IoT Portfolio, Impact on Telecoms

Telecom services are largely commoditized now, yet they constitute the core of the telecommunications provider’s service portfolio.

In a highly indistinguishable service offering, the only differentiator is price and service effectiveness – customer delight. On the contrary, high commoditization force the telecoms to slash the prices to gain market share and remain competitive, leading to a low ARPU. Apart from low ARPU telecom sector is facing a high churn rate due to competitive promotional offerings.

Internet of Things, a new opportunity that can solve both the problems, customer retention, and revenue generation, by creating new revenue streams.

Internet of Things (IoT) will generate estimated US$1.8 trillion revenue for mobile network operators by 2026, driven by the early deployment of commercial Power Wide Area Networks in licensed spectrum, according to GSMA, which highlighted new figures in the IoT Forecast Database Research published by analyst house Machina Research.

IoT new revenue stream, the opportunity for telecoms

The major Telecoms operators in India may consider amplifying their service portfolio with a range of IoT-enabled services in intelligent manufacturing, healthcare, smart retail, smart city, smart home, vehicle, and asset tracking.

To monetize this opportunity, I firmly believe that telecom companies should build an end-to-end IoT platform for their customers, end-to-end helpdesk support, API integration, built-in encrypted OTA support, and customer self-service cloud device platform.

A modular approach to the integrated system architecture design allows integrating any customer to connect their IoT solutions and services securely with a different degree of involvement in the solution and service provisioning. This can lead to a service-based subscription model for a continuous revenue stream. Some examples can be:

• Complete Business Suite: A Software as a Service or Solution as a Service to solve end-to-end business problems of a particular area, for instance, fleet tracking and inventory management like Bossard SmartBin.
• Smart Connectivity Solutions: Any IoT device needs to be connected to a cloud infrastructure or on-prem environment to share the sensor data for further process and convert that into information for informed decisions. An insignificant investment in cloud backend service to store, manage, strategize, and further connect the data stream to customer’s enterprise environment via REST API or webhook, etc., can effectively monetize this opportunity for a regular revenue stream as SaaS.
• Big data analytics and data storage services: The biggest challenge in our environment nowadays is the increasing number of devices connected to the internet and generating massive data for processing. Currently, most telecoms are working as connectivity providers, and they need to realize the power of data. This can enable them to offer descriptive, diagnostic, predictive, and prescriptive data analytics services and add significant value from the data generated by IoT devices and business analytics.
• Wireless IoT connectivity services: In the current service environment, telecom companies are providing by enlarging only connectivity solutions via their already available telecom infrastructure. They can support or play a more significant role and create a new revenue stream by delivering application or usage-specific service models. This can be achieved by incorporating readily available open-source protocols and services, like connectivity services based on NB-IoT, LPWAN, LoRa, etc.

Also, by providing proactive device and platform monitoring services, they can add significant value to their client’s decision support system.

IoT value for telecoms- Fast facts AT&T signed 300 IoT deals in 2015. But IoT connectivity equates to less than 1% of global telecoms industry service revenues.