The majority of mobile network operators offering IoT connectivity to enterprise customers are struggling to make a decent margin, with many analysts estimating that connectivity constitutes just around 10% of the overall profit along the IoT value chain. IoT connectivity is getting more complex due to the ever-increasing number of solutions available to enterprise customers (i.e., low-power WAN, non-GSM), and as a result, there is huge margin pressure on basic connectivity. So, where is the rest of the money and how can MNOs increase margin and revenue from IoT?
First, mobile network operators must provide improved assistance to enterprise customers, especially in regards to the overall IoT solution design and operations. Building and orchestrating an IoT partner eco-system opens the door for monetary gains.
For every business IoT application, the design and production of the right device (with the best connectivity solution) are already big challenges in large part because devices need to be managed and they must be managed remotely. Nothing kills a business case like having to send engineers on site to fix something. Security and supportability of a live fleet of connected things is a complex task that most enterprises have little experience with. A lot is at stake, including enterprise reputations. MNOs have all the expertise and skills to provide a managed device service to their enterprise customers.
Many IoT solutions involve devices not on enterprise premises. MNOs already have significant field service teams that can provide installation and support services, which is especially attractive in combination with managed device services.
Enterprises need a solid IoT application enablement platform. From the hundreds of so-called IoT platforms on the market today, MNOs can provide one or a couple in a Platform-as-a-Service (PaaS) model. Cleverly chosen, such an application enablement platform would have the device management services as well as the connectivity management properly integrated.
Ultimately, almost all IoT enabled solutions will power new kind of services. Under new business models, this global trend is often referred to as “servicization.” Enterprise customers and consumers are demanding more and more a fully digital customer experience that is always on with immediate activations. This necessity for immediacy requires a platform like the MATRIXX Digital Commerce Platform. It also needs a team to run such a platform effectively. Charging, customer management and payments for all of these new kinds of services can be offered by MNOs as a direct service.
Enterprise-grade IoT projects are difficult because digital transformation is challenging. That is the main reason why it takes more time for MNOs to see the take-up that all analysts have predicted. However, endless opportunities exist for MNOs to adopt fully integrated IoT solutions and the resulting new services.
The good news is that we’re on our way to more connected things, producing more traffic and needing new value-added services (like network-based location) as IoT becomes the heart of business and life-critical systems. By combining the above skills, fully managed services will provide MNOs with new and improved approaches to gaining revenue.