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IoT forces AT&T to think about what was the impossible – life beyond cellular


© AT&T

  • The second largest wireless operator in the US to further increase its focus on IoT
  • Says it is a "top priority" as revenues from mobile comms and satellite TV decline.
  • However, cellular may not be the primary network for IoT
  • Telco stays tight-lipped on actual IoT deployments and revenues

With the wireless market in the US now not so much saturated as utterly waterlogged, telcos and service providers are splashing around in efforts to tie themselves on to a life raft that will not only keep them afloat but also drift them out of the doldrums and into the the haven of revenue growth. Top of the list is the Internet of Things (IoT) and AT&T, the largest provider of fixed line telecoms and the second biggest provider of mobile telecoms in America, is, if you'll forgive the pun, taking quite a punt on it.

AT&T is the oldest extant telecoms provider in the US and over its long life it has seen many technologies and markets come and go. Thus the company has the maturity to understand that cellular may well be just one more step along a technological evolutionary road and certainly accepts that cellular is very unlikely to be the primary network for the billions of devices that will connect to the Internet of Things in years to come.

In that regard, AT&T has already built a strong presence in the automotive industry, where   IoT technology is playing an ever-increasing role. Over the last few years AT&T has done deals with 10 major automotive manufacturers, including Audi, Ford and General Motors, that now use software platforms the telco has developed to provide a variety of services such as weather reports, traffic reports and Internet radio to vehicles in motion as well as a popular and growing roadside assistance service.

And now AT&T has made explicit its determination to focus even more keenly on the burgeoning connected cars and automotive IoT devices market. Speaking last week at the Hannover Messe in Germany, Chris Penrose, senior VP of IoT at AT&T said, "It is a top priority of our company to be a leader in the IoT space. We're just at the beginning and we have more automotive partners 'in the works'".

Mr. Penrose added, "At AT&T we have the ability not only to connect things but also the ability to enable the collection and the analytics of the data behind those – as well as do it in a secure manner and do it globally. AT&T now has about 26 million connected objects and is connecting more than a million more every quarter".

A multi trillion dollar opportunity

The value of the global IoT market is forecast by the industry analyst and research house IDC to rise from the $656 billion recorded in 2014 to more than $1.7 trillion by 2020 and the likes of AT&T and Verizon want a chunk of that – not least because the growth of 'traditional' comms services such as mobile and satellite TV (AT&T owns DirecTV) reached a plateau some time ago and are now in decline. Indeed, AT&T's recent Q1 figures highlight that the need for the company to develop new business and revenue streams is ever more urgent.

Interestingly, Chris Penrose confirmed AT&T's acceptance of and participation in the sea-change that has rolled around and across the global comms industry in recent years and is keen to point out that in these changed, post 'lock-in' days, the telco neither expects nor tries to insist that customers AT&T platforms. He said, "We want to be the very best collaboration partner and if that means sometimes we will provide connectivity than that's OK."

Mr. Penrose said that AT&T can 'add value' to customers in various ways including the provision of secure and robust connectivity, its expertise in in wireless billing, OSS and BSS and the sheer scale and reach of its networks.

However, despite the bugle-blowing and self-promotion AT&T is surprisingly coy when it comes to revealing just how much revenue it is currently making from IoT. In fact it won't say a single word about it whereas arch-rival Verizon is up there, yelling its head off and claiming that it made $690 million from IoT services and applications last year (an increase of 18 per cent on that achieved in 2104) out of total revenues of $132 billion.

That AT&T remains so reticent even as its cut-throat competitor hogs the headlines with its figures is puzzling. Could it be that there is a yawning credibility gap between the hype and the reality?

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