How can telcos benefit from IoT?

By Nitin Bansal

In the ‘networked society’ all devices that benefit from an internet connection will be connected empowering every person and every industry to reach their full potential. Ericsson predicts there will be around 28 billion connected devices by 2021, of which more than 15 billion will be connected M2M and consumer-electronics devices. Internet of Things (IoT) technology is a key enabler of this vision by delivering machine-to-machine (M2M) and machine-to-person communications on a massive scale.

The IoT revolution offers huge potential value in terms of improved efficiency, sustainability and safety for industry and society. Analysts predict that the total added value of IoT will be $1.9 trillion by 2020.

The variety of applications and solutions designed for individuals, business and industry is stimulating the rapid expansion of the IoT market. IoT is playing a major role across a variety of vertical sectors, generating cost savings, new revenue streams and other benefits.

As they are largely responsible for wireless connectivity on a global scale, operators are in an excellent position to capture a share of the added value generated by the emerging IoT market. The size of this share will depend on the role that operators adopt in the value chain.

This could range from being a straightforward connectivity provider (monetizing connectivity in new ways), all the way to being an end-to-end solution provider of turnkey solutions to vertical markets.

IOT Use Cases

There will be a wide range of IoT use cases in the future, and the market is now expanding towards both massive IoT deployment as well as more advanced solutions that may be categorized as ‘Critical IoT’. Some use cases for massive IoT will include smart buildings, logistics, tracking and fleet management, capillary networks, smart agriculture and smart metering etc, from a business perspective, massive IoT will substantially reduce the end-to-end cost and energy consumption for enterprise players. Critical IoT will thrive on reliability, availability and low latency. These use cases are enabled by LTE or 5G capabilities. Hence, the volumes are typically much smaller, while the business value is significantly higher.

Some use cases for critical IoT will include remote health care, traffic safety and control smart grid automation, industrial application and control, remote manufacturing- training surgery etc.

Advantage Cellular Technologies

A large share of connected M2M and consumer electronic devices will be applications served by short-range radio technologies such as Wi-Fi and Bluetooth, while a significant proportion will be enabled by wide area networks (WANs) that are primarily facilitated by cellular networks.

Uptake of massive IoT is set to take off, and operators have a unique opportunity to drive the implementation of new IoT applications by offering affordable connectivity on a global scale.

When it comes to scalability, cellular networks are built to handle massive volumes of mobile broadband traffic; the traffic from most IoT applications will be relatively small and easily absorbed. Operators are able to offer connectivity for IoT applications from the start-up phase and grow this business with low TCO (total cost of ownership) and only limited additional investment and effort.

Operation in licensed spectrum also provides predictable and controlled interference, which enables efficient use of the spectrum to support massive volumes of devices. Cellular connectivity offers the diversity to serve a wide range of applications with varying requirements within one network.

While competing unlicensed LPWA technologies are designed solely for very low-end MTC applications, cellular networks can address everything from massive to critical IoT use cases.

Quality of Service (QoS) mechanisms will be essential for many IoT applications. Cellular systems have mature QoS functionality, and this enables critical MTC applications to be handled together with traffic from sensors, voice and mobile-broadband traffic on the same carrier.

QoS, along with licensed spectrum as described above, provides a foundation for long-term Service Level Agreements (SLA) with a specific grade of service.

Conclusion

Operators have a huge opportunity to benefit from the emerging IoT revolution, operators can choose to continue offering telecom-grade connectivity as they do today, or they can evolve to become a platform of fully-fledged IoT service provider targeting a larger slice of future IoT revenues.

For IoT applications, existing cellular networks offer distinct advantages over alternative WAN technologies, such as unlicensed LPWA. The global reach, QoS, ecosystem, TCO, scalability, diversity and security of cellular networks are all vital factors that can support the fast uptake and success of IoT.

3GPP standardization work for GSM and LTE, and the recent addition of NB-IoT, is further improving the ability of cellular networks to address the Massive IoT market, where ultra-low end-to-end cost is a prerequisite.

New downsized NB-IoT (IoT on Narrow Band) and LTE-M chipsets, designed for MTC, and features that improve both coverage and device battery life will boost the ability of LTE infrastructure to address the IoT market.

One network that supports all applications – from advanced mobile broadband services, VoIP and all kinds of low- to high-end IoT use cases – creates a very strong value proposition. Whether operators choose the GSM, NB-IoT or LTE-M track – or a combination of these – will depend on several factors such as technology coverage, future technology strategies and targeted market segments.

(The author is Head of Network Products at Ericsson)