After several years of watching Over The Top (OTT) players cannibalize their potential revenue, telecommunications providers are finally getting the chance to recover lost ground. A ray of hope is emerging in the shape of the the Internet of Things in telecom enabled by excellent connectivity.
New and exciting revenue-building opportunities are underway, motivating telecom operators to rethink their strategies and embed digital into their core business models, especially in the business-to-business (B2B) market. To regain their position at the top of the communications market, communications service providers are making inroads into the IoT market, which is expected to generate over $1.5 trillion annual revenue by 2030.
According to Gartner forecasts, one in four large organizations will be either buying or selling data on formal online data marketplaces by 2024. Telecom companies, in particular, have a unique opportunity to capitalize on their access to vast volumes of data flowing through their infrastructure.
IoT in Telecommunications: A new perspective on competitive advantage
The regularly increasing number of digital natives living an always-on lifestyle is pushing the demand for connected devices, the worldwide number of which already exceeds 20 billion. The evolution to Industry 4.0 and the drive to automation are further contributing to the adoption of smart business solutions.
In this environment, telcos have the upper hand over competitors, as they possess the expertise and resources required to manage and connect a great many IoT devices in their networks. Many telecommunications providers are already active in this field, offering their own network connectivity, sensors, devices, and IoT applications to create new value-added services. Industry leaders such as Comcast, Verizon, AT&T, and Vodafone are deploying narrowband IoT and LTE networks for low-cost, comprehensive coverage, connecting devices over a long range.
Challenges of implementing IoT in telecom
Despite all its promise, IoT for telcos is not that easy to adopt. The undeniable advantages and endless opportunities go hand in hand with inevitable (and critical) issues telcos face when trying to implement IoT solutions.
The telecom sector is an incredibly fast-paced environment where the underlying infrastructure has to continuously scale alongside the continuous growth of the number of connected devices. McKinsey & Company reports that every second, 127 devices get hooked up to the internet for the first time. And as organizations add more connected devices, IoT scaling gets buried under an avalanche of new forms of data from devices such as sensors, gateways, routers, and cameras. Thus, digital enablers must find an all-encompassing connectivity solution that can keep up with the network’s growth.
Every successful IoT deployment needs to resolve traditional network security issues. The average IoT device gets attacked within five minutes of going online, and 75% of devices infected in those attacks are routers. Thus, telecom service providers need to address device identity, personal data protection, access control, distributed denial of service (DDoS), authentication, and other security and confidentiality issues, since security and privacy have become major concerns when it comes to users’ personal data.
Competing technologies, diversified operating systems, non-unified cloud services, and a lack of standardized machine-to-machine (M2M) protocols create a barrier to IoT expansion. Performance issues occur on various levels, from troubling device synchronization and communication to incompatibility of data flows between different smart devices within an IoT platform. Yet the biggest problem lies in the fact that ultimate compatibility can be achieved only if different industries collaborate — and this remains only an aspiration.
Big data management
The Internet of Things in telecom is one of the biggest sources for gathering vast amounts of data. As the number of connected devices grows, the production of data also multiplies. Managing this data means having access to it, processing it in a timely manner, and storing an enormous amount of it — all of which requires a highly scalable and technologically advanced computing platform that won’t affect applications performance.
IoT is usually utilized to facilitate information anywhere at any time – depending on user requests. Thus, the availability of physical IoT devices is critical. One possible solution is maintaining redundant programs and hardware devices to balance out the load in case of failure. Generally, these types of devices are considered redundant and create additional complexity for telecom platforms, but it is better to use them. Why? IoT networks make use of multiple technologies, and overall network performance can’t be judged by looking at a limited number of devices. Both active redundant devices (those that don’t perform as expected) and passive redundant devices (those that are activated in case of primary component failure and are otherwise in sleep mode) are important to solve the IoT availability challenge.
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How can telcos benefit from IoT?
Why does IoT get so much attention if implementing it means fighting countless issues? Because the benefits of IoT in telecom are hard to resist. The Internet of Things allows genuine service and product expansion, giving telecom service providers a chance to go far beyond basic offerings. Automation, innovation, and cutting-edge business transformation — that’s what IoT means today. Let’s take a closer look at the benefits of successfully implemented IoT technology.
