Cellular IoT connectivity is not an internet experience, it’s a secure, dedicated connection

Andrew Orrock, Arkessa

Analysys Mason’s research director Tom Rebbeck caught up with Arkessa chief executive, Andrew Orrock, to talk about how the barriers to IoT adoption are gradually falling, and how mobile virtual network operators (MVNOs) can succeed in a market with numerous large global mobile network operators (MNOs)

Tom Rebbeck: There’s a general feeling that IoT has been a bit slower than expected to take off. Is that your feeling as well and if so, why do you think that’s the case?

Andrew Orrock: With enterprise that has been the case. We have seen concerns – around sourcing, the business case, scaling, security and platform integration – but gradually these barriers are coming down.

A lot of people think about mobile connectivity based on their experience with internet on a smartphone. This has coloured views as to what cellular means as people do not see it as a secure dedicated connection. But, once you get into the discussion about managed services, and we show that we can give customers the tools to manage and monitor the data connections, manage the billing, and provide a secure private network we can show that we are not simply connecting our customers devices to the internet – far from it. When we explain all of this to our channel partners, they realise they can go to their customers and get around the problems they have had in the past – they can show how our network infrastructure works and that it is secure and private.

TR: So it has been slow as it has taken time for people to realise what it means to using a mobile network for IoT connectivity?

AO: Yes, there has had to be some education. The idea of the traditional SIM card provided by a mobile operator essentially locks a customer in. If you are deploying devices around the world, or even across one country then the idea of single sourcing from an MNO with traditional SIM cards has been a problem.

Today the role of an MVNO is much clearer. We can provide multiple networks through a single relationship, a single contract providing commercial, technical and customer support. That creates a much better reaction in companies both small and large.

In the near future, the reprogrammable embedded subscriber identity module (eSIM) will give enterprises more comfort and more control and flexibility. The same solution will work globally with a range of different cellular technologies, from 2G to 5G and the cellular flavours of low power wide area (LPWA) technologies, like narrowband IoT (NB-IoT).

TR: Earlier you talked about the challenges of sourcing. What did you mean by that?

AO: The companies that have deployed IoT and that have shown most growth tend to be small to medium enterprises (SMEs). From a sourcing point of view, the larger enterprises manage their supplier lists quite closely and it can be difficult for SMEs to get onto these lists.

What we have found works well is to work with finished goods distributors or IT systems integrators. They are often already on supplier lists and, as their trusted experts, we are pulled through as part of that relationship.

TR: This picks up on a theme we have seen lately of MVNOs selling into component manufacturers and not to the end user. It changes who you are selling to.

AO: Yes and no. This is a very strong point around eSIM. It alters the connectivity supply chain and has created the opportunity to embed connectivity at the component level. We still engage directly with original equipment manufacturers (OEMs) of course, especially those with a keen sense of what they want to achieve from IoT connected products; for example in terms of user experience.

Consider the user experience with the Kindle 3G – you are paying for connectivity up front in the cost of the device. Your turn on your device and decide “I want a new book” and you download it. You don’t have to think about connectivity, pairing a smartphone or Wi-Fi passwords. It just works.

That is exactly what we are recreating for Brighter, one of our mobile healthcare customers deploying across the world. Connectivity that just works.

TR: And for most of these IoT devices you can predict how much data will be used for a year or for ten years, unlike for the Kindle where usage can be variable.

AO: Exactly. We have examples of customers doing just that. They are going as far as bundling multiple years of mobile data.

More and more of our customers understand that the way to scale is through selling integrated solutions and we are seeing this exact outcome as a result of our investments with systems integrators (SIs), value-added resellers (VARs) and in the embedded supply chain.

TR: eSIMs seem to be a part of this, and maybe an essential part of this. Again, they have been around for a while and have been a bit slow to gain traction. It seems like maybe you are getting some more traction now.

AO: You are right eSIM as a capability has been around for some while but the GSMA standard for remote provisioning was only approved last year. While the likes of Apple and others have been using their own form of embedded universal integrated circuit cards (eUICC) for a while, not everyone could do that – large scale global adoption requires a global standard.

There have been a lot of moving parts behind the scenes, like interoperability with different subscription management services, but that is coming to the point of relative maturity.

Critically, eUICC is removing that perception or fear of lock-in. If an enterprise decides it wants to renegotiate commercial terms after two years, it doesn’t need to recall all of its devices, which would be a huge cost overhead and a huge burden.

TR: You are a relatively small company. How do you compete against the large MNOs, like Orange and Vodafone, some of which have more than a thousand people in their IoT teams?

AO: We have very strong network partnerships such that we can offer multiple networks in each country and so can offer better coverage. The big MNOs all have international networks but not necessarily global networks and, even in one country, they are often just one of three or four networks. They might have strong coverage in one region or country, but they are weaker in another. Our customers want the best of everything – they cannot afford to have poor user experience. They need a single provider that can give them the best connectivity in the geographies that they service, which is what we can offer. Clearly this requires strong partnerships with the MNOs and of course trust, and we take our responsibility around integrity, security and operator relations very seriously indeed.

Commercial flexibility is also key. XaaS type business models with monthly subscription and applications with variable data usage all require creativity and commercial flexibility. Standing behind a price book does not work in those situations – structuring tariffs around the customer needs is vital and we have specialist commercial and solutions teams which work with our customers to help them through that process.

www.arkessa.com/euicc

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