Most telcos have now accepted that they need to offer more than connectivity if they want to move up the IoT value chain. This report presents a four-step framework to help telcos define a successful IoT strategy.
The internet of things (IoT) will revolutionise all industries, not just TMT. In addition to the benefits of connecting previously unconnected objects to monitor and control them, the data that IoT will make available could play a pivotal role in other major technological developments, such as big data analytics and autonomous vehicles.
It seems logical that, because IoT relies on connectivity, this will be a new growth opportunity for telcos. And indeed, as anyone who has attended MWC in the last few years can testify, most if not all major telcos are providing some kind of IoT service.
But IoT is not a quick win for telcos. The value of IoT connectivity is only a small portion of the total estimated value of the IoT ecosystem, and therefore telcos seeking to grow greater value in this area are actively moving into other layers, such as platforms and vertical end solutions.
Figure 1: Telcos are moving beyond IoT connectivity
Source: STL Partners
Although telco IoT strategies have evolved significantly over the past five years, this is a complicated and competitive area that people are still figuring out how to monetise. To help our clients overcome this challenge we are publishing a series of reports and best practice case studies over the next 12 months designed to help individual operators define their approach to IoT according to their size, market position, geographic footprint and other key characteristics such as appetite for innovation.
This report is the first in this series. The findings it presents are based upon primary and secondary research conducted between May and September 2017 which included:
- A series of anonymous interviews with operators, vendors and other key players in the IoT ecosystem
- A brainstorming session held with senior members from telco strategy teams at our European event in June 2017
- An online survey about telcos’ role in IoT, which ran from May to June 2017
- Executive Summary
- A four-step process to monetise IoT
- Step 1: Look beyond connected device forecasts
- Step 2: Map out your IoT strategy
- Step 3: Be brave and commit
- Step 4: Develop horizontal capabilities to serve your non-core verticals
- Result: The T-shaped IoT business model
- IoT data is a secondary opportunity
- Figure 1: Telcos are moving beyond IoT connectivity
- Figure 2: IoT verticals and use-cases
- Figure 3: Four possible roles within the IoT ecosystem
- Figure 4: Telcos can play different roles in different verticals
- Figure 5: IoT connectivity can be simplified into four broad categories
- Figure 6: As the IoT field matures, use-cases become more complex
- Figure 7: The technical components of an IoT platform
- Figure 8: The T-shaped IoT business model