Ericsson assesses how telecom service providers can plot IoT revenue streams
Are telecom providers making the most out of the Internet of Things (IoT) opportunity? According to a new research report from Ericsson, service providers see the clear potential, but gaps remain which need to be filled.
The study, titled ‘Exploring IoT Strategies’, analysed 10 of the 30 leading mobile broadband service providers, as well as 10 IoT leaders, and has put together a framework which can capture telecom providers’ paths to IoT revenue. The broadband providers polled said they believed cellular IoT and emerging 5G technologies would be a ‘game-changer’ in IoT.
The report identifies four service provider role categories; network provider, connectivity provider, service enabler, and service creator. As the study outlines (below), service provider strategies are usually outlined as being offering-led, market-led, and quality-led. Wherever the organisation is, new capabilities – in the ‘service creator’ bracket – can appear.
Yet it does not work as smoothly as that. Offering-led operators, ‘typically challengers with slim organisations and limited resources’, as the report puts it, will naturally take on the network provider role, while movements further up the value chain could cause problems. At the other end of the scale, quality-led operators are those with solid capabilities across the board, and can integrate existing solutions into IoT initiatives.
70% of those interviewed said they had no well-defined strategy to capture IoT revenue – so Ericsson has aimed to help by putting together an IoT positioning framework. Taking the four roles previously mentioned, operators can then place these alongside four sub-roles to pick their spot and attack the market. Organisations can either supply – delivering cellular IoT networks, platforms or applications – govern the deployment-to-operation lifecycle of networks, manage and provide services for multiple networks, or focus on transforming customers’ business models and operations.
Four in five respondents said they would look to move up the value chain to service enablement or service creation in future.
“The report confirms the importance of IoT to the current and future business of leading service providers, no matter where they operate in the world,” said Jeff Travers, Ericsson head of IoT in a statement.
“Regarding IoT as a new type of business, service providers are investing in new technologies and establishing new business models for revenues sharing and increased use of indirect channels,” Travers added. “They are also creating new deliver models for ‘as a service’ and online services and driving innovation with partners and customers.”
You can read the full report here (registration required).