The estimates vary from $250bn to $1trn depending on which industry report you read, but what they all agree on is that the Internet of Things (IoT) is forecast to be one of the key revenue-driving opportunities presented by the fourth industrial revolution.
As a result, it’s not a surprise that IoT is already becoming one of the biggest battlegrounds for telecoms companies. However, a recent report from Ericsson, Exploring IoT Strategies, has highlighted that while operators are testing out multiple routes to monetising the IoT opportunity, more than two-thirds lack an adequately defined strategy to do so.
This has raised doubts and multiple questions about whether telcos are well equipped enough to capitalise on all of the opportunities presented by the IoT. But of course, it’s not only operators who are looking at ways to incorporate dedicated IoT services and offerings into their business models to increase revenue. Telcos should aim to build partnerships with the businesses who are looking to embrace IoT connectivity and look at the different ways in which they can monetise their services.
In fact, telcos are in an advantageous position in terms of being able to provide new connectivity solutions and services for the IoT; after all communications services is at the heart of what they do. The telecoms industry is rapidly-evolving and competition is fierce, so it’s likely only a matter of time before operators define a clear strategy and are able to reach both new and existing customers with IoT solutions and services that will ensure relevance and sustainable growth.
But how exactly can telcos benefit from the exponential growth of the IoT? Where do the big opportunities lie? And how can operators capitalise in such a way so as to expand their core customer base beyond the telecoms supply chain?
Well, one key area is content, and more specifically, content delivery. The potential of the IoT in digital content delivery will mean that providers can move beyond traditional methods of delivering content and entertainment.
This is an area telcos specifically can exploit, offering an IoT connectivity service that will enable content providers to package up and simultaneously deliver content to millions of connected devices across a wide range of digital channels. As more and more media companies are evaluating the potential of IoT to enhance and reshape their content delivery strategies, telcos should look to strike and take advantage.
Data has been mentioned as a vast by-product of IoT connectivity, and this in itself is often the most valuable commercial tool for businesses. This is also an area telcos can take advantage of given their capability for performing real-time data analytics to determine aspects such as product performance, as well as forecasting network capacity and improving customer experience.
Another area operators should engage in is security. Keeping IoT networks free from external threats and security vulnerabilities is something that will be near, if not at the top, of most businesses’ agenda. While the IoT facilitates the connection of multiple devices, the amount of data sourced from these makes it extremely challenging to monitor, track, identify and remove any suspicious traffic over the network.
Telcos have a rich history of best in class security services and are therefore in a strong position to provide customers and prospects with a secure offering to protect IoT networks. Services including anti-phishing, data encryption and other proactive security countermeasures offer telcos a clear way of monetising their IoT offering and reaffirming their reputation as trusted partners.
With the capability of connecting millions of devices across an extensive region or several regions, an IoT network facilitates the possibility of managing multiple devices efficiently and easily irrespective of their location. However, this is something many businesses have struggled with historically, particularly because of the fact that devices are often prone to damage and malfunction.
Telcos can take advantage of the opportunity this presents in terms of the management and monitoring of the lifecycles of connected devices within a company’s IoT network. Providing services such as troubleshooting, repair, restoration and fault-detection of out-dated or malfunctioning devices would unlock a new revenue stream for operators. This ongoing management of multiple connected devices within a business’ IoT network will ensure companies have control, making them more resilient and helping lower operational costs, while also boosting revenue for operators.
There is little doubt that there are some extremely viable and profitable opportunities out there for telcos looking to capitalise on the full potential of the IoT. However, it’s important to remember that these opportunities should be about creating value beyond connectivity.
Telcos should be opening up their services to support businesses from all sectors who are looking to utilise IoT connectivity as part of their business models. Then there’s the advent of 5G to consider, and the significant impact this is expected to have on the IoT. But while 5G uses cases are still being planned, let’s just focus on one thing at a time!