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Internet of Things: Value beyond connecting billions of devices

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All around us, everyday objects such as watches, pulse monitors, clothes, smart TVs, cars and even buildings are increasingly getting connected. In industrial settings, sensors are progressively making their way into intelligent and autonomous environments. The latest issue of Ericsson Mobility report predicts 18 billion IoT connections by 2022, or more than half of the 29 billion connected devices forecast for that year.

Developing a digital transformation strategy has become an important priority for many companies, particularly as demands for new digitized offerings are increasing from their customer base. Internet of Things (IoT) presents new opportunities for mobile operators to enable that digital transformation by leveraging their core assets and moving up the value chain, through providing intelligent platforms, facilitating ecosystems, and even becoming a transformation partner to other industries.

Mobile data traffic consumption is doubling every second year. However, since 2010 mobile operator service revenue growth has slowed down to a current annual rate of less than 3 percent globally. Apart from macro-economic influences, this slowdown is mainly due to fierce price competition, decline in voice revenues and a struggle to take a position in the emerging content industry which is currently dominated by other players. Now, IoT has the potential to be the next growth wave for operators.

Connectivity is the foundation of IoT value creation. When things around us become smart and connected– our sensing home tells us of a possible gas leak or our car warns us of an impending breakdown – operators have new opportunities to add value by bringing consumers together with relevant services more efficiently than possible before. Through this gain in efficiency, operators have increased opportunities for monetization and a way out of the current revenue stagnation.

In order to take advantage of the emerging opportunities, mobile networks will need to cope with all kinds of unique devices with different communication requirements. At one end will be simple wireless devices such as battery-powered sensors and actuators that will transmit very little data while operating unattended for several years. At the other end will be high-bandwidth, mission-critical services, and devices such as autonomous cars that require constant, reliable, and super-secure connections. Cellular networks, with their ubiquitous coverage, versatility, and rich ecosystems are well positioned to capitalize on these advantages.

A variety of IoT solutions are already in use within different industries. Energy and utility companies are replacing old meters with remotely readable smart meters sending data from the connection points, enabling them to meet their customer needs on an individualized level. For example, an energy company could provide consumer benefits such as more accurate and timely billing, shorter outages, and improved possibilities to reduce their power consumption. At the same time, improved network and load management leads to better capacity utilization and reduced maintenance costs for the energy company.

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