The age of the internet of things (IoT) is leading carriers to have a big rethink about how they approach the market. Vast quantities of data will be coming over networks from millions and billions of devices of all types and a wide variety of business sectors, ranging from farming to the automotive industry, so carriers need to consider carefully how they manage and organise their networks to accommodate this traffic.
One way of doing this is by introducing more dedicated IoT technologies and networks in a bid to create clear, specific offerings to handle that kind of data and steal a march on others in the market.
Vodafone explains, for example, how it has developed its own management platform to handle connectivity in a dedicated IoT network.
“This has comfortably been able to accommodate the doubling of data volumes we have seen over the last 12 months, as well as more than a million new IoT SIMs that we distribute each month,” says Phil Skipper, head of IoT business development at Vodafone.
The company has complemented this by investing in new technology such as narrowband IoT – launching its first commercial service in Spain in January 2017. The aim of this is to help achieve better coverage, roll out to hard-to-reach locations, optimise power consumption and cut costs. Such factors could be important in IoT verticals that may call for large volumes to generate good revenues, like smart metering. “The business case for success in IoT for the smart meter sector is predicated on scale,” says Skipper. “Technology enhancements such as the introduction of narrowband IoT deliver a lower cost base for items such as smart meters.”
Verizon’s US-wide network
A new term to learn is Cat M1 – meaning “category M1”, a version of 4G LTE mobile technology optimised for IoT services. Verizon has just launched what it describes as the first nationwide commercial 4G LTE Cat M1 network in the US. The company says the network, which uses a virtualised cloud set-up, is a “game-changer” that allows rapid roll-out of IoT services using a new LTE chipset designed for sensors, using less power and providing extended battery life.
David Vasquez, director of IoT global business development at Verizon Enterprise Solutions, says that from a wholesale perspective, the company’s ability to both facilitate connectivity and have Cat M1 modules already pre-integrated into its IoT platform, called ThingSpace, is making it easier “for customers to partner with us and let us do what we do best, which is ultimately connect their devices and applications”.
AT&T, for its part, is “rethinking how we build and manage our network” to keep up with the growth in demand for general data and applications such as IoT, 4K video and virtual reality, says Mobeen Khan, the company’s assistant vice president for IoT solutions.
He cites moves including AT&T’s push to virtualise 75% of its network by 2020 and its use of approaches such as low-power wide-area networks and satellite technologies, with 5G also set to be “a critical part of staying ahead of demand”.
He says that even if some IoT devices might be less successful than others and certain specialised ones that have been rolled out in relatively small numbers, many have been successful.
The company is, for instance, seeing the connected-car segment grow rapidly, and overall it has approved almost 3,000 types of IoT devices from a wide array of vendors to connect to its network.
It’s not just about generating revenues from simple connectivity of end devices, says Khan, but the whole offering that AT&T can provide to its customers. “We are helping customers with solutions to their full range of IoT needs, rather than focusing only on connectivity for their end-point devices,” he says.
“For example, utility customers buying connectivity for smart meters also have a range of other requirements for their smart grids as critical infrastructure,” he says. “AT&T is working on custom private LTE networking using dedicated spectrum.”
As well as that, the company has the ability to enable the collection and analytics of data relayed by the devices both securely and on a global basis. “Harnessing data to predict, learn and make real-time decisions can create distinct competitive advantages for businesses,” says Khan.
Another idea that is gaining traction to help with this kind of need to move the IoT market forward in this data-driven world is edge computing – a concept being promoted by players such as Vapor IO, which offers specialised software for edge environments to telcos, cloud operators and others.
CEO Cole Crawford does not specify which telcos Vapor IO is working with, but the mainly US-focused company has more than 10 partners worldwide. The company also announced last year that one of its first deployments for its Vapor Edge technologies would be with Czech Republic-based data-centre company Centrepoint.
The key question, says Crawford, is: “How do you get meaningful compute or machine learning as close to the user as possible without the complexities and cost of tracing that backhaul through its traditional path, which is expensive and very high latency?”
He explains: “We have witnessed a paradigm shift in how carriers and hyperscale cloud providers will need to interact with each other.”
