Exploring IoT strategies: telecom service providers pursue multiple paths to IoT revenue

• Study participants believe in the potential of IoT and describe new cellular IoT technologies as game changers
• 70 percent of service providers interviewed do not have a well-defined strategy, instead they are testing alternative roles within the IoT value chain
• 80 percent of interviewees aim to create value beyond connectivity either by providing differentiating services or by becoming IoT service enablers or service creators

A new Ericsson (NASDAQ: ERIC) study, Exploring IoT Strategies, provides unique insights on Internet of Things (IoT) value chain positioning from 20 leading telecom service providers globally as they engage with, and position themselves in, the IoT market.

The study identifies an IoT positioning framework, which captures service providers’ roles, and sub-roles, in the IoT value chain. The study also provides commercial insights, key capabilities required and case studies for each role.

While revenue growth is the unanimous key driver for telecom service providers entering the IoT market, the report reveals that multiple paths are being pursued to achieve that revenue growth, with 70 percent of the interviewees having no well-defined strategy.

In addition, the interviewed service providers believe cellular IoT and new 5G technologies will be a game changer in IoT.

The four service provider role categories identified by the study are: Network Provider, Connectivity Provider, Service Enabler and Service Creator. While the network provider and connectivity provider roles are seen by the interviewees as foundational roles, driving most of their IoT revenues, 80 percent of study participants also plan to create value beyond connectivity. Service providers see that additional value can be created either by providing differentiating services through sub-roles within the four roles, or by progressively offering end-to-end solutions as service enablers or service creators.

Jeff Travers, Head of IoT, Ericsson, says:

“The report confirms the importance of IoT to the current and future business of leading service providers, no matter where they operate in the world. Regarding IoT as a new type of business, service providers are investing in new technologies and establishing new business models for revenue sharing and increased use of indirect channels. They are also creating new delivery models for as-a-service and online services and driving innovation with partners and customers.”