Operators need to look beyond connectivity to grab share of IoT revenue pie, says GSMA

The GSMA has sounded a warning to operators: connectivity will only comprise 5% of the total IoT revenue opportunity by 2025, so more revenue streams are needed.

New data from GSMA Intelligence suggests that the global IoT market will be worth $1.1 trillion in revenue by 2025 – this is because the market has shifted from connectivity to platforms, applications and services.

Owing to the growth in the Industrial IoT, there will be more than 25 billion IoT connections (both cellular and non-cellular) present by 2025. Moreover, the APAC region is predicted to be the largest global IoT region in terms of both connections and revenue.

Though connectivity revenue is expected to grow over the aforementioned period, it will account for only 5% of the total IoT revenue. This will generate a need for operators to expand their capabilities beyond connectivity in order to cover a bigger share of the market value. This is the issue that is already being taken care by a number of operators who are creating dedicated IoT business units and service lines.

In the meantime, the platforms, applications and services segment will continue to grow as a share of overall IoT revenue by bagging 68% of the total by 2025. System integration, managed services and consulting are some of the IoT professional services that is likely to account for the remaining 27% share of total IoT revenue by 2025.

Earlier this month, another report from the GSMA explored how mobile IoT technologies will prove to be an essential part of 5G. It said that the mobile IoT technologies are usually Low-Power, Wide Area (LPWA) and include NB-IoT and LTE-M. These technologies are central to the development of ‘massive IoT’ that the GSMA sees as one of 5G’s three core use cases — alongside critical communications, and enhanced broadband. Mobile IoT networks will support deployments of smart meters, smart logistics, and smart environmental monitoring. The 3GPP’s standards will ensure support for such low cost and data use applications that require long battery lives and the ability to operate in remote and hard-to-reach locations.

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