In that world, he says, “we thought we could help them maximise their return on investment, lower their capital expenditure and help them with the situational awareness or telemetry of all of the metadata that they’re gathering”.
Fresh partner models
Combined with new network develop-ments, some carriers are promoting fresh models for selling to other carriers and partners, helping them achieve the scale they need for many IoT services that often require a global reach – and bringing more of an organised structure to the space.
In a recent example, Verizon unveiled its Exponent venture, aimed at enabling other carriers around the world to deliver IoT services using the multi-billion dollar investments that Verizon has made in big data, artificial intelligence and IoT platforms.
Vasquez points out that it can be tough for carriers to handle the wide variety of demands in the IoT world and invest all the necessary time and money in building a business, so all the effort Verizon has expended to bring these concepts to life can come to their aid too – and could help spur the wholesale market for other carriers by making it easier for them to sell their own IoT services.
Belgium-based wholesale carrier BICS, meanwhile, recently launched its SIM for Things product, which helps customers from industry verticals to connect, manage and deploy IoT devices and services globally, and M2M in-the-Cloud, a white-label offering that provides mobile operators and MVNOs with all the tools needed to launch and run M2M and IoT services on a global basis, based on a virtualised core network in the cloud.
Experience and relationships
BICS is well placed to serve the market with its networks, having already acted for many years as a provider of hubbing services in the roaming arena, explains Mikaël Schachne, vice president of mobility solutions.
The aim is to use the experience and relationships it has already developed in the market to offer quick access to partners in different countries.
“We see the evolution of our carrier wholesale role to aa larger set of players mainly active in the IoT space that need high-quality, complete mobile connectivity all around the world,” says Schachne.
BICS has also just struck a partnership with IoT and M2M mobile services company Hanhaa that will provide global connectivity for the UK-based company’s new Parcelive parcel tracking service.
New revenue streams
Separately, Telefónica is using its Telco4Telco approach to help wholesale customers generate new revenue streams in areas such as IoT, security, the cloud and big data, and announced a deal in October 2016 to provide IoT services to Greek operator Wind Hellas – not just aiding with connectivity, but also end-to-end management.
But the complexity of the IoT sector means that carriers face many challenges in creating a successful business in this area, in addition to generating scale and managing vast amounts of traffic and networks of devices – not least the ever-present issue of security.
There are also challenges relating to selling in many potentially unfamiliar segments. “IoT is often very industry- and application-specific, often requiring specialised knowledge to sell effectively. We have invested to train our broad direct business and consumer sales channels on how to manage IoT opportunities,” says AT&T’s Khan.
Vicente Muñoz, global head of IoT at Telefónica, adds that sales cycles in IoT are often long, and convincing companies to move past their legacy systems is not easy, thus requiring a consultative approach to selling.
On the wholesale side, IoT services can be uncharted waters and they raise the need to train and educate your sales team and customers to sell them, unlike services fully embedded in the traditional telco proposition such as voice and IP, says a separate spokesperson at Telefónica Business Solutions.
“This is a clear challenge for any sales organisation,” says this executive. “You need to create an end-to-end value proposition for telcos that covers from the platform to the go-to-market tactics.” Telefónica, he says, has a large amount of experience from its many countries to enable it to do this.
BT has, meanwhile, set up an IoT “centre of expertise” within its wholesale and ventures division, which delivers IoT services to customers and wholesale partners, as well as the company internally, says Guillaume Sampic, strategy director at BT Wholesale & Ventures.
The company is trying to “transform internal processes” through IoT, in addition to aiding partners, says Sampic. Examples include the use of IoT devices to track the company’s fleet and optimise scheduling of its vans, and using sensors in its cable drums so it can easily locate them, helping to better manage stock and reduce repair time. Ultimately, from all the activities BT carries out in IoT, “we expect direct benefits to our wholesale customers in terms of better and sleeker operations”, says Sampic.
Vapor IO’s Crawford says one of the main questions for operators in the current environment is whether they can innovate fast enough – but he thinks carriers are getting there step by step, and that the industry has an exciting time ahead.
“If they are not careful I do think the telcos will have a massive role to play in this new world,” he says.
