The reason why enterprise B2B markets matter so much to today’s mobile operators is not because they see huge potential in...
IoT
The reason why enterprise B2B markets matter so much to today’s mobile operators is not because they see huge potential in replicating consumer phone packages for business users. It’s because of the Internet of Things (IoT).
Modern businesses are not just looking for connectivity solutions for their telecoms and IT anymore, so staff can work from home and stay in touch as they travel. Increasingly, equipment, devices and appliances of all types are being turned into data-producing units and added to networks, creating ‘smart’ systems that are revolutionising business intelligence, automation, process efficiency and productivity.
Increasingly, equipment, devices and appliances of all types are being turned into data-producing units and added to networks, creating ‘smart’ systems that are revolutionising business intelligence, automation, process efficiency and productivity.
Given the sheer number of end points involved, and the geographical dispersal of many IoT networks, the go-to technology for connecting it all together is mobile.
Providing machine-to-machine data connections for everything from industrial equipment to ‘smart’ home appliances is such a different proposition to traditional consumer mobile that it has even resulted in the development of special low-power wide area (LPWA) networking technologies such as narrowband IoT (NB-IoT) and LTE-M.
Low power means low per unit prices, but modern networked industrial, commercial and public infrastructure systems generate exceptionally high traffic volumes. That in itself creates major opportunities for mobile operators and MVNOs, with even greater value to be gained from end-to-end ancillary business services.
The APAC region is estimated to account for around 60% of global licensed LPWA connections, and is expected to top one billion by 2025. At the heart of it all sits China, which according to the GSMA accounts for nearly two thirds of the world’s total IoT cellular connections.
The applications M2M cellular connectivity is being put to are extremely diverse - examples in China cover everything from connected manhole covers that monitor gases and underground assets and smart fire hydrant water pressure sensors to intelligent fire alarm systems and electric ‘city bike’ management systems. In Japan, MVNOs are involved in offering services such as remote vending machine management, security surveillance and patient monitoring in healthcare.
MVNOs face two main challenges gaining a stake in what is undoubtedly a highly lucrative opportunity across the APAC region.
The first of the challenges faced, is that MNOs are currently making a big play of flexing their muscles in the IoT space, making it difficult for smaller virtual operators to find elbow room.
For example, the GSMA this year outlined IoT projects involving major carriers from Thailand, Japan, Singapore, Malaysia, and Indonesia. The projects covered things like temperature monitoring systems for perishable goods in transport, automated environmental data gathering in agriculture, digital smart access systems and connected litter bins.
It is notable how many of these are listed as pilot projects. You can see in them a degree of MNOs testing the waters with IoT, and also a touch of PR. When it comes to commercial roll-outs, given the size and breadth of their operations, MNOs just don’t have the resources to make involvement in detailed projects like these at a granular level commercially viable.
That is where the ability of MVNOs to focus sharply on specific market niches will come into their own. Long term, we’re likely to see IoT MVNOs evolve to provide highly specialised services to specific market sectors, with MNOs seeking partnerships with virtual operators to give them the reach they need into hundreds of different markets clamouring for IoT services.
The second challenge MVNOs face in capitalising on IoT in the Asia-Pacific region leads on from this - how they become go-to technical specialists in new operational areas considerably different to the traditional consumer markets.
While it’s likely we will see some existing MVNOs migrate into IoT markets, it is also to be expected that IoT will draw new players into the market. Examples of the latter would be the likes of IT device manufacturers Lenovo and Xiaomi gaining MVNO licenses in China to support their mobile IoT management platforms.
To date, the APAC region is probably behind Europe and North America in the emergence of ‘platform’ IoT MVNOs, which focus on end-to-end IoT service management on a cloud-like ‘as-a-service’ basis. The biggest news in the region on this front over the past 12 months has been the full acquisition of Dutch MVNE and IoT platform specialist Teleena by Tata Communications. Teleena’s platform had provided the basis for Tata’s own MOVE IoT product, and the acquisition is viewed as a bid by Tata to spearhead growth in the global IoT market by taking on Teleena’s technology portfolio and the expertise of its staff.