& cplSiteName &

IoT Prospects for Wireless Operators: Good or Bad?

Danny Dicks
Heavy Lifting Analyst Notes
Danny Dicks
1/22/2016
50%
50%

The role of wireless operators in the Internet of Things (IoT) is at an interesting stage in its evolution.

On one hand, IoT markets -- such as the manufacturing and automotive industries -- are maturing and operators are considering how best to deploy third-party enabling platforms of the kind that they are traditionally pretty good at providing.

On the other hand, the operators' core IoT value proposition -- connectivity -- is under threat from new networks and communications protocols that seem well matched to the needs of IoT applications. In fact, one could see the public cellular networks' championing of the new NB-IoT standard, as well as the design criteria for future 5G networks, as being in part a response to the threat posed by the likes of Sigfox to the one part of the IoT value chain that wireless carriers thought was definitely theirs.

One issue facing operators is that many IoT applications are likely to be global in scope, and most operators' networks are not. In addition, operator networks have been designed to meet specific requirements in specific markets (and that doesn't necessarily mean that they will readily support IoT applications). Many of the most mature IoT markets (for instance, machine-to-machine industrial IoT) have established processes, protocols and providers -- it's not obvious what the route into those markets might be for operators.

These challenges are being addressed in multiple ways. Operators are doing one or more of the following:

  • Actively developing (or acquiring) vertical-specific IoT businesses and offering services to end users (generally enterprises in sectors such as automotive and logistics).

  • Partnering with one another to extend their global IoT connectivity service reach or with partners from different sectors to develop an IoT ecosystem.

  • Reselling global IoT enablement services (provided by third parties) that encompass connectivity and additional capabilities.

  • Deploying more capable service enablement platforms from third-party vendors in order to create and deliver broad IoT enablement services to enterprises and developers.

IoT platform vendors think the prospects for operators are good, though vendors that already sell connectivity management platforms to operators (some exclusively use this model) must ensure that their operator customers stick with them as service enablement capabilities are added to the basic connectivity management piece.

Operators will certainly further their IoT cause if they focus on putting in place platforms and tools that deal with the pressing issues around IoT generally, including scalability, generic and application-specific data analytics and reporting, and security. There are platforms available to them that will help -- they don't need to build their own solutions.

The latest Heavy Reading report report, "IoT Platforms: Chasing Value in a Maturing Market," examines the market for horizontal, multi-sector platforms to enable IoT applications. It considers the opportunities for telecom operators in this market; where value resides in the process of developing, supporting and delivering an IoT application; and how much of this value can be captured through the use of a horizontal platform. The report also assesses the offerings of ten leading vendors of IoT platforms.

— Danny Dicks, Contributing Analyst, Heavy Reading

(11)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
Founder62562
50%
50%
Founder62562,
User Rank: Light Beer
1/31/2016 | 5:15:52 PM
Re: 3 avenues of growth with radically different revenue prospects
To nasimson I've provided details in my ETSI speech (see link in my original post). To summarize, mobile operators are targeting low-power devices (which were previously not addressable by traditional mobile) via the GSMA's NB-IoT initiative and partnerships with proprietary network providers. Pricing expectations for low-power connectivity has been set by SigFox at about EUR1.2/year per device (+/-). The average mobile connected device contributes revenues of about EUR24/year, hence the 0.05x factor.
nasimson
50%
50%
nasimson,
User Rank: Light Sabre
1/31/2016 | 5:01:32 PM
Re: 3 avenues of growth with radically different revenue prospects
@Ken: > they can expand the base of addressable > devices (adding revenue at 0.05x the rate of > existing devices on average). How to increase the base of addressable devices? Why 0.05X?
DannyDicks
50%
50%
DannyDicks,
User Rank: Blogger
1/29/2016 | 9:03:34 AM
Re: 3 avenues of growth with radically different revenue prospects
Hi Ken - good to hear from you!

Thanks for adding the financial analysis to the options for carriers - a useful contribution to the debate.

Danny
DannyDicks
50%
50%
DannyDicks,
User Rank: Blogger
1/29/2016 | 9:01:16 AM
Re: There is more than what meets the eye
Hi CoFounde03033

Thanks for your comment - I largely agree with all your points :-)

Danny
CoFounde03033
50%
50%
CoFounde03033,
User Rank: Light Beer
1/27/2016 | 8:29:54 AM
There is more than what meets the eye
Thanks for an excellent article Danny.  I think your story is somewhat incomplete I believe.  Here's why.

