take this rare opportunity to explore new, potentially lucrative markets. While in-depth analytics and management services are certainly in demand, creating an IoT security technology or manufacturing endpoint device hardware are just a few examples that could turn a profit and disrupt the entire global IoT industry.

Turning up the heat

As IoT endpoint devices become ubiquitous at the enterprise level, wireless carriers like T-Mobile and Sprint may not be the industry’s only competition for much longer. Using LoRaWAN technologies, cable operators can transform their active infrastructure into an enterprise-grade IoT services platform, reducing prices and increasing incentive to drive further IoT innovation.

Unlike other countries, however, U.S. providers have considerably less to worry about where standalone IoT services are concerned. Even if T-Mobile and Sprint lack the specialized expertise of these niche organizations, long-established infrastructure and massive customer bases responsible for managing more than IoT technologies are simply too much to overcome in the short term.

IoT in the future

If early expectations are to be believed, the T-Mobile-Sprint merger will create an accelerated nationwide 5G network build-out that creates several advantages for enterprise mobility and IoT efforts. On top of revolutionary data transmission speeds and capacities, experts predict 5G’s ultra-low network latency brings with it the potential to create the world’s most efficient IoT applications and use cases.

In fact, a nationwide 5G network could be responsible for as many as three million new American jobs — not to mention $500 billion in economic growth — over the next several years. As wireless carriers take the necessary steps to make 5G a reality, it will be interesting to see how IoT evolves and changes to accommodate these next-generation mobile technology networks.

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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