If there’s one thing that is constant in the mobile industry, it’s the lofty predictions that come with the emergence of new services. Perhaps no other offerings are stirring more intrigue than those born from the “Internet of Things” and machine-to-machine services.
Industry heavyweights like Ericsson and Cisco predict that by 2020, the amount of Internet-connected things will reach a staggering 50 billion, with $19 trillion in profits and cost savings coming from these new services over the next decade.
The capabilities and potential uses for connected devices are truly astounding, with innovative uses documented in virtually every industry sector, from agriculture to health care to consumer services and beyond. While growth from IoT is well documented in this early phase of services, what is not clear is how mobile service providers will profit from the next wave of services.
Mobile operators are already capturing new revenue from the first wave of M2M services, such as surveillance video, health care and telematics. As consumption of these services continues to grow, mobile service providers have a much bigger role to play than just providing the connectivity.
Using their unique position in the market, mobile operators undoubtedly can take a more expansive approach by connecting disparate devices and networks; aggregating high volumes of transaction data and extracting valuable information from it; and enabling interconnection across a wide variety of applications.
So, how can they harness the value of these strengths to profit from IoT and M2M services? In three key ways:
No. 1: Use innovation to ensure existing assets can support a rapidly evolving marketplace
The truth is, many mobile providers have the IT infrastructure, network and systems they need to support the rapidly evolving business models coming from IoT – all they really need to do is ensure they are agile enough to support whatever comes next.
That’s easier said than done when service providers simultaneously manage LTE networks that handle a growing volume of digital transactions alongside the 2G/3G networks that handle voice and messaging. These two networks and service sets must coexist, creating a very complex environment that requires careful co-management of both platforms in new, more efficient ways while still delivering innovation and a differentiated customer experience.
In the past, being innovative meant working with systems integrators and third-party vendors to adapt and evolve to market changes. This often meant developing specific solutions against specific requirements. However, this model is no longer an effective way of tackling innovation in today’s new world where change is constant.
That’s why many communication services providers are now turning to managed services partners who are focused on delivering solutions that are “fit for purpose” rather than just conform to requirements. More importantly, managed service providers aren’t just working to solve specific “point in time” requirements – they are continuously assessing and continuously improving the service maturity to ensure current assets are effective and remain relevant.
No. 2: Take full advantage of customer data to drive enhanced customer experiences
As the number of links in the IoT value chain grows, mobile operators have an unprecedented opportunity to use their skills and systems to foster entire M2M ecosystems nourished by the information they can extract and broker from their advanced networks and subscribers.
Jupiter Research recently reported that IoT will generate service revenue of over $40 billion globally by 2019, nearly doubling the size of today’s market. But there are inherent challenges with managing and analyzing real-time data generated from M2M and IoT. In fact, a Harris Interactive poll of international business executives showed that 65% of businesses think that making meaning out of M2M data is their biggest challenge.
The CSP that develops a more holistic approach to an IoT ecosystem that manages the data – and delivers convergent insights and services beyond device connectivity – has the opportunity to unlock considerable potential. Existing customer data can provide key insights into behavior and trends that will drive future behavior; help CSPs understand gaps in the customer experience so they can be addressed; and empower customers to better use new and existing mobile services.
And, here again, is where the traditional model of deploying a single-point solution to achieve better reporting and analytics just doesn’t get the job done. A trusted managed services partner with deep domain knowledge can help more effectively, by not only identifying and deploying the best analytics solution, but by proactively taking advantage of this insight to continually enhance and optimize the customer experience.
No. 3: Create robust partnerships that can optimize IoT revenue streams
Just as revenue splits from data roaming agreements and content partnerships required a new way of sharing profits, so too will IoT and M2M.
By partnering with device manufacturers, for example, CSPs provide optimized and value-added services for customers. They can create more profitable packages that bundle Wi-Fi services alongside connected devices to provide a consumer with optimized connectivity and an optimized experience.
Successful M2M players achieve maximum agility (and profitability) by adapting their OSS/BSS from highly customized, proprietary platforms to “plug and play” networks and platforms that other parties can use when working with them to provide new services and products.
It’s a given that CSPs will manage the data, devices and services associated with connected things, but doing so through a managed services model can mean the difference between merely providing connectivity for these new services and delivering “continuous” enhanced value and a differentiated customer experience around them.
Is managed services the missing link?
The reality is that change in today’s world is fast-moving and more prevalent. CSPs can no longer afford to keep negotiating point solutions with system integrators and vendors. Managed services, on the other hand, is completely suited to this new agile and constantly evolving world, because managed services aims to deliver to business outcomes, and good managed services providers proactively capitalize on data and trends to deliver continuous improvement and innovation.
M2M and IoT services are popping up in virtually every industry. Some examples include:
• Utilities: Homeowners already use their smartphones to monitor utilities remotely, adjust the thermostat and lights, close the garage door and check in on the dog. Utility companies are using connected devices to help manage usage and improve energy efficiency.
• Agriculture: Farmers in Europe are equipping cows with connected monitors to track the animals’ location and even alert them when calving begins.
• Social: Artificial ice cubes with connected sensors can monitor alcohol consumption and text message a friend when a drinker has had one too many.
• Retail: Beer taps equipped with sensors measure each pour, “tweets” each drink and sends alerts when the keg needs to be replaced.
• Transportation: Connected sensors in roads are being used in a variety of ways, from alerting drivers to potential hazards, monitoring highway traffic and vehicle weights as well as road conditions.
• Health care: Doctors can use heart-rate and other monitors to track patients remotely. Some even predict the use of Internet-connected sensors smaller than a grain of sand being injected into the bloodstream and used to monitor various conditions in real-time.
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