Fri. Jan 14th, 2022

Communication service providers (CSPs) are capitalizing on enterprises’ seemingly insatiable demand for Internet of Things (IoT) solutions. Achieving their lofty IoT business objectives is often another story.

To plug and play in — and profit from — an increasingly Industry 4.0 world, CSPs must harness the vast amounts of Internet of Things (IoT) data generated by clients in industries spanning entertainment and healthcare to manufacturing and logistics — and convert this insight into highly verticalized solutions. Importantly, they must accomplish this with user consent upper most in their minds — and within the bounds of an increasingly stringent regulatory environment that protects consumers’ privacy, including General Data Protection Regulation (GDPR).

The risk could be worth the reward. IoT is poised to be a form of savior for businesses of all stripes and sizes and is expected to generate over $1.5 trillion annual revenue by 2030. And according to Gartner, by next year, one in four large organizations will either buy or sell aggregated data on formal online data marketplaces. CSPs have a unique opportunity to monetize their access to vast volumes of data flowing through their infrastructure. All of this is welcome news to CSPs, many of whom face increased competition and downward revenue pressure on their traditional voice and data services. AT&T and others are already marking their territory in this area.

In addition, investor expectations are higher than ever. The loss of short message service (SMS) and voice services revenue over the last decade has been offset by growth in fixed and mobile broadband revenue. Shareholders expect CSPs to continue to invest in next-generation networks (5G and IoT) without increasing their CapEx-to-sales ratios, to continue their expansion beyond traditional telephony services.

The fast-expanding IoT services market is one way that CSPs can further accelerate their growth trajectory.

A recent study by TMforum reveals that CSPs see IoT platforms as new revenue streams that do not compete with or undermine traditional connectivity services. But building a platform business architecture requires fundamental changes in thinking and a very different way of operating. CSPs’ IT infrastructures, systems, functions and features will all need to:

  • Enable the fast, cost-efficient addition of partners and partner ecosystems
  • Support the flow and settlement of revenue across many partners and in multiple directions to create multi-party trade
  • Have the ability to scale up and down at levels and speeds previously not considered possible
  • Provide information to, and use information from, previously siloed domains
  • Achieve all this with far greater cost efficiency

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