30 May 2018
| James Pearce
The GSMA has warned telecoms operators they must look beyond connectivity if they seek to capitalise on the $1.1 trillion revenue opportunity offered by the internet of things.
According to figures from GSMA Intelligence, the research
arm of the mobile industry body, the global IoT market will be
worth $1.1 trillion in revenue by 2025, but connectivity will
make up just 5% of that amount.
By 2025, GSMA Intelligence estimates there will be 25
billion IoT connections – up from 6.3 billion in 2016
- with growth driven largely by demand in industrial segments.
13.8 billion of those connections will be across enterprise or
vertical-specific applications, while consumer IoT applications
will account for 11.4 billion connections, driven by
developments in the smart home market.
Though the connectivity segment will grow, it is platforms,
applications and services that offer the highest revenue
opportunities for operators, it adds.
"As the number of connected consumer devices and industrial
machines grow rapidly, the IoT ecosystem will evolve to become
a trillion-dollar market over the course of the next decade,"
said Sylwia Kechiche, principal analyst, IoT, GSMA
"But the IoT revenue opportunity is shifting away from
simply connecting devices to addressing specific sectors with
tailored solutions, and successful ecosystem players will need
to adapt their business models in line with these market
The platforms, applications and services segment will
continue to increase as a share of overall IoT revenue,
capturing two-thirds (68 per cent) of the total by 2025.
The category includes application services; cloud; data
analytics; and security – all areas that could offer
key revenue opportunities for telecoms operators looking to
capitalise on the growth of IoT.
The remaining 27% of revenue share will come from the IoT
professional services market, which includes the likes of
system integration, managed services, and consulting.
"It’s well understood that connectivity will
represent only a fraction of the total IoT opportunity.
Complementing our IoT connections data with this major new
dataset and analysis on IoT revenue provides a comprehensive
and realistic view on where market opportunities exist for
operators, vendors, integrators, and everyone else playing in
the IoT ecosystem," explained Peter Jarich, head of GSMA