Internet of things (IoT) is unpredictably transforming the way humans communicate, educate, entertain, consume and conduct businesses. Gartner had forecasted that there were 8.4 billion IoT devices in use during 2017. And according to Ericsson, the number of IoT devices globally will grow to 20 billion by 2023.
IoT is known as the heart of digital transformation, and opens new opportunities for every industry, including the information and communication technology (ICT) providers.
Ericsson, the leading networking and telecommunication company, recently surveyed 20 leading telecom service providers worldwide to gain insights on how they identified multiple paths within IoT landscape.
The report, titled Exploring IoT Strategies, revealed an IoT positioning framework that captures the roles and sub-roles of service providers in the IoT value chain.
- Majority of Telcos not having a well-defined IoT strategy
According to the report, 70% of the Telcos entering the IoT market had no well-defined strategy. Revenue growth was the most common priority for a majority of Telcos, and they were testing alternative roles within IoT value chain to achieve that growth.
- 80% of Telcos planning to create value beyond connectivity
Service provider roles were categorized into Network Provider, Connectivity Provider, Service Enabler and Service Creator. The respondents cited network provider and connectivity provider roles as the foundational roles, that drive most of IoT revenues.
Although 60% of the respondents were pursuing the four key roles only, while 80% of them were also planning to create value beyond connectivity. They said that additional value could be created by providing more services through the sub-roles within the four roles, and by providing end-to-end solutions as service creators or service enablers.
The sub-roles included supply, integrate, operate and transform. Network providers can provide integration of cellular and non-cellular services (integrate), while connectivity providers can provide IoT device lifecycle management (operate).
- Cellular IoT and 5G technologies can be game changer
70% of the telecom service providers were focusing on cellular IoT. The respondents believed that cellular IoT can improve battery life, reduce device costs, and enable new use cases.
- Telcos focusing on B2B market
On the end-user segment, the service providers focused on B2B market, since the enterprises generate most of the total market spend. Nonetheless, the report also highlighted that B2B2C was also an emerging way to reach consumers, and will be a significant aspect for Telcos moving forward in IoT business.
As per the report, connected cars, smart cities, industrial automation, and fleets and logistics were the most common sectors targeted by respondents.
“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, Head of IoT, Ericsson. “Regarding IoT as a new type of business, service providers are investing in new technologies and establishing new business models for revenue sharing and increased use of indirect channels. They are also creating new delivery models for as-a-service and online services and driving innovation with partners and customers.”
Image source: Ericsson