Service providers look beyond connectivity in IoT, says Ericsson

24 April 2018 | Natalie Bannerman

Ericsson finds that global service providers are looking beyond just connectivity solutions as the real differentiators in the internet of things (IoT) space.

In its latest study, Exploring IoT Strategies, Ericsson interviewed 20 global telecoms service providers as they begin to position themselves in the IoT market. It found an IoT positioning framework, which identified service providers’ roles in the IoT value chain. As well as a number of commercial insights, key capabilities required and case studies for each role.

“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,” said Jeff Travers, head of IoT at Ericsson. “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.”

Figures from the report show that 70% of those interview do not have a well-defined IoT strategy and are instead testing various roles within the IoT value chain. Additionally, the service providers interviewed said that mobile IoT and 5G technologies over fixed-line solutions is the real ‘game changer’ in IoT., 80% of IoT leaders are using standards and open APIs to enable third party development in this area.

The report also identified four key service provider role categories, which are: network provider, connectivity provider, service enabler and service creator.

IoT positioning framework - Ericsson report.
Source: Ericsson - Exploring IoT strategies report

Respondents found that while network provider and connectivity provider roles are foundational, it is the service enabler and service creator roles create value in new opportunities.

80% of participants said that they aiming to create value beyond just connectivity either by offering differentiating services or by becoming IoT service enablers or service creators. Value is created by providing differentiating services through sub-roles within the four roles, or by progressively offering end-to-end solutions. It should be noted that only 60% of those interviewed are pursing this service enabler/creator role.

The four sub-roles discovered by the report include: transform, operate, integrate and supply. Transform is concerned with service providers helping to transform their customers business models and operations with IoT, operate sees them managing and providing services for network and business processes, integrate is a role where service providers govern deployment-to-operation lifecycle of networks, connectivity, platforms or applications, and lastly there’s supply where the service provider provides mobile IoT networks, SIM cards, platforms and applications.