Telecom network operators globally have started gaining significantly — in both revenue and deals — after making investment in IoT (Internet of Things).
Revenue from IoT business will be close to $1 billion for the American telecom giant Verizon Wireless in 2016 considering its IoT revenue in Q1 2016.
Verizon Wireless already booked approximately $195 million (25 percent) revenue from IoT business in the first quarter of 2016.
AT&T, the main rival of Verizon, in April 2016, said it added 2.3 million wireless connections in the first quarter of 2016 — driven by connected devices.
IT market research agency Gartner forecasts that number of connected things will grow 30 percent to 6.4 billion in 2016. A recent report in Markets and Markets says IoT connections with satellite connectivity will grow 9.8 percent per year over the next four years.
These short-term predictions on the global IoT industry are significant because 5G technology, one of the growth drivers, will further accelerate the IoT boom once it takes off in later part of 2020 and beyond.
Telecoms’ IoT deals
AT&T IoT technology will assist Otis to aggregate data from cell networks and connect to a new cloud environment. AT&T’s Global SIM card and IoT Services, such as Control Center, M2X and Flow Designer, will allow Otis to access real-time equipment performance data.
“We will develop new responsive service solutions that give autonomy to Otis employees and more control to Otis customers over their equipment and buildings by leveraging the AT&T IoT technology to harness data generated by 2 million elevators currently,” said said Otis President Philippe Delpech.
Telefonica Business Solutions will support ORES, a main player for electricity distribution networks and natural gas in Belgium, for a Smart Metering pilot project conducted with the City of Charleroi (Belgium) and the SWDE.
Telefonica will provide Smart m2m solution to manage and control IoT communications. Telefonica has more than 1,500 customers on Smart m2m, its IoT platform., according to Anne Perrin, CEO of Telefonica Business Solutions France.
Vodafone achieved 5.8 percent increase in Global Enterprise business and 27.3 percent in machine-to-machine (M2M) business. Vodafone’s M2M services are now available in 29 markets.
Deutsche Telekom has been recognized as a leader in Gartner’s Magic Quadrant for Managed M2M Services.
“The recognition is especially exciting for us as we believe it acknowledges our aim to be the best choice for our customers to connect things. An example for our services is the “Cloud of Things” platform which allows our customers to easily connect and manage their assets worldwide,” said Alexander Lautz, senior vice president, Machine-to-Machine, Deutsche Telekom.
Cisco acquired IoT platform provider Jasper in February for over $1.4 billion. Nokia Growth Partners has raised a $350 million IoT-focused investment fund. Reports convey that other IoT startups are piling up tens of millions in venture funding.
Both Verizon and AT&T, have been aggressively pushing their IoT streams and both companies saw 5 percent declines in wireless service revenues in the fourth quarter of 2015, and hence are looking up to IoT as a growth booster.
IoT technology growth
TBR has reported that commercial IoT opportunities created a 14.8 percent growth in the fourth quarter of 2015, based on research done upon 21 companies tracked in its regular Commercial IoT Benchmark report.
ABI Research forecasts LTE M2M cellular modules will grow to over 50 percent of total module shipments by 2021.
Verizon is the most aggressive with LTE as they are more reliant on LTE for competitive advantage than are the GSM operators of AT&T and T-Mobile. Of the developed world markets, Europe’s LTE M2M module shipment share will be the lowest. 2G modules are still preferred due to high network coverage and some operators are looking to extend 2G with the EC-GSM standard.
It should also be mentioned that IT services and ICT infrastructure, have achieved a 51.4 percent growth rate in revenue for the fourth quarter of 2015, having benefited from the increasing capacity requirements created by the huge streams of IoT data that is being generated.
All network service providers depend heavily on large companies such as IBM, Microsoft, Cisco, Intel, Ericsson and GE to power the entire networking and IoT ecosystem, from hardware, like routers and servers, to software and cloud services.
To add to it companies are increasingly using IoT data to gain insights into markets which aid them to create and market their developing services. This has changed from the previous stand on IoT where the focus was primarily on collecting and using data for the betterment of the efficiency of the corporation.
Also, other factors are expected to push IoT growth, including new government regulations with drug monitoring, highway and traffic regulations, and agriculture being the prominent domains where it will be applied.
By 2020, according to Gartner, more than 25 percent of identified attacks in enterprises will involve IoT though IoT will account for less than 10 percent of IT security budgets, with half of all IoT implementations implementing some form of cloud-based security service. The market for IoT security products is entirely dependent on IoT adoption by the consumer and industry sectors.
The Internet of Things technologies can be complex and fragmented, but there is a rising number of projects coming up within smart cities, farms and at wide range of businesses and industries.
All in all, we can conclude that the Internet of Things is the future even with the obstacles abound. The amount of activity happening worldwide from both startups and large companies is huge, and all hurdles in the technology are believed to be cleared in the development phase.
Vina Krishnan
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