1.  IoT is a stretch in terms of a service for a telecom operator.  You rightly pointed out that their sweet spot is 'connectivity', which too is under severe threat from NFCs and other emerging protocols.  Similarly, I believe wired telecom services such as MPLS/VPNs are significantly more critical in IoT than what most people tend to believe.  There is a huge embedded base of such wired connectivity in the enterprise space and most telecoms are ignoring it - granted for several reasons.  The simplest way I explain this is the following:  Telecoms job is to ensure packets are transported from point A to point Z in the fastest, cheapest, and most efficient way.  They deal with 'packets' and do not see or know/understand the contents of the packet.  On the other hand, IoT has to do with the content of the package.

2.  Once again your point re: acquisition of Hughes Telematics by Verizon is right on.  If telecoms want to be successful in IoT, they must acquire domain knowledge, which obviosly they do not have.  As a side note, anecdotal evidence suggests the Verizon-Hughes Telematics marriage isn't a very happy one.

3.  I believe integrating with Jaspers/PTCs of the world is more beneficial to those companies rather than their host telecoms companies - depending upon their agreements of course.  Without real revenue generating IoT solutions sitting on them, such platforms are suboptimal in value.  One of the short comings of connectivity platforms is that they only cater to wireless and ignore the wired communications.

Telecoms operators can be a huge benefit to the overall implementation of IoT, but there are several aspects that need to radically change for them to be effective and successful.  As a first step, telecoms need to revisit their value propositions, accept their limitations and reorganize better.
Founder62562
50%
50%
Founder62562,
User Rank: Light Beer
1/26/2016 | 2:20:56 PM
3 avenues of growth with radically different revenue prospects
In ther near term, mobile operators have 3 ways to grow. Firstly, they can move up the value chain (platforms and applications) which boosts revenues by up to 20x over connectivity.

Secondly, they can expand the base of addressable devices (adding revenue at 0.05x the rate of existing devices on average).

Or, thirdly, they can tackle inter-operability opportunites closer to the data and applicaiton interaction layers of the value chain (potential for a 1.4x revenue boost).

https://docbox.etsi.org/Workshop/2015/201512_M2MWORKSHOP/S02_RECENTIoTDEVandSTRATEGIES/MOREWITHMOBILE_figueredo.pdf

Longer term, operators will have to deal with the converegence between IoT and 'Digital' services (which implies the need for platforms to support multi-party business models). Consider examaples of consumer devices (Smartphones/tablets on Telco #1's network) interacting with connected, enterprise devices (on Telco #2's network).

Ken Figueredo
DannyDicks
100%
0%
DannyDicks,
User Rank: Blogger
1/25/2016 | 6:41:04 AM
Re: 4 way forwards
Sure. Here are examples in each category:

Acquiring / developing vertical specialist IoT businesses - Verizon acquired Hughes Telematics to develop an automotive telematics IoT business; Telefonica developed logistics IoT services with Masternaut

Partnering to extend capability - Swisscom, Deutsche Telekom, Orange, TeliaSonera, TIM, Bell Canada, SoftBank (collectively members of the Global M2M Association)

Reselling global IoT enablement services - Reliance Communications in India resells IoT enablement from global platform provider Jasper

Deploying more capable service enablement platforms - NTT DoCoMo deploying PTC's ThingWorx platform.

Danny

 
ContentD77453
50%
50%
ContentD77453,
User Rank: Light Beer
1/25/2016 | 5:07:15 AM
More Need For Research
Wireless carriers are very important and integral part of the IoT infrastructure. If they want to reap profits from Internet Of Things boom they need to address some security challenges first.
Executiv37157
50%
50%
Executiv37157,
User Rank: Light Beer
1/24/2016 | 9:00:35 PM
Good
Prospects are good so long as they invest in research, personnel and partnerships.

Jason Lebrecht
Joe Stanganelli
50%
50%
Joe Stanganelli,
User Rank: Light Sabre
1/24/2016 | 2:02:54 PM
5G $$$
I am of the understanding that companies view 5G as a far too expensive option.

