Transforma Insights recently published a new report, ‘Beyond Coverage: Building Smarter, Compliant, AI-Ready IoT Networks’ in conjunction with floLIVE, exploring the impact of seismic changes in the technical, commercial and regulatory landscape and how MNOs and MVNOs must adapt their IoT connectivity strategies to reflect that change. In this article, Matt Hatton, Founding Partner of Transforma Insights provides a summary of the key findings, and particularly how Mobile Network Operators (MNOs) and Mobile Virtual Network Operators (MVNOs) must move beyond selling data to become orchestrators of intelligent, compliant, and locally optimised IoT connectivity.
The forces reshaping IoT connectivity
Artificial Intelligence represents both a catalyst and a test for IoT providers. It creates enormous demand for real-world data and requires that data to be managed in ways that respect sovereignty, latency, and security. AI-enabled devices increasingly carry onboard analytics capabilities, while distributed architectures push processing to the network and application edge. Connectivity providers must therefore deliver networks that are flexible, cloud-native, and capable of orchestrating workloads across device, edge, and cloud layers.
At the same time, AI is transforming the operation of connectivity itself. Providers now use machine learning to predict network traffic, optimise routing, and automate resource allocation. Such tools improve reliability and efficiency while allowing dynamic policy enforcement for eSIM profiles and device management. Over time, this fusion of AI and IoT will make connectivity providers key enablers of distributed AI ecosystems, managing data flows and compute placement across borders and domains.
Regulatory and commercial factors are just as significant. Data sovereignty, permanent-roaming restrictions, and new legislation such as the EU Data Act require that connectivity be localised and compliant by design. Networks must be architected to keep data within national boundaries and ensure devices connect through approved local infrastructure. At the same time, there is continued commercial pressure, not least from the ever-present challenge of price erosion in IoT data. This pushes providers to pursue new additional revenue opportunities and migrate towards opex-based models. Cloud-hosted platforms and managed services now replace capex-heavy deployments, allowing faster adaptation and more predictable costs.
Technological complexity further raises the stakes. The arrival of the SGP.32 eSIM standard will significantly extend the use of remote SIM provisioning, including introducing the new role of the eSIM Orchestrator. Meanwhile, and partly driven by the growing reliance on localisation, middleware platforms are evolving into unified “Single Pane of Glass” (SPOG) solutions that abstract multiple networks and compliance domains. Meanwhile, the network layer itself is fragmenting: 2G and 3G are disappearing, 5G Standalone is emerging unevenly, LPWA options are fragmented, and NTN satellite is emerging.
What MNOs must do
A major focus of the report is on what IoT connectivity providers need to do to adapt to this changing environment. Mobile Network Operators (MNOs) must transform from network access providers into orchestrators of intelligent, localised, and compliant IoT connectivity. For global operators, this means building agile, cloud-based platforms that combine compliance, performance, and orchestration across multiple markets. For national operators, it means positioning their networks as critical endpoints in international IoT ecosystems while enabling new forms of partnership and service monetisation.
Embrace cloud-native and AI-aware architectures
MNOs should redesign their IoT infrastructure to support local breakout, distributed routing, and compliance-centric data management. Cloud-based architectures provide the flexibility to meet data residency rules and the scalability to handle AI-driven workloads. Integrating AI into network operations enables predictive traffic management, fault detection, and automated optimisation, essential for maintaining service levels as IoT deployments grow.
Collaborate through cross-localisation and partnerships
No single operator can deliver compliant IoT connectivity in every country. MNOs must therefore work within trusted partner groups to enable cross-localisation, allowing devices to switch to local profiles managed within cooperative frameworks. This reduces latency, satisfies local regulations, and preserves control over network utilisation. Collaboration also extends reach into new markets and supports reciprocal inbound connections that monetise network assets.
Support orchestration and transparency
Enterprises now expect unified management across networks, technologies, and geographies. MNOs must expose standardised APIs and integrate with “Single Pane of Glass” abstraction layers that allow customers or third-party orchestrators to control connectivity end-to-end. Delivering this visibility, spanning provisioning, performance, and policy, will be a key differentiator as enterprises demand simplicity in managing globally dispersed devices.
Expand beyond connectivity into enablement services
As connectivity margins shrink, MNOs must build value through adjacent services. This includes pre-sales and post-sales consulting, application support, and solution design. By guiding enterprises through compliance, device onboarding, and lifecycle management, MNOs can capture more of the IoT value chain while cementing long-term customer relationships.