Optimized operational efficiency
IoT-based technology is a powerful tool for collecting real-time data, making a huge impact on various critical processes and boosting their efficiency. Additionally, IoT creates a noticeable difference in inventory management, asset maintenance (predicting asset work capacities), HR management (tracking employee breaks), location optimization, energy savings, and so on.
IoT plus telecom companies equals accelerated speed and more bandwidth. IoT protocols running on a 5G connection can broadcast information from thousands of devices to unlimited users without a loss of communication speed.
Increased customer satisfaction
Implementing IoT devices allows telcos to collect and analyze a huge amount of data generated by telecom operators. This data can help businesses define prevailing tendencies, determine customer behavior, and design new value-added services to improve marketing, sales, and production, thus attracting more customers and retaining existing ones.
The days of lost and stolen devices are over. With IoT technologies, businesses can locate and find lost devices, lock and unlock them remotely, and install updates remotely. Tracking solutions cover use cases including tracing products, monitoring customer satisfaction, and keeping track of employee and user engagement.
Embedded into IoT networks, blockchain technology provides improved confidentiality and safety. Its role is to minimize the possibility of data loss, hacking, and swindling. Blockchain technology provides advanced cryptographic protection, cuts processing time and costs, optimizes transactions, and improves overall compliance.
Advanced predictive models
The Internet of Things helps telcos implement advanced forecasting models. Leading analytics technologies such as machine learning (ML) and predictive analytics can help reduce costs and the effort required when it comes to handling huge amounts of data. This, in turn, improves service levels by helping telecom operators predict churn rates, gain a competitive advantage, and arrive at the best business decisions.
Expanded telecommunications services
Driven by the desire of customers to have a greater connection between the outside world and their personal lives, IoT continues to have a huge impact on the whole telecom industry. The scope of IoT devices has gradually expanded from smart wearables (watches and fitness trackers) to smart devices that can communicate with each other.
Prominent IoT use cases in telecom
IoT provides telecommunications companies with a unique chance to monetize the data they have and venture into new industries, offering initiatives and services beyond network connectivity. Nevertheless, service operators cannot reposition themselves as IoT leaders on their own.
By joining forces with other companies in the IoT ecosystem, communications service providers can explore new opportunities and IoT examples in telecom to develop a more extensive array of services based on their unique assets. In the telecom industry, IoT technologies may be used in intelligent networks, data analytics, IoT platforms, billing, CRM, and cloud services for a vast range of industries, from manufacturing to healthcare.
Distribution of value across the IoT chain
Industrial monitoring systems
A striking 87% of industrial businesses plan to proactively expand their use of IoT to manage their resources and equipment in real time. The advent of Industry 4.0 opens up a substantial opportunity for telecoms to make the foray into manufacturing by powering connectivity in intelligent supply chains.
One of the ways for CSPs to capitalize on IoT in the telecom industry is through tailored network offerings that connect every piece of the complex manufacturing ecosystem, from temperature sensors to flow meters, to ensure end-to-end supply chain visibility, improve production efficiency, and drive cost savings. T-Mobile was one of the first carriers to take advantage of this application of IoT in the telecommunications sector. In 2018, the company launched the first Narrowband IoT network in the US to help industrial clients capitalize on the power of data in their warehouses.
Source: AT&T Business
Smart cities and shared economy
5G and narrowband IoT for telecom are the mainstays of smart city implementations. CSPs conclude mutually beneficial public–private partnership agreements with municipalities, local governments, and academic institutions, acting as suppliers of critical services for digitizing and integrating urban infrastructure.
There are many roles telecommunications providers can assume in the smart city value chain, supporting the development of efficient, inclusive, and connected environments and maximizing their own revenue share. In addition to providing broadband internet connections, operators may extend their capacities to supply data management and monitoring solutions and create branded customer-facing service delivery platforms. The urban environment provides fertile ground for telecom operators, as shown by the enormous number of real-life cases of telco involvement in intelligent city initiatives. O2, AT&T, Telefónica, NTT Docomo, SK Telecom, and Deutsche Telekom are only a few of the dozens of Tier-1 telecom players modernizing cities worldwide by supplying IoT-based solutions.
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Smart homes and buildings
Telecommunications service providers also have a significant role to play in the increasingly growing smart home and building market. Apart from supplying connectivity solutions for heating, utilities, air conditioning, alarms, locks, cameras, and appliances, telecom operators are positioning themselves as third-party resellers of tailored consumer applications and services for this segment.
