Feature Article

March 20, 2017

IoT Opportunities are Coming for MNO, But When?

By Special Guest
Medhat Mahmoud, Sr. Director, Technology & Strategy, IoT solutions, US Competence Center, Carrier Business Group, Huawei Technologies USA

IoT has become a focus area for most Mobile Network Operators (MNOs) worldwide. Yet, the fundamental question still remains: when will IoT business opportunities for MNOs achieve volume and scale? 

First, let’s be clear: IoT is not just an isolated business segment, but it is an integral part of a broader digital transformation strategy. Some operators are already in an advanced stage with a matured IoT strategy in place, while others are falling behind or somewhere in between.

It’s no secret that MNOs face challenges with commoditized voice and data markets, while also experiencing saturated subscriber growth. It is becoming more challenging to compete with technology disrupters and global digital platform players that have become technology havens for fresh innovation, investment and financial market attention.  

However, MNOs still have a solid position with regards to the ownership of their customers’ engagement—whether consumers or enterprises.

Before explaining how this can be applied to IoT, let’s look at lessons learned from two examples: 1) digital content monetization and 2) mobile payment in emerging markets. 

For digital content monetization, leading MNOs have realized that a customer engagement content strategy is critical to enable growth and to successfully move up in the value chain. Through media acquisition, partnerships and media content delivery platforms, MNOs managed to attract customers as well as bundle and monetize services. This generated higher data traffic on their network from new packages, along with a combination of subscription based services and/or advertising revenues.

In terms of mobile payment in emerging markets, MNOs, in partnership with the financial sector, have created new purpose-built integrated services around low ARPU customers for mobile payment transactions. These service-enabled and community-driven business models are generating monetary value in multiple ways.

These two examples show that MNOs must focus on integrating IoT value into existing customer data to enable fast and interoperable adoption to move up in the value chain. In addition, leveraging the strong customer base of MNOs and increasing engagement with them is key to success.

Today, MNOs have a significant opportunity emerging from the quantity of detailed customer data.

MNOs will eventually be able to generate long term IoT growth in the broader digital transformation across a wide range of industries.

IoT is generating a new set of data attributes that relate to devices and sensors associated with those customers. Let’s call this device data.

In most IoT applications, we find customers data and device data are intersecting, merging and correlating together to create high-quality customer-device data.

As the IoT market matures, the amount of converged customer-device data, combined with the increasing number of connected devices and sensors, will form a unique IoT opportunity.

The converged customer-device data will proliferate in most areas like connected transportation, automation, smart cities, wearable, healthcare, smart homes and more.

In developing and developed countries alike, this trend will grow and be driven by evolving “community-based” activities. In the industrial and enterprise sectors, we find Information Technology (IT) and Operation Technology (OT) are also merging.

This is where the real IoT value resides. Converging customer and device data will hold many opportunities.

MNOs can play an essential role in leveraging their customers’ ownership and thinking in that direction.  MNOs can enable a few things, including a data contribution and sharing incentive mechanism, IoT data aggregation platforms, developer and API-centric services, secured authentication, on-demand capacity, big data analytics tools with on-the-cloud services and integrated flexible billing capabilities, to name a few.

As a result of the fast pace of technological innovation, , falling hardware costs, shrinking power requirements, increasing standardization and the advent of cloud based services, open network modernization, big data and 5G, the amount of valuable converged customer-device data will only continue to exponentially increase.

New business concepts such as a shared economy, blockchain and artificial intelligence will only accelerate this shift.    

MNOs have the power to facilitate fast partnership models and acquisition strategies to adopt a data-driven mindset. The ability to develop “real” innovation and an “open” collaboration culture will help to build a customer-centric infrastructure in an integrated eco-system – only further enabling hyper growth.

Every customer can be an IoT revenue generator. The day will come when success will be measured by the number of IoT connections per hundred customers’ ratio.

This won’t happen overnight, as is dependent on how fast and open MNOs strategies adapt.

Edited by Ken Briodagh

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