Simplicity the key to Growth in Mobile IoT say Operators

Mobile IoT is now a commercial reality. 38 operators globally offer solutions through LPWA in licensed spectrum; there are now 15 commercially-launched networks, and 26 Mobile IoT labs, where developers can test their innovations, are now in operation across the world.  “One of the great advantages of Mobile IoT is that operators can simply add Mobile IoT to their existing cell sites,” explains IoT Programme head Graham Trickey; “This is not about starting from scratch – this is something that can be done quite quickly, and I think operators in the US have shown that.”  There is no doubt however that we remain at the beginning of the journey, with the job ahead for the industry being to realise the vast potential of this now ready technology.  Delegates therefore gathered at the 5th Global Mobile IoT Summit in San Francisco this week to share thoughts on progress so far, and plans to drive forward growth in the years ahead.
$1.8 Trillion Revenue Opportunity for IoT by 2026
Mr Trickey opened the session with an overview of growth opportunities, which are set to rise dramatically over the coming years. “There’s a market opportunity of about $1.8 trillion – our job is to make sure the IoT can grow to meet that opportunity, and our focus this year has been to bring it to the marketplace as a commercial reality.”  As we look ahead to the period ending 2026, “of the six billion connected devices forecast we can expect over sixty-four per cent to use LPWA connections.”  Achieving this however depends, according to Mr Trickey, on success in the key tasks ahead: in particular, maximising the security of Mobile IoT connections will be vital, as will harmonization of the big data generated.  How, for instance, can that data be harmonised with publicly available data, and how can analytics best be used to maximise the value of that data?  And, as members of our expert operator panel asked, how can this be used to fund the next big goal in IoT – simplicity?
Making IoT Deployment and Usage a Consistent Experience is Key
Ankur Bhan, Global Head of Nokia’s Worldwide IoT Network Grid, reminded us that “While there are many exciting new use cases to discuss, (IoT) still only accounts for a very narrow slice of the overall value chain; between one and three per cent of operator revenues at present come from IoT connectivity.” So how do we drive uptake to the next level?  Mr Bhan emphasised that the ecosystem itself needs to scale. “Perhaps most importantly, as we know, the ecosystem is still a bit fragmented. While focus in the industry so far has understandably been on coverage and security, there needs to be a shift to areas such as battery life, longevity and the ruggedness of devices.”  Essentially, deployability can only go as far as reliability: the ecosystem must expand in such a way that results in devices performing well across a range of different conditions: “Most enterprises would prefer to deploy over a hundred markets than one, so making that possible in a consistent way is going to be really critical.” Making deployment and usage a consistent and straightforward experience, for the industry and market alike, will be key to an efficient market in IoT solutions.
“IoT Technologies are Ready Now”
Dr. Georges Karam, President and CEO of Sequans Communications, was emphatic on the opportunities presented by the emerging data landscape. “For the first time in IoT, we are able to observe the whole, and almost in real time. This is the path I see to increasing profitability: where you can see all the parts making up the whole, and generate data from them, you can be more efficient, create better services, and ultimately generate more revenue.”  The technology is now truly here, and available upon relatively straightforward conversion of existing infrastructure; where initiatives a few years ago were limited by technology not designed for IoT solutions, such as 2G, the advent of LTE-M and NB-IoT standards has made low-cost, extended coverage an immediate option.”  Operators are alive to the opportunities here: “If you look at where carriers are with implementation, while they’re at different stages, I’m 100% confident that by mid-2018 all carriers worldwide will be offering these solutions.”
Operators Panel in the 5th Global Mobile IoT Summit
The main event of the session was of course hearing from the operators themselves. Cameron Coursey, Vice President for Product Development at AT&T, opened the discussion.  “We see Mobile IoT technology as being able to break down barriers and move into market spaces that, as an industry, we haven’t been able to before.  Connectivity is like oxygen. When you don’t have it, you miss it.  But it’s foundational – it’s not everything.” A key challenge AT&T see, therefore, is helping the market to identify and understand specific needs, then tailoring the degree of connectivity required.  “It can certainly be overkill if you’re using a big pipe of connectivity when all you need is a trickle,” Mr Coursey explained. With the manifold use cases available through IoT solutions, and the enormous variety of demands these will place on networks, growth will best be optimized where customers are able to assess accurately their needs, and purchase only what they require.  Consumer satisfaction will therefore be optimised – as they pay the best possible price – while network capacity during rollout will be maximised, and with it accommodation of as many new customers as possible.  Creating this efficient market out of initial uncertainty is among the first priorities of AT&T going forward. Once this connectivity has been optimized, predicts IoT General Manager at Sprint Mohamad Nasser, operators’ focus will shift to two subsequent priorities: making the network more robust and simpler to use, and what value can be created from using analytics with the data generated.
This was echoed and built upon by Mark Bartolomeo, Vice President, Connected Solutions at Verizon, who explained that simplicity will be key to accommodating the proportional shift away from provisioning complex, personal devices. “Carriers have focused until now on connecting a relatively small number of devices with a very high degree of throughput, such as broadband devices.” Mr Bartolomeo explained. “Going forward we’ll see the inverse occurring: we’re expecting to connect an enormous number of devices, each placing a very low load onto the network, and that’s where the growth will come from.”  For that to work, however, two things will need to happen: “It will need to be much simpler to connect, and much simpler to manage connections. We need a very seamless, low-friction approach to provisioning and managing, pursuit of which we’re seeing from carriers now with all the investment in IoT platforms.” Also key to driving growth will be the opportunities arising from driving down the cost both of units and connectivity. Where IoT today largely relates to management of high-value assets, due to the present cost of units and connectivity, as these are brought down carriers will be able to connect much lower-value assets. “As carriers build out their IoT core, we’ll be able to strip out many of the third-party licensing costs associated with managing the complexities of items such as smartphones, which will yield further major cost efficiencies, which translates into expanding market interest.”
So how can this enhanced simplicity be achieved?  Among the clearest warnings over barriers to this came from Mark Bartolomeo, who suggested that connected device targets over the next decade are unlikely to be met through retrofitting. “If you want to connect all these devices, and have to go around selling companies this connectivity, that model just won’t get you there – an important part of the ecosystem is the OEMs shipping ready to connect.  So we’re seeing a lot of activity among manufacturers rewriting specifications from wi-fi to wide-area and so on, and that’ll need to be the dominant model in the future.”  Mohammed Nasser agreed with this assessment, adding that simplicity can also be enhanced by “taking IoT and making it a service.  Offering fleet management, asset tracking solutions, and bundling applications and hardware. This is both a challenge and an opportunity for carriers – if you’re connecting billions of devices, how do perform life-cycle management, how do you keep them up to date, and so on.”
Cameron Coursey was keen to emphasise that simplification would be a weighty challenge to occupy the immediate future: “I’m very conscious that if it looks simple from the outside, it’s very complicated on the inside.”  While no-one in the industry would disagree, the prevailing sense throughout the session was a desire to relish and meet this challenge.  There was a pleasing consensus that – if the cost of investment in wholesale simplification connectivity can be offset by strategic use of data analytics, and the streamlining of associated costs as unit prices come down – the simplification shift can be achieved.