Tele2: Lack of Strategy Is Main IoT Barrier

Tele2 has developed a 'winning formula' for IoT success, it claims, and it has nothing to do with technology.

Iain Morris, International Editor

November 22, 2016

3 Min Read
Tele2: Lack of Strategy Is Main IoT Barrier

DUBLIN -- IoT World 2016 -- Sweden's Tele2 says that lack of a clear business strategy is a far greater barrier to Internet of Things (IoT) adoption than any technology concerns.

The telco, which serves about 15 million customers across nine European markets, canvased attendees at IoT events in Sweden and the Netherlands and found that 60% of respondents picked "lack of strategy" over considerations including finance, technology and "lack of competence" when asked what they believed was the chief barrier to IoT adoption.

Attendees at the IoT events included organizations to which Tele2 AB (Nasdaq: TLTO) is selling IoT products and services, some of the operator's partners and various exhibitors. According to the operator's website, there were between 550 and 700 attendees in total at the events, which took place earlier this year in Stockholm and Utrecht.

The feedback suggests many organizations are holding back on making IoT investments because they do not have a clear understanding about what they are trying to achieve.

"The way we want customers to engage is to first define the strategic direction," said Rami Avidan, the managing director of Tele2's IoT business, during this week's IoT World 2016 event in Dublin. "IoT is a strategic decision rather than a technology decision."

Avidan says too many organizations start by thinking about technologies that may eventually become obsolete instead of giving their attention to the business rationale for IoT moves.

Nevertheless, trying to build forecasts and develop conventional business plans is not possible when it comes to IoT, he reckons. "The problem is you just don't know -- the only way to know is to take a leap of faith and learn while you are doing it," he says.

Avidan has come up with his own "winning formula" for any company getting into IoT. Projects first need an "internal hero," he says, who can drive through the changes that are required.

There also needs to be "management buy-in," he emphasizes. "If you don't have the key stakeholders aligned you won't change at the pace you need to," he says.

Most important of all, however, is what Avidan calls "longevity," or the need to have faith that IoT will eventually deliver in the absence of any short-term impact on financials.

"You won't have great financial benefits in three to six months," he says. "But you will stay alive as a business and gradually increase margins and revenue streams."

Want to know more about the Internet of Things? Check out our dedicated IoT content channel here on Light Reading.

With about 350 enterprise customers, Tele2 claims to be doubling sales from IoT annually, although it does not break out the actual revenue figure. It also says its IoT business will grow from about 110 people today to around 200 by the end of next year.

About a third of its employees are focused on R&D, with another third dedicated to sales and the remaining third in operations.

Unlike some other operators that are taking a more end-to-end approach, Tele2 is heavily focused on bundling value-added services around connectivity solutions through partnerships with other companies in the value chain. It currently claims to be working with about 150 partners.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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