Comcast was one of the first telcos to drive smart home investments, expanding its home entertainment portfolio with Xfinity. The Xfinity service integrates TV, internet, voice, mobile, and home management in a single dashboard. Other telecoms are also following Comcast’s path. Looking to monetize smart home opportunities, they are taking the partnership route and teaming up with hardware and software suppliers to develop connected home solutions. Examples include Telefónica Spain’s partnership with Microsoft to create new AI-powered in-home customer experiences and Verizon’s recent cooperation with Honeywell to embed the provider’s LTE connectivity into smart meters.
IoT for the healthcare sector
With healthcare IoT solutions estimated to reach US$176.82 billion by 2026, IoT in the healthcare market is a revenue goldmine for telecom operators. IoT makes it possible to monitor and manage the health of those suffering from chronic or age-related conditions and create new, high-value remote medical services based on modern technology and connectivity.
The most significant applications of IoT within remote healthcare are in remote asset management platforms, remote healthcare diagnostics devices and solutions, and smart incident management systems. Telecom operators are taking charge of building secure, robust, and resilient networks to connect ecosystems of smart apps and devices. At the same time, their business partners handle delivery of the hardware and software infrastructure.
Due to data sensitivity and the sophistication of technology, deploying IoT technologies in the medical sector requires substantial investment. However, the social impacts of these implementations are significant. An interesting example comes from South Korea, where the leading telecom operator, SK Telecom, signed a strategic deal with Yonsei University to build an IoT-driven hospital, allowing patients to control their own beds, lighting, and entertainment options. In China, several leading medical facilities are working together to implement the first 5G-based hospital network standard to optimize healthcare delivery in the country.
Connected vehicles and autonomous driving
The automotive industry is more impacted than most by IoT endpoints and 5G. While OTTs are trying to elbow their way into the connected car value chain, telecoms remain at the edge as providers of the core part of the autonomous vehicle ecosystem. They are partnering up with software development companies and integrators to create highly secure and robust management platforms that enhance vehicles with a full suite of telematics, automation, infotainment, navigation, and fleet management services.
For example, Nokia is accelerating autonomous driving with its Worldwide IoT Network Grid (WING). The managed service provides OEMs with a multi-tenant, cloud-native IoT core infrastructure and management platform. Beyond providing managed connectivity for secure and reliable connections, CSPs are also investing in their own connected car services that span sophisticated in-car entertainment and enable out-of-car experiences.
Learn how over-the-air mapping solutions can translate into new market opportunities for IoT connectivity providers
Internal use of IoT in telecom industry
CSPs are also embarking on their own IoT in telecom journey, using the power of acquired data to tap into crucial insights into their inner workings. Telcos deploy intricate software platforms to connect diverse physical assets, leveraging their combined intelligence to strengthen decision-making and develop prediction models.
Internally, telecoms are taking advantage of IoT technology to drive efficiency and optimize resource use within their own businesses. For instance, through IoT-enabled building energy management, AT&T was able to curb energy use in its facilities by 9M kWh in a year, resulting in almost $1 million in savings. The provider also builds on IoT data to streamline supply chain operations and increase the efficiency of vehicle fleet management.
IoT connectivity services
One of the most popular IoT implementation options is offering connectivity services to users who already own IoT devices. Sure, the data generated by IoT devices in this case is kept and processed mostly on the client’s side. Yet mobile operators are the ones providing an IoT connectivity platform responsible for managing those devices and improving the quality of the connection between the customer’s infrastructure and the telecom network.
IoT initiatives provide telecommunications businesses with an enormous amount of data, enabling telcos to create information pools or apply this data for analytics. This is one of the most effective ways to gain valuable customer information and generate better business ideas. Today, telcos have unique opportunities to use analytics combined with data from IoT devices. With algorithms based on artificial intelligence (AI) and machine learning (ML), telcos can track user behavior, carry out diagnostics, and develop forecasting models to predict the industry’s short- and long-term tendencies.
Data storage and management
Telecom companies can also store and process data gathered from clients’ IoT devices. The process is quite simple – a customer runs a business application to access any needed information on the centralized platform. In this scenario, the provider is responsible for all backend processes including data storage, filtering, classification, and cleansing.