Position networks for AI and 5G innovation
The next generation of IoT applications will depend on low-latency, programmable network features such as slicing and edge exposure. MNOs should prioritise upgrading to 5G Standalone cores and implementing AI-aware orchestration layers capable of dynamically allocating network resources. These upgrades are not only technical necessities but strategic enablers of intelligent automation, robotics, and industrial IoT use cases.
Differences for national operators
For MNOs that operate within a single (or handful) of countries, the priorities differ slightly. They must monetise their networks as destinations for inbound IoT connections, supporting localisation for foreign MNOs and MVNOs. This requires robust interconnection policies, quality-of-service controls, and clear frameworks for managing access. Supporting a diverse ecosystem of MVNOs will expand reach and increase traffic volumes without direct retail investment.
What MVNOs must do
For MVNOs, the challenge is existential. Traditional models based on sponsored roaming and simple resale no longer meet the technical and regulatory needs of global IoT deployments. To remain relevant, MVNOs must evolve from intermediaries into orchestrators, entities that manage connectivity, eSIM profiles, and compliance dynamically across multiple host networks.
Gain control of the core
MVNOs must secure greater autonomy over core network functions, enabling them to manage policy, quality of service, and security independently of their host MNOs. This control supports the localisation of traffic, compliance with data sovereignty rules, and low-latency performance for enterprise applications. Direct access to local cloud infrastructure is essential to achieving this balance of control and flexibility.
Diversify carrier relationships and technology support
The days of relying on one or two global roaming partners are over. MVNOs must build broader portfolios of direct interconnects and local agreements that span LTE-M, NB-IoT, 5G, and satellite networks. Supporting multiple technologies ensures continuity as legacy networks are retired and avoids dependency on specific operators or regions.
Adopt the eSIM Orchestrator model
A growing number of MVNOs will evolve into eSIM Orchestrators, managing remote SIM provisioning, policy enforcement, and profile switching on behalf of enterprises. This role allows MVNOs to deliver flexibility without owning extensive network assets. The focus shifts from reselling connectivity to managing relationships, dataflows, and orchestration logic across multiple MNOs and regions.
Prioritise software, integration, and compliance
Success in orchestration depends on advanced software capabilities. MVNOs need platforms that integrate with multiple Connectivity Management Platforms (CMPs), expose secure APIs, and provide visibility into device behaviour. They must ensure compliance with data-handling regulations in every region they serve, including rules on residency, security, and lawful interception. Building this compliance assurance into their orchestration platforms will be a major source of differentiation.
Blend reselling and orchestration for flexibility
Not every customer will be ready for a pure orchestration model. MVNOs should therefore adopt hybrid approaches that combine direct connectivity resale with orchestration services. This allows them to serve enterprises at different stages of maturity while developing recurring revenue from software and managed services.
A new model for IoT connectivity
The IoT connectivity market in 2025 is defined by localisation, intelligence, and collaboration. MNOs and MVNOs are converging toward a shared goal: providing compliant, performance-optimised, and AI-ready connectivity at scale. MNOs bring infrastructure and regulatory authority; MVNOs bring agility, software innovation, and orchestration expertise. The winning strategies will blend both perspectives, creating federated ecosystems that allow IoT to operate seamlessly across networks, borders, and regulatory frameworks.
Learn more
This article provides a summary of some of the key points within the report. It will be further expanded upon during a Virtual Briefing on 23rd October. Both the Position Paper and the Virtual Briefing are sponsored by floLIVE.
The free Position Paper ‘Beyond Coverage: Building Smarter, Compliant, AI-Ready IoT Networks’ examines key changes occurring in the provision of cellular-based IoT connectivity, including the growing demand for data to feed AI, the changing regulatory landscape, and evolving technology, including eSIM, network technology fragmentation, and the evolving platform landscape. It goes on to explore the impact these changes will have on the landscape for IoT connectivity provision, and how MNOs and MVNOs should adapt their strategies to address the opportunity.
In addition to the published Position Paper, on the 23rd October, Transforma Insights and floLIVE will deliver a Virtual Briefing ‘Compliant, localised and AI-ready: how MNOs and MVNOs must evolve their IoT connectivity strategies’ exploring the ways in which MNOs and MVNOs addressing the IoT market should evolve their offerings to better reflect the market evolution, whether that be by streamlining operations, establishing new partnership models, addressing compliance challenges, delivering optimised global connectivity, or many other elements of an evolved IoT strategy.
Matt Hatton, Founding Partner, Transforma Insights
