Are enterprises the next MVNOs? The business case for connecting ‘things’

The Internet of Things is called so for a reason: it’s not just about linking consumers to their smart devices, and their smart devices to their gadgets and gizmos. It’s also about connecting a web of sensors, infrastructure, and the industrial components of machines which form the industrial IoT.

Providing connectivity to this vast range of ‘things’ undoubtedly presents a big opportunity for operators to reclaim revenues lost to the decline in voice services. However, the opportunities don’t stop there. Instead, operators can work to establish themselves as full, end-to-end IoT/industrial IoT service providers for business and industry, says Mikael Schachne, VP of mobility & IoT business, BICS.

According to Analsys Mason, operator IoT revenue grew between 7.9% and 30.4% during 2017, compared to the year previously. Yet despite this rapid growth, this percentage only accounts for a relatively small share of operators’ overall business; less than 2% for those operators the analyst house examined. This leaves sufficient room for expansion, and for operators to build out IoT-focussed sectors and service offerings.

Leveraging loyalty

Without the networks, skills, resources and knowledge, many businesses will be looking to enter the IoT with a fully managed proposition. An operator which has an existing contract with a business customer (let’s say a manufacturer) for hundreds of its employees’ smartphones could, for example, expand this agreement to cover M2M technology to automate production in the manufacturer’s factories. Or, a logistics firm with a longstanding phone contract with an operator could quickly, easily, and cost-effectively enhance this agreement for a new connected fleet launch, with the operator providing connectivity for hundreds of trucks.

Vodafone’s most recent IoT Barometer reported that the proportion of businesses which have embraced the IoT (those with more than 50,000 connected devices), has doubled since 2016. In addition, these businesses have increased their spending on IoT compared with 12 months ago. This all adds up to a major business opportunity for operators.

Know your consumer

And it’s not just the enterprise and industry – operators should also take note of the consumer market. The number of households owning more than three devices is reportedly up by a quarter since 2017. Whether its smart speakers, voice-controlled assistants, or connected kettles: these devices will need reliable, cost-effective connectivity with a quick, easy set-up. Who better to provide this connectivity than the operator also managing homeowners’ smartphone subscriptions?

This bundled services approach could also be a key factor in helping to reduce customer churn. The more devices a consumer – or a business – adds to a contract, the more comprehensive a view the operator has on subscriber behaviour. Actionable insight can then be drawn from this data, and used to tailor service plans to subscribers, based on device usage. In addition, enterprises can analyse data from all of their end-points, leveraging this to make more informed business decisions and streamline operations.

Businesses take control

Operators aren’t going to be the only ones cashing in one the IoT, though. Many businesses will themselves take on the role of MVNO, allowing them to fully control the lifecycle of each of their connected ‘things’, and manage bandwidth according to each device requirement.

Mikael Schachne

This will enable them to deliver the highest quality of service as well as accelerate the development of new solutions by integrating the connectivity layer with their internal IT environment. End-to-end processes will be optimised, improving overall service quality and reducing OPEX. Businesses will still be reliant on an operator for accessing the wireless infrastructure of course, but will be able to manage their own network of devices independently.

Launching an IoT proposition can be as easy as installing a global SIM (though in the future, devices and sensors will likely be produced with eSIMs), and managing contracts and end-points on a cloud-based platform. The type of end-points would depend on the sector a business operates in, and with advancements in SIM technology and the availability of reliable connectivity increasing globally, could soon be limitless.

Moveable connected consumer products like fitness devices, watches, laptops, and clothing; cars and lorries; utility meters; patient monitoring tools and fall alarms; remote assets like forklift trucks and drilling stations – all of these elements would be visible, and controllable, by the business/MVNO.

Connectivity without borders

This approach is gradually becoming a reality for an increasing number of parties, due to the straightforward deployment of global SIMs, and their ability to ensure multi-network connectivity anywhere in the world. As a result – and unlike operators – businesses don’t need to establish multiple roaming agreements with operators in every region a connected device may travel.

The opportunities afforded by connecting ‘things’ are many, diverse, and growing. Connectivity can be scaled and managed, and – crucially – businesses, operators, and MVNOs alike can augment revenues, thanks advantage of a truly global connected ecosystem.

The author of this blog is Mikael Schachne, VP of mobility & IoT business, BICS

Comment on this article below or via Twitter: @IoTNow_OR @jcIoTnow

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