Conversely, mesh holds a great deal of promise -- but can be difficult to deploy.
Page 1 / 2   >   >>
More Blogs from Heavy Lifting Analyst Notes
Around 1,000 delegates gathered in Munich this week to listen, discuss and clap at random at Deutsche Telekom's two-day cybersecurity event. But was there something missing?
Although the access market is quickly turning to wireless connections, fiber still has its place and is a growing commodity for vendors.
To offer high-level fiber quality assurance to the clients they are leasing to, network operators need to start looking into more comprehensive automated OTDR systems.
Heavy Reading's eight key takeaways from the TM Forum's annual jamboree in Nice.
In business as in warfare, it pays to know your enemy.
From The Founder
Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
Women in Comms Introduction Videos
Infinera's Sales Director Paints Tech's Big Picture

6|21|17   |   4:14   |   (2) comments


Shannon Williams, Infinera's director of sales, shares how she achieves work's many balancing acts -- between her role and the broader company, today and tomorrow's tech and more.
LRTV Custom TV
SD-WAN Innovation & Trends

6|20|17   |     |   (0) comments


Versa CEO Kelly Ahuja discusses with Carol Wilson the current status and trends in the SD-WAN market, Versa's innovation around building a software platform with broad contextualization, and the advantages that startups can bring to the SD-WAN market.
LRTV Interviews
Ovum's Dario Talmesio on 5G in Europe

6|20|17   |   02:16   |   (0) comments


At 5G World 2017, Dario Talmesio, principal analyst and practice leader on Ovum's fixed and mobile telecoms European team, explains the emerging trends amongst European operators as they prepare for 5G.
LRTV Custom TV
Putting Power on a Pedestal

6|19|17   |     |   (0) comments


ARRIS's John Ulm says a major accomplishment of SCTE•ISBE's Energy 2020 program is increased focus on power cost and consumption, including inclusion of energy requirements in operators' RFPs and RFIs.
LRTV Custom TV
Gigabit Access: The Last-Mile Pipe for All Future Services

6|19|17   |     |   (0) comments


A Gigabit access platform being deployed today must be able to deliver all types of services to an increasing number of devices. A non-blocking architecture is necessary to support the ever-increasing growth in bandwidth demand. The Huawei Gigabit access solution is based on a distributed design that is fully scalable to deliver a unprecedented performance.
LRTV Custom TV
Key Factors to Successfully Deploy an SD-WAN Service

6|19|17   |     |   (0) comments


As service providers transition their SD-WAN solution from trials and limited deployments into production at large scale, there are important considerations to successfully operationalize these solutions and realize their full potential, without adding complexity, introducing uncertainty or disrupting current business operations. Sunil Khandekar, CEO and Founder ...
LRTV Custom TV
IoT Solutions: Rational Exuberance

6|19|17   |     |   (0) comments


IoT solutions are morphing from hype into viable business opportunities. Huawei has the platform and ecosystem support to help carriers successfully address new business opportunities in the IoT space.
LRTV Custom TV
Realizing ICN as a Network Slice for Mobile Data Distribution

6|19|17   |     |   (1) comment


Network slicing in 5G allows the potential introduction of new network architectures such as Information-centric Networks (ICN) as a slice, managed over a shared pool of compute, storage and bandwidth resource. Services over an ICN slice can benefit from many architectural features such as Name Based Networking, Security, Multicasting, Multi-homing, Mobility, ...
LRTV Interviews
Ovum's Mike Roberts on 5G Uptake

6|19|17   |   04:08   |   (0) comments


Mike Roberts, research director for Ovum's service provider markets group, explains why he has boosted his 5G subscriptions forecast.
LRTV Interviews
AT&T's Hubbard on Intersection of SD-WAN & MPLS

6|15|17   |     |   (0) comments


Rick Hubbard, SVP of Network Product Management for AT&T Business Solutions, discusses how AT&T's approach to SD-WAN fits in with its overall virtualization strategy, explains how SD-WAN can improve enterprise customers' use of the cloud and addresses the intersection of SD-WAN and MPLS.
Telecom Innovators Video Showcase
Keep Connected IoT Devices Under Control With Allot

6|15|17   |     |   (0) comments


Allot AVP of International Pre-Sales, Daniel Keidar, explains how communications service providers can protect infrastructure and service availability from flooding attacks caused by malfunctioning or bot-infected devices connected to their network.
LRTV Custom TV
ZTE 5G World Highlights

6|15|17   |     |   (0) comments


ZTE showcases its leading 5G innovations at 5G World in London.
Upcoming Live Events
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Montcalm Marble Arch
November 1, 2017, The Montcalm Marble Arch
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Netflix's Lesson in Culture Expectation Settings
Sarah Thomas, Director, Women in Comms, 6/21/2017
Kalanick Steps Down as Uber CEO
Sarah Thomas, Director, Women in Comms, 6/21/2017
BT Tech Chief Makes Plea to 5G Chip Vendors
Ray Le Maistre, International Group Editor, 6/20/2017
No Imagination: UK Chip Biz Goes Up for Sale
Iain Morris, News Editor, 6/22/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.