Research Vice President, WW Telecommunications Services
Research Manager, Mobility
Most enterprises have initiated their digital transformation journeys, and holistic Internet of Things (IoT) deployments are often part of the process. Many organizations are looking to IoT technologies for cost savings, enhanced worker productivity and safety, and a positive environmental impact, among other benefits. A well-designed IoT deployment can substantially reduce operational costs by minimizing labor costs and improving process efficiency. In addition, IoT projects can drive new business revenue by enhancing customer experiences and allowing businesses to speed up decision making.
All IoT projects require hardware, software, connectivity, and services. Resilient connectivity is particularly important as it allows the efficient
movement of data between “things.” As enterprises look to IoT to transform business and operational processes, most will turn to IoT cellular connectivity for their IoT deployments because of cellular technology’s ubiquitous coverage, affordability, security, and resiliency. Mobile network operators (MNOs), IoT mobile virtual network operators (MVNOs), and other third-party providers offer IoT cellular connectivity services.
In addition, the market is experiencing the intersection of private 4G/5G networks and IoT connectivity services, particularly in Europe, North America, and Asia. Private networks are becoming more prevalent as a connectivity option because they offer many benefits for IoT deployments, including coverage reliability, network security, low latency, and edge device management.
IoT use cases range from low cost and low power consumption to deep indoor coverage that will proliferate into numerous business implications, including:
IoT deployments are complex, with many projects never making it out of the proof-of-concept phase for a variety of reasons. There are many parts to an IoT deployment beyond connectivity that must be addressed. IDC found that security was the biggest challenge for North American enterprises with IoT deployments. Security should be an area of focus because IoT deployments have long been targets for hackers and cybersecurity attacks. Security breaches reduce a company’s credibility and bring additional problems (see Figure 1).
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Source: IDC’s North American Enterprise 5G, IoT, and Private Mobile Networks Survey, August 2022
There are additional challenges specific to cellular IoT connectivity. Human management of thousands of deployed IoT devices can be complicated, time intensive, and costly. (Imagine relying on human labor to monitor devices remotely and then dispatching field service technicians to address a remote device issue.) Further, many IoT connectivity deployments are international and involve more than one MNO to achieve a customer’s necessary coverage. It is important for IoT connectivity providers to have strong global roaming partnerships in place and offer localization in countries where there are roaming regulations and legal challenges.
Most IoT cellular connectivity providers offer managed services to help reduce complexity for business customers and drive revenue. These services help alleviate the previously mentioned challenges that are specific to IoT cellular connectivity. Managed services providers deliver an end-to-end IoT service from device procurement and connectivity services to streamlined billing and customer service. They can also help control who has access to the network, issue subscriber identity module (SIM) cards, and monitor network performance to identify and correct potential problems through predefined alerts (see Figure 2).
Managed IoT connectivity services also help track IoT devices and ensure the best network connectivity and pricing models. They include targeted offerings that demonstrate a positive business outcome to the enterprise, such as cost savings, improved health and safety, greater operational efficiency, and automation. For the providers, managed services help grow revenue and build long-term relationships with enterprises.
An important part of a managed IoT connectivity service is the customer experience. Most service providers offer a variety of support types: telephone, email, online knowledge base, online user forum, online video, and chatbots. For customers that require priority support, a service-level agreement with the provider is a good option.
Source: IDC, 2023
Organizations leverage IoT connectivity management platforms (CMPs) to keep cellular-oriented IoT deployments up and running. CMPs are an online dashboard view of connected IoT devices and can manage numerous services. These products provide data on IoT network connectivity and device status, allowing organizations to effectively monitor, manage, and secure IoT device rollouts. Some providers build their own CMPs in-house, while others leverage third-party CMPs, with debate around how each approach affects the profitability of the IoT cellular connectivity business. One of the largest CMP vendors was Ericsson, which finalized the sale of its IoT Accelerator CMP business earlier this year to Aeris. Cisco is another CMP vendor and offers the IoT Control Center CMP.
The IoT Control Center CMP offers numerous features to help enterprise customers address IoT deployment challenges. The cloud-based solution provides custom and flexible features, such as agile activation services, dynamic cost controls, SIM ordering and life-cycle management tools, and the ability to monitor devices and device usage in real time. IoT Control Center supports numerous network technologies, including 4G LTE, LTE-M, narrowband IoT (NB-IoT), 5G, and private 4G/5G networks.
Specific IoT Control Center features that address IoT deployment complexities include the following:
Managed services include targeted offerings that demonstrate a positive business outcome to the enterprise, such as cost savings, improved health and safety, greater operational efficiency, and automation.
U.S. nationwide mobile operator T-Mobile provides a full portfolio of IoT cellular connectivity services to organizations with U.S. and global IoT connections. In addition to connectivity, T-Mobile has a strong ecosystem of partners for IoT deployments. Partner companies include hardware vendors, solution providers, service providers, platform partners (including device and application enablement), and cloud service providers. Further, T-Mobile licenses Cisco’s IoT Control Center CMP for use by its IoT cellular connectivity customers, making it easy to manage complex IoT deployments.
In addition, T-Mobile US and Deutsche Telekom (DT) coordinate their IoT portfolios across the United States and Europe and offer the T IoT global managed IoT connectivity service. T-Mobile and DT capitalize on their transatlantic wireless networks in addition to DT’s ownership stakes in 11 more European networks. The global offering accesses 2G/3G/4G coverage through approximately 400 partner networks worldwide, along with LTE-M and NB-IoT coverage and roaming through more than 40 networks each. T-Mobile and DT provide 5G coverage and roaming in more than 53 countries.
T-Mobile is known for its elevated level of customer support. Customers require strong coverage at an attractive price point to ensure a successful IoT project. T-Mobile collaborates with customers to provide reliable coverage based on the IoT project’s specific requirements, whether that is in-building coverage or coverage in an outdoor environment — or both. T-Mobile also offers flexible pricing models that allow an organization to ensure its IoT deployment meets return- on-investment (ROI) and business case objectives. No IoT deployment is without issues, and T-Mobile will quickly address questions or problems as they arise, working with the customer to ensure a project’s success.
Many service providers offer managed IoT connectivity services, so it is important for MNOs to differentiate and provide a best-in-class customer experience. Fierce competition also means providers must ensure they offer ubiquitous coverage, both domestically and internationally, for organizations with global IoT connections to attract customers. To ensure profitability for their IoT connectivity services, providers need stable and increasing revenue streams from offering cellular IoT connectivity services. MNOs must also build an IoT partner ecosystem that helps organizations address the various parts of an IoT project and streamlines deployments.
Many digital transformation plans include IoT deployments that integrate cellular connectivity. While IoT deployments and IoT cellular connectivity are complex, worldwide managed IoT connectivity services help organizations address many of the challenges involved in IoT projects. IDC believes the IoT cellular connectivity market will continue to grow, and to the extent that T-Mobile can address the challenges described in this paper, the company has a significant opportunity for success.