Thanks to mobile networks and IoT sensors, advanced and improved location services are now a reality. Location services can be used in multiple areas but are particularly useful in smart city applications, as proximity sensors can share information between IoT applications. Apart from that, IoT sensors can be easily added to the public transportation to provide optimized routes, find the nearest public transport stops, and track traffic and transport movement in real time. Built-in proximity also helps locate people, find each other in crowded places, and track movements.
Low Power WAN
One of the most critical needs of telecommunications providers is for effective machine-to-machine connections enabled by Wi-Fi and GSM networks. But while these connections are highly efficient for the industry, they are challenging to implement due to high bandwidth and capacity requirements. Implementing IoT solutions helps telcos establish energy-efficient communication between machines using Wide Area Networks (WANs). These low-power global radio networks consume much less energy compared to other networks and allow telecom businesses to generate revenue from additional sources such as new apps, services, and technologies.
Telecom providers support communications between people worldwide and help businesses access global markets. Yet any issue with the service assurance or failure to provide service to the end user results in an immediate decrease in profits. To ensure high-quality and consistent service, telcos rely on an enormous amount of equipment, and failure of this equipment means a breakdown of the whole system. Thus, it’s critical to ensure flawless and uninterrupted equipment operation. Every failure needs to be addressed and fixed promptly so that the end user doesn’t notice any malfunction. Is this possible?
IoT technologies help telcos meet this challenge. IoT sensors can be installed on cell towers and in critical equipment to collect and analyze data. This helps telcos identify problems, respond to them in a timely manner, and carry out real-time surveillance. Permanent and uninterrupted access to equipment status data makes it possible to monitor the operating productivity of equipment remotely, reducing maintenance costs and minimizing downtime.
Still, equipment failure is not the only critical issue that needs to be addressed by telcos. Global disasters are another cause of great damage to critical equipment. Telcos might immediately respond to any threats and take control of the situation to avoid unforeseen consequences. The Internet of Things allows communication providers to effectively manage facilities, monitor incidents, and detect disasters in time so they can perform emergency equipment shutdowns to prevent total equipment breakdowns. Preventive measures like these help to avoid hardware damage and financial losses.
Expensive and critical equipment is always at risk of theft. Thus, telcos are continuously working on improving their security systems, which must be reliable and robust. IoT technologies can help here too. For example, installing IoT-based cameras might improve the physical security of your assets, as those cameras can monitor potential safety breaches and automatically send alerts. The Internet of Things helps telcos enhance their capabilities in terms of physical safety by restricting access to third parties and preventing potential security threats.
Monitoring assets remotely is another popular use case of IoT in the telecom sector. For many industries including transportation, healthcare, and retail, the location of physical assets such as vehicles, orders, or even patients is critical to track in real time via mobile apps. Telecom operators can assist here. Using extended communications networks and cloud computing, telcos can monitor asset movements by collecting signals from embedded sensors and transmitting them to industry-tailored applications.
PaaS and SaaS solutions
Platform as a service (PaaS) and software as a service (SaaS) solutions are among the most profitable ways for telecom companies to generate revenue.
The PaaS model enables clients to independently develop their own solutions by accessing cloud-based IoT platforms with a wide range of available tools. Clients find this extremely useful, especially if they want to use their own infrastructure and tools without taking care of their management and support.
SaaS applications offered by telecom operators can be tailored for practically any industry and bring exceptional benefits. For example, a single mobile healthcare app can perform round-the-clock monitoring of critical blood sugar levels and send alerts to the hospital in an emergency. Or a mobile fleet tracking app can save a company thousands of dollars on fleet management.
IoT solutions extend the range of services provided by telecom companies from pure connectivity to industry-specific end-user applications. Existing telecom network infrastructure can easily integrate user data, analyze it, and help create the best possible business solutions.
A short guide to IoT implementation
IoT for telecom operators is key to bringing additional value to telecom networks. With the fast-paced transformation of 4G to 5G and the growth of 5G networks, the value of IoT is hard to underestimate. No wonder more and more telecom service providers are considering developing or adopting IoT services. Yet the question remains: How can businesses utilize IoT without losing money, time, and efficiency?
