Recent IoT investments show telecoms operators (gradually) moving up the value chain

analysys mason

In mid-2014, when Analysys Mason reviewed more than 100 Internet of Things (IoT) investments and M&A deals, only 5 involved telecoms operators (and 4 of these were Vodafone investments). At the time, we discussed the gap between telecoms operators’ stated ambition to move up the value chain and their actions (or lack of them).

In 2015, however, the picture is changing. In the first half of 2015 alone, at least eight telecoms operators have made one or more investments in an IoT company.

Investments in SIGFOX by NTT DoCoMo, SK Telecom and Telefónica look like defensive moves to shore up future connectivity revenue. All other investments (and arguably even the SIGFOX deal) look like an attempt to branch out from commodity connectivity revenues.

The investments made by telecoms operators are hard to classify, with no obvious common theme emerging. Investments have been made in horizontal capabilities (e.g. investments in Actility by KPN, Orange and Swisscom and Springworks, by TeliaSonera are essentially about gaining capabilities that can be applied to multiple vertical markets). Investments by Telstra (in health), Orange (in fleet management) and before them by Vodafone and Verizon (in automotive) illustrate the diversity of opinion over what position to take in the value chain, or which verticals to focus on.

According to some estimates, over US$10 billion has been invested in IoT companies or acquisitions in 2015 (though some of these estimates include deals in which IoT was only a small part). Telecoms operator investment in IoT over the same period was well under US$100 million. Only Vodafone, Verizon and Telstra have made significant bets on IoT.

 

tom rebbeckThe extent of telecoms operators’ involvement in IoT cannot be judged purely on the basis of their M&A or investment activity: other activity, such as partnerships and internal developments, also need to be considered. However, with the exception of a handful of telecoms operators, the lack of investment activity indicates an unwillingness to commit to strategies that generate more than connectivity revenues. The recent investments by telecoms operators are encouraging indications, but more are needed for operators to make significant moves along the value chain.

By Tom Rebbeck

Tom Rebbeck

Tom Rebbeck

RECENT ARTICLES

Itron improves Temetra platform for water utilities in Australia and New Zealand

Posted on: May 2, 2024

Itron expands the capabilities of its Temetra platform in Australia and New Zealand to include NB-IoT communications, enabling digital transformation for water utilities. Temetra’s comprehensive offering includes metre data processing,

Read more

SES to acquire Intelsat in deal aimed at creating a multi-orbit operator

Posted on: May 1, 2024

SES and Intelsat have agreed that SES will acquire Intelsat by purchasing 100 percent of the equity of Intelsat Holdings S.a.r.l. for a cash amount of US$3.1 billion (€2.8 billion)

Read more
FEATURED IoT STORIES

What is IoT? A Beginner’s Guide

Posted on: April 5, 2023

What is IoT? IoT, or the Internet of Things, refers to the connection of everyday objects, or “things,” to the internet, allowing them to collect, transmit, and share data. This

Read more

The IoT Adoption Boom – Everything You Need to Know

Posted on: September 28, 2022

In an age when we seem to go through technology boom after technology boom, it’s hard to imagine one sticking out. However, IoT adoption, or the Internet of Things adoption,

Read more

9 IoT applications that will change everything

Posted on: September 1, 2021

Whether you are a future-minded CEO, tech-driven CEO or IT leader, you’ve come across the term IoT before. It’s often used alongside superlatives regarding how it will revolutionize the way

Read more

Which IoT Platform 2021? IoT Now Enterprise Buyers’ Guide

Posted on: August 30, 2021

There are several different parts in a complete IoT solution, all of which must work together to get the result needed, write IoT Now Enterprise Buyers’ Guide – Which IoT

Read more

CAT-M1 vs NB-IoT – examining the real differences

Posted on: June 21, 2021

As industry players look to provide the next generation of IoT connectivity, two different standards have emerged under release 13 of 3GPP – CAT-M1 and NB-IoT.

Read more

IoT and home automation: What does the future hold?

Posted on: June 10, 2020

Once a dream, home automation using iot is slowly but steadily becoming a part of daily lives around the world. In fact, it is believed that the global market for

Read more

5 challenges still facing the Internet of Things

Posted on: June 3, 2020

The Internet of Things (IoT) has quickly become a huge part of how people live, communicate and do business. All around the world, web-enabled devices are turning our world into

Read more