IoT is here. IoT is growing. This is no longer a prediction but a reality. We are going to see more IoT devices, more industries adopt IoT, and IoT will play an increasingly central role in business-to-business and business-to-consumer interactions.
What is less clear is what role telecommunications providers will have in facilitating this growth. Obviously, telcos will have a role, but the risk, just as with data services, is one of commoditization: telcos simply being pipes through which IoT devices transmit data.
2018 will be a pivotal year in determining the nature of the role that telcos will have in the future of IoT. Telcos can use IoT as an opportunity to differentiate, attract enterprise customers, and create value-add ecosystems. Or, they may simply find themselves selling a few more SIMs.
As a telecommunications software provider and expert in data monetization, Alepo has an inherent interest to see telcos expand both horizontally and vertically in the IoT arena.
So, while we feel that, in some ways, 2018 will be “more of the same” for IoT in general, we are also confident that it will be an inflection point, where IoT becomes mainstream and the telco will come to dominate as the infrastructure providers for many connected devices.
Here are our big, bold, predictions for 2018:
#1: Technology will reach a critical maturation point so telcos can capitalize on IoT
The last couple of years have seen telcos capacity to service IoT grow, through:
Support for low power devices via narrowband-IoT (NB-IoT)
Access to network services, such as device location and message triggers using APIs
Secure connectivity between devices and applications
Application-level optimization of QoS and network resources
There has been some fragmentation in specifications and approaches used, but this year we’ll see increased convergence and a maturation that will facilitate large scale application of telco-based IoT.
This critical level of maturity, combined with the advantage of having a pre-established wireless infrastructure, robust processes, and ability to scale ensure the dominance of telcos in IoT. This dominance will be evidenced by accelerated growth in the use of wireless telecom for IoT when compared with other infrastructure.
Telcos that are yet to enable their network for NB-IoT must act quickly, reusing as much of their existing infrastructure as possible.
#2: Business sophistication will grow; complete turn-key offerings will be expected
Mainstreamization of IoT means a growing number of enterprise users and use cases. These users, in turn, have increasingly sophisticated requirements and mounting expectations from the infrastructure providers.
Attracting enterprise IoT customers will be key to monetization:
Provide lifecycle management and automation for IoT devices and connections
Ensure network policies are flexible and can address highly-specialized business cases
Provide self-administration for large enterprises, including APIs
Visualize and provide analytics for devices
Provide simple bulk device management (from dozens to millions of devices)
#3: Telcos will define how they monetize IoT going forward
From as early as 2014, it has been observed that OTT and IoT share a common adoption pattern and carry with them similar risks and opportunities for the telco. This year provides a fork in the road that will determine whether IoT will be, for the telco, what OTT has been. Or, whether it will become an opportunity to differentiate and create new value, new channels, and new applications.
VP of Enterprise Products,
2018 will be the year that will define the role of the telco in IoT and will answer those questions.
#4: Telcos with unique IoT offerings will continue to emerge in 2018, maintaining early mover advantages
The last couple of years have seen prominent tier 1 telcos, such as Vodafone and Deutsche Telekom, create and showcase extensive IoT infrastructure, services, and APIs. However, the early mover advantages are still in play.
Telcos able to attract large-scale deployments will build positive publicity, create new and high-value revenue streams, and acquire low-churn customers. But, because the market is cementing rapidly, this must be done through ready-rolled infrastructure and software services to enable governance and support the other trends highlighted in this article.
#5: Partnerships will help differentiate, but infrastructure will be a challenge
Differentiated IoT services will rely on partnerships with niche application providers and device vendors to provide compelling solutions for utilities, transportation, retail, and other verticals. But, legacy BSS infrastructure will struggle to support these partnerships with innovative revenue sharing, charging, and QoS rules. Telcos must be able to easily build partnerships by:
Rapidly onboarding partners
Providing end-to-end facilities that can be extended to new lines of business
Supporting various partnership models: from open ecosystems to in-house offerings
2018 is shaping up to be an exciting year for IoT in telecommunications. Tier 1 mobile telecommunication providers have outlined the possible, but this is the year in which we move from the possible to the practical and start seeing large scale use cases for telco-enabled IoT. Telecommunication providers now have the opportunity to build new lines of business that support communities and enterprises alike.
About The Author:
Rafael Avigad is vice president of enterprise products at Alepo. Rafael has nearly two decades of experience in software development, helping some of the world’s largest corporations with legacy modernization, machine data analytics, and enterprise DevOps. He speaks in major conferences globally and has co-authored four technical books. When he is not helping Alepo expand its portfolio and communicate its mission, he is trying (and often failing) to catch every wave in the Indian Ocean.