It’s predicted that by 2025 there will be in the region of 75 to 80 billion IoT devices connected worldwide. The prolific growth reflects the vast possibilities that IoT technologies boast and the ability to connect almost anything to the internet.
It doesn’t matter if the device uses power or not, or whether it’s static or moving, if it’s a ‘thing’ that needs monitoring or analysing, it can bring about a fundamental change to how we live and work. That’s why the predicted growth spans almost every sector, from automotive and utilities, through supply chain and agriculture to healthcare.
More recently the appetite to adopt IoT has been spurred on by 5G investment and global network roll outs. This has helped move the conversation from hypothetical use cases to real ones. Businesses can clearly see that IoT can streamline operations, cut costs, provide hard to get insight and deliver enhanced customer experiences. Our work with Worcester Bosch is a good illustration of how private networks can be applied on the factory floor to make working environments safer and production lines more efficient.
Interestingly, this step change has provoked a change in strategy among IoT service providers (SPs) and resellers. Many are changing their business model and making a move for independence from the operator. The ultimate goal? To become MVNOs in their own right.
This growth story is why IoT is important to our industry. For the first time, we have an industry that is not limited to the number of people in the world. Share and growth is not dependent on the total number of mobile subscribers. There really are no limits on the number of ‘things’ that can be connected.
However, the absence of market limitations puts pressure on providers to meet demand effectively. That’s why wholesale partnerships are going to be so crucial. Put simply, if the parties involved in the ecosystem go it alone, they will fail to maximise value and share. MVNOs are the answer.
MVNOs are nimble. They can react to the market quickly thanks to the core infrastructure they have at their disposal. With the ability to control and develop their own services, MVNOs can make adjustments to tariffs and propositions quickly and ensure they are always pursuing market differentiation for any target vertical.
That’s critical. With so many markets emerging, having the flexibility to build packages that perfectly match the use cases is going to be paramount. It’s not just about differentiation on price either – service or security models can and will be just as important.
Bottom line is that everything from traffic shaping, policy control, security and routing is in the gift of MVNOs. Fundamentally, resellers and SPs have realised that if they can own the proposition, they can react to and influence the value chain far sooner. In effect, they can develop more specialised and tailored solutions before the competition and ultimately maximise their revenue and potential market share.
Long Term Partnerships
Historically, IoT providers have gained wholesale access to networks through the use of roaming agreements. It’s been a way to ensure coverage. However, roaming agreements are designed to support transient roamers and not SIMs that are permanently residing in a particular country.
This ‘back door’ is being closed by MNOs. As a result, IoT providers will need to change their model to one where they proactively work and partner with operators to grow - IoT success rests on great coverage all the time, there is just too much risk not to have solid coverage 24x7.
It will be the operators that have invested in their network, both 4G and 5G that will attract the widest and most exciting range of IoT providers keen to become MVNOs. In our case, access to the same secure, reliable network that the Emergency Services Network uses is a big draw for MVNOs. So too is our commitment to invest billions in the network and fill more than 12,000 square kilometres of mobile ‘not spots’. In fact, IoT MVNO Wireless Logic chose us as a partner because the EE network is reliable, secure and offers an extensive footprint.
eSIM driving change
Advances in technology such as eSIM are considered huge enablers as well. They too act as a means for MVNOs to move up the value chain. For instance, eSIMs can be integrated into products at the point of manufacture and switched on when in market. This presents an ideal way to move into segments that would otherwise be out of reach.
Is this trend ‘a la mode’ or will it be sustained?
I’m certain it’s not a flash in the pan. More and more service providers are coming forward and building MVNO commercial models. And they are doing it at pace, striking multiple MVNO arrangements around the world so they can become the lynchpin in global IoT ecosystems, such as those used by automotive OEMs.
Transatel, Cubic, Wireless Logic and Tata are great examples of this. They have launched or are launching full MVNOs recognising they can drive greater value by creating more bespoke solutions.
A desire to really deliver on customer needs spurs them on. It’s across the board too from low bandwidth solutions to higher consumption models like advertising billboards and train Wi-Fi.
Of course, it’s not just added value that these service providers are tapping into. They are also exploiting the foundations of having a solid operator partnership in place.
Lift the lid on any one of these new MVNOs and there’s a common thread running through. They have sought out five specifics: 1. Reliable and wide coverage network connectivity, 2. innovative commercial terms 3. market parity on network innovation, 4. working relationships that offer flexibility both in terms of being reactive to market forces and proactive, and finally 5. network partners that are willing wholesalers and have a clear and well-articulated strategy.
As a result, they can become global leaders in their own right. . This should provide every reseller and service provider with food for thought and the impetus for change.
Look out for some surprise announcements
MVNO World Congress may not have happened this year but that doesn’t mean the world will stop. Far from it. When we do meet next summer, we will be talking about those service providers that have taken advantage of the MVNO model and are on the path to making the vision of everything from smart cities, through smart health to smart driving a reality.
Who will those service providers be? That’s the big question and in the hands of the reseller and service provider community. I know that the savvy ones are already weighing up their options and getting ready to make their move. How quickly they will deliver their strategy remains to be seen, but there seems to be a sense of urgency among those we are speaking to.
They tell us they want to avoid being marginalised and disintermediated by the networks that sell direct. They know if they move now, they will have first mover advantage. Expect to see some new exciting MVNOs launch in the coming months and expect some surprises among them.