INGENIEUR
supplant companies in other industries. Examples
include IoT service innovations in logistics and
retail. Google, Amazon, and Alibaba are morphing
from providing data analysis functionality to
specialized intelligence and smart applications
that can transform traditional industries.
Telcos: Leaders in connectivity
Telcos’ IoT strengths lie in network connections;
for example, NB-IoT and 5G sit at the core of
China Mobile, AT&T, and Verizon’s big connectivity
strategies. In 2013, AT&T released its security-
focused Digital Life smart home service, before
moving to Internet of Vehicles ( IoV) and the M2X
capability-opening platform on which it aims to
operate one-third of its IoV in the US. In its 2020
strategy, China Mobile focuses on big connectivity,
aiming to deploy an IoT ecosystem using its vast
superiority in connectivity and its OneNet IoT
platform, which currently hosts 5.6 million devices,
27,000 developers, and 10,000 applications.
Vodafone has transformed from selling SIM cards
to selling services, expanding its geographical
coverage and value along the way.
It’s difficult for telcos to form a profit model
from connectivity alone. Constructing a data
platform based on connections can accelerate
innovation. But, to create successful business
models for IoT, telcos must monetize platforms
and applications.
IoT is an extremely complex ecosystem.
Horizontally, it covers all industry sectors and
vertically it includes all links, that is, terminals,
pipes, data, and cloud applications. The first step
of an IoT strategy is to select the industry sector
and focus, and then define the vertical depth of
capabilities, competence, market structure, and
business models.
Thanks to strengths in connectivity and
carrier-grade security, reliability, localization,
and Exchange-to-Exchange (E2E) services, the
horizontal industries in which telcos shine are
smart homes, security in smart cities, and IoV.
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Vertically, they need first to focus on network
construction and find areas where they excel,
so they can gradually build data capabilities and
develop application platforms.
Telcos’ IoT strategy can be divided into three
stages:
Stage one: Connection
Build a robust NB-IoT full-coverage network that
expands from LTE to IoT connections and tests
5G; test near-field IoT network integration with
technologies such as Bluetooth, Wi-Fi, and ZigBee;
collaborate with leading service providers on IoT
applications; and open up network capabilities
using Application Programming Interface (APIs) to
support innovations for quick breakthroughs and a
leading network position.
Stage two: Data
Innovate to overcome bottlenecks due to the
complexity and diversity of IoT services, and
exploit opportunities in precision innovation, smart
operations, and lean management; build networks
that integrate pipes and cloud based on a central
platform that makes the dumb pipe smart; and
construct a smart data platform to support service
innovation and precise customer services.
Stage three: Applications
Build converged application platforms based
on the power and scalability of data platforms
that run like Internet app stores to spark service
innovation in IoT stores; position ecosystem
innovation as a strategic control point; and shift
positioning to monetize network connections.
Now is the time
2017 was a turning point. Telcos must capitalize
on their strengths and strategies to build
new ecosystems, transform towards IoT, and
embrace the arrival of a new wave of blue ocean
opportunities in the nascent home Internet and
industrial Internet domains.