Step 1 — Increase connectivity
Connectivity is king. When it comes to implementing IoT technologies in the telecommunications sector, expanding your network connectivity should be your priority. Telcos are in the best possible place for that today, as the industry’s fast-paced environment has led telecom businesses to a position in which they can embrace new technologies and take full advantage of them. IoT technologies provide seamless and secure communications, whereas telecom providers are obliged to tune their physical assets to offer IoT-enabled connectivity platforms. Today’s IoT initiatives and opportunities are practically limitless but require ultra-reliable computing capacity to reveal their potential.
Step 2 — Create an effective ecosystem
The ecosystem is your foundation on which to build. Within the next five years, the telecom business model is expected to be completely transformed. The ecosystem you build today has to be resilient to respond to upcoming challenges and flexible enough to adopt new technologies. The telecommunications sector will remain profitable, but only with successful ecosystems that combine talent, technology, and business vision.
To exploit the most promising industry capabilities in the near future, pay attention to your current connections. Prove yourself to be a reliable IoT services provider and create strong partnerships with multiple successful industry companies. A vast network will inevitably lead to business innovation and additional value flows.
Step 3 — Rule over IoT readiness
IoT agility is your key to success. To figure out its exponential value, the telecom industry needs to shift from being a master of a single vertical to forming ongoing partnerships with multiple industries. So, to rule over IoT readiness:
- Expand your core connectivity. Invest in cutting-edge technologies and top connectivity solutions. Also, consider transferring your core expertise to IoT.
- Build trust one industry at a time. Let your partners deliver enterprise-grade solutions while you build a highly secure and reliable core IoT network.
- Create multiple verticals. Go beyond connectivity. Become a matchmaker for industry players who want to monetize their data.
Intellias’ unique expertise with IoT in telecommunications
As a leading technology partner that is trusted by Fortune 500 companies, Intellias has more than 20 years of experience delivering powerful customized solutions. By delivering advanced technology services thanks to vast AI and ML skill sets, we are helping manufacturing companies become leaders in the connectivity space. Our experts apply best practices to shift from established routines and accelerate their solutions and business capabilities.
Our many successfully delivered and implemented projects speak for themselves. Let’s take a peek at the most prominent use cases of Intellias IoT solutions.
Industrial IoT accelerator speeding up the deployment of connected solutions
In pursuit of accelerating the IoT journey for enterprises, Intellias partnered with a German software engineering company to build a platform for enabling industrial IoT deployments. The IoT platform developed features a powerful suite of solutions offering advanced capabilities — from device connections to data visualization — to speed up the development of enterprise IoT systems and ensure robust connectivity within industrial IoT device ecosystems.
Mobility as a service solution for an improved transit experience
One of the world’s leaders in location-based data services and solutions for smart urban mobility intended to set up a new mobility as a service system to deliver rich navigation data to a variety of transportation services, including for public transport, bikesharing, carsharing, taxis, and car rentals. Intellias helped to improve the IoT-enabled mobility as a service solution to provide faster and more cost-efficient journeys to daily commuters and travelers.
Industrial IoT predictive maintenance solution for manufacturing hubs
A renowned inventor of novel technology platforms and a world-leading science and research center was looking for an engineering partner to create turnkey production-ready software. The goal was to build a scalable IoT predictive maintenance solution for industrial equipment to prevent malfunctions and unplanned plant downtime. Intellias built an intelligent monitoring platform for condition-based predictive maintenance to ensure asset health and 100% equipment uptime.
The future of value-added services and IoT in the telecom industry
After establishing themselves as reliable connectivity providers, telcos have reached a turning point. As the scope and profitability of traditional telecom services have plateaued, connectivity service providers must build on core strengths — mature telecommunications infrastructure, impressive data sets, and 5G connectivity — to retake the leading position in the communications value chain with new value-added offerings. However, facing the competition on their own is not a viable option for any telecom operator.
The number of IoT devices worldwide is expected to reach 29 billion in 2030 according to Statista. This is almost triple the number of IoT devices in 2020 (around 9.7 billion).
To muscle out OTTs and capture lucrative cross-industry opportunities presented by the Internet of Things, telecom providers need to build an ecosystem of trustworthy and innovative technology partners. By forging partnerships with platform and software players, communications service providers may clear the path for sustainable growth and unlock new revenue streams based on modern IoT services.
Contact our experts to learn more about how to innovate and competitively differentiate yourself by offering new IoT-enabled services to your customers.