Predicted to generate more than $450 billion (€365.03 billion) in annual revenues by 2020, the IoT presents massive opportunities for telecommunications service providers. However, competition will be fierce; major telcos such as Verizon, Vodafone, and Deutsche Telecom have already invested billions with connectivity plays as well as on IoT services and platforms, meaning smaller carriers will need to move quickly to keep pace.
For operators to realise the IoT’s full potential, it is important that they look beyond just providing basic connectivity and consider how they can move up the value chain. Through offering value-added services including security, analytics, data storage and brokerage, business consulting, and systems integration, they can dramatically increase their stake in the IoT, says John English, senior manager, Service Provider Solutions at NETSCOUT.
In addition, IoT solutions enable operators to provide “smart data” (real-time, scalable meta data imbued with user experience that is derived from network traffic) that can be monetised as part of the metering and usage charges, such as providing information for security, lighting, parking, etc. as part of a smart city play.
By expanding their business model into new IoT device and service payment schemes, carriers can relieve their dependency on flat rate data plans for internet connectivity. Through this approach, they will be able to generate vital revenue, and make essential investments in their networks to support the ever-increasing traffic.
In particular, service providers have opportunities in the following areas:
- Connectivity – Only service providers have the necessary experience to deliver scale connectivity that interconnects billions of devices with analytics engines and massive data warehouses. This layer also includes network services—such as quality-of-service guarantees and pricing plans that support the IoT—along with the ability to run analytics engines in the network to manage data flows more effectively and to accelerate response time.
- Service level agreements – All IoT devices and services are not created equal. The bandwidth and traffic priority will vary greatly from “life line” medical and car emergency with low bandwidth devices to connected/autonomous cars with the need for ultra-low latency and extreme availability requirements, to entertainment with high bandwidth requirements, and many more variations.
Think carrier-grade IoT— not for refrigerator out of milk sensors but for applications like robotics, telemedicine, power plant sensors, and connected cars that demand the highest availability. Service providers can only assure what they are measuring. A case in point, BMW switched from Vodafone to Deutsche Telekom due to poor service quality.
- Life cycle management – Service providers can also leverage their ability managing life cycle management in a way that ensures network security, device directory maintenance, and rights management. Such management often takes place years after the devices are installed and spans a universe of devices that is much larger than other suppliers typically manage.
- IoT platforms – Amazon Web Services, Microsoft and IBM are all IoT partners for AT&T, and smaller cloud service providers are also part of the carrier’s IoT ecosystem. A total of 19 different cloud service providers connect to AT&T’s IoT device management platform through the company’s NetBond portal, which integrates cloud service providers as virtual extensions of the multiprotocol label switching virtual private networks that AT&T offers business customers. Having holistic visibility to this multi cloud environment will be critical to its success delivery of services.
Vertical solutions are the industry-specific offers that deliver value to enterprises and consumers. Service Providers may choose to build industry-specific IoT platforms or facilitate, through the underlying layers, vertical solutions that others provide.
- Security – IoT devices and services are being rapidly developed to get to market quickly and cheaply and without concern for device and service availability and security. New narrow band and machine to machine networks are being deployed (LTE-M, NB-IoT, LoRa and Sigfox), and these need proactive monitoring in order to assure quality service delivery and provide network and device security.
For telcos to successfully harness all of these new revenue opportunities, visibility and intelligence will be paramount. This will be compounded as network infrastructure moves to the edge to support the new data loads and traffic patterns that the IoT will drive.
While moving cloud, compute and processing power to the edge of the network enables data to be processed immediately, making a wide range of IoT services possible, it also adds to the complexity of an already complex network.
With IoT solutions underpinning more and more of our lives and businesses, there can’t afford to be an “off.” Having complete visibility across the entire environment is therefore paramount, to ensure operators can assure their IoT services, and realise the IoT’s full potential.
The author of this blog is John English, senior manager, Service Provider Solutions at NETSCOUT
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