Increasing mobile and fixed-line penetration rates across the globe are putting pressure on Communication Service Providers (CSPs) to achieve scale if they want to maximise the growth and sustainability of their services and take full advantage of 5G. However, the average number of text messages and voice calls has shrunk due to the proliferation of Over-The-Top (OTT) messaging apps and VoIP service providers, which use the internet to provide their services and deliver content.
As a result, CSPs currently face broader competition, which isn’t only dissuading customers from using standard Telco services and absorbing a significant slice of revenue, but also overloading the network due to Internet and data traffic increases. In this context, they are encouraged to look for new revenue streams that harness their connectivity ownership advantage and telco-related skills, aiming to recover lost ground in their core mobile and fixed markets.
An opportunity has arisen in the shape of the Internet of Things (IoT), motivating CSPs to rethink their strategies and embed digital into their business models, especially with regards to the B2B segment, to capitalise on their access to vast volumes of data flowing through their infrastructure - plus holding an upper hand over competitors, as they yield the expertise and resources to manage and connect IoT devices in their network.
The regularly increasing number of digital natives living the “always-on” lifestyle is pushing the demand for connected devices, which already exceed 20 billion worldwide.
On the B2B side, the Industry 4.0 evolution and the drive to digitalisation and automation are further contributing to the adoption of smart solutions. Indeed, the number of global IoT connections will more than double between 2019 and 2025, reaching almost 25 billion, with a more expressive positive evolution in the B2B segment. The global IoT revenue will more than triple to $1.1 trillion within the same timeframe (via: GSMA Mobile Economy 2020).
While connectivity is likely to account for the bulk of current IoT revenues, steady growth in the IoT market will increasingly rely on vertically-focused models that provide specialised end-to-end (E2E) solutions and integrate additional IoT capabilities such as platforms, security and analytics (via: GSMA Intelligence).
CSPs have already been urged to expand IoT capabilities with the emergence of NB-IoT which enables an efficient connection of a wide range of mass distributed devices to an LP-WAN network. Nevertheless, it gains increased importance in the 5G era.
As enhanced mobile broadband, it’s believed that 5G will enable massive IoT, boosting network capacity with high data rates and performance - it supports a higher number of devices at the same time - in multiple applications of IoT.
The expectation is that there will be a shift towards more data-hungry projects (such as traffic monitoring for self-driving cars) due to 5G and that this technology will create the conditions for a more IoT-friendly ecosystem with vast improvements over the current capabilities of 4G.
The opportunity is real and predictions are promising:
Data Monetization
The IoT business case for CSPs is a unique chance to monetise the data these companies have and venture into new industries - offering solutions beyond network connectivity;
Partnerships
The IoT business is complex due to technological diversity, exponential devices growth and the lack of mature standards. By joining forces with partners in the IoT ecosystem, CSPs can explore new opportunities and IoT use cases to develop a more extensive array of services based on their unique assets.
Partnering at multiple levels, from strategy and architecture to hybrid development teams, Celfocus offers a comprehensive approach to the IoT domain aimed at creating a roadmap for a holistic and integrated view of IoT applications.
Dive into CSPs’ IoT journey including Managed Connectivity, Value Added Services and Vertical Solutions.
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