• While IoT services and connections are growing, GlobalData forecasts that connectivity revenue growth (five-year CAGR of 6%) is lower than other aspects of IoT growth (five-year CAGR of 10%). This is partly due to lower ARPU as IoT connectivity (e.g., for LP-WANs) becomes less expensive.
• To expand services and add revenue, operators are partnering with vertical industry experts, adding technology enhancements to improve operations and customer ease of use, and offering edge services and private networks that complement IoT solutions.
Over the last six months, IoT announcements from AT&T, Verizon, Deutsche Telekom, Orange, Telefónica, Vodafone, Tata Communications, and Telstra included the following:
• There are many potential use cases in the enterprise for generative AI, but many will be enabled by existing cloud solutions.
• Some use cases requiring real-time responses may emerge, generating modest demand for MEC and/or 5G services.
Expectations of demand for 5G and multi-access edge computing (MEC) services from the enterprise segment are established – in part – on enabling artificial intelligence (AI) to be used in real-time applications. AI requires considerable computing power, usually achieved in the cloud where its demanding requirements can be scaled, but where such resources are too distant (due to network latency) to be relied upon for use cases where seconds or milliseconds in application response time can determine success or failure. There are other reasons why MEC makes sense in this scenario, including both the security benefits and cost savings achieved by not sending massive amounts of data to and from the cloud. With the recent hype around generative AI and the potential impact on various professions, industries, and organizations, it is worth considering whether its uptake will mean even more demand for MEC and/or 5G.
• When Ericsson acquired Cradlepoint in 2020, the latter was focused on enterprise wireless WAN equipment, which was considered an emerging business for the network infrastructure vendor.
• Now Cradlepoint is at the heart of Ericsson’s enterprise strategy, bringing diverse channel partners and new products with which to flesh out offerings to meet a growing demand for wireless connectivity.
When Ericsson acquired Cradlepoint in 2020 for approximately $1 billion, the latter vendor specialized in wireless WAN solutions. It offered 4G/5G mobile and fixed site cellular routers and adapters, vehicle and IoT routers, and network management software available via a cloud-based software-as-a-service platform, featuring zero-touch onboarding. At the time, it had approximately one million subscriptions among US and global enterprises, SMBs, and public sector businesses. Cradlepoint was initially part of the Ericsson Business Area Technologies & New Businesses business unit and sold its products indirectly to businesses through a diverse channel of 1,500 system integrators, CSPs, and resellers, augmenting Ericsson’s traditional channel (and primary customer base) that had long been dominated by CSPs.
• The details are still unclear, but the Malaysian government’s announcement on dual 5G networks is a positive move that can accelerate 5G developments in the country.
• Telcos should start collaborating and get more involved in the second 5G network for greater control of the infrastructure.
The Malaysian Communications and Digital Ministry recently announced that 5G rollout in the country will move to the second phase, in which Malaysia will have a dual network model upon reaching a population coverage of 80% of the first network. Having dual wholesale networks is still far from ideal compared to separate deployments by the telcos. However, it is a very positive move from the single wholesale network (SWN – for more on SWN, please see “Malaysia 5G Through SPV: One Step Forward and Two Steps Back,” March 8, 2021) as it will provide wider options for telcos/service providers and enable them to differentiate. It can also drive 5G development and accelerate innovations in creating new applications and use cases. All major local telcos (e.g., CelcomDigi, Maxis, and Telekom Malaysia) have already voiced their support for the dual networks while the largest player, CelcomDigi, has announced it will withdraw its equity participation with Digital Nasional Berhad (DNB – i.e., the current SWN provider).
• Several high-profile vendors of enterprise IoT platforms disbanded their offerings in 2022/23 as products commoditized, margins shrank, and/or some platforms never generated sufficient revenue.
• However, the overall IoT market is still healthy. On the platform side, existing vendors are enhancing feature sets and vertical players are becoming leaders.
Since 2018, the size and scope of the IoT platforms market has grown. These platforms facilitate deployment and management of IoT projects and provide tools to develop and run IoT applications. However, high-profile dropouts that have disbanded their platforms have plagued the market recently. GlobalData has the position that this does not indicate softness in the IoT market overall. However, it does highlight a trend in which vendors blend IoT with adjacent solutions or use a third-party platform go-to-market approach rather than maintain their own expensive platforms, which may not yield sustainable margins.
• GlobalData’s Private LTE/5G Wireless Network Services report update shows mixed results for the last six months as operators faced increasing competition from system integrators, network equipment, and infrastructure vendors; several operators publicly acknowledged slower than anticipated momentum.
• In spite of this difficult competitive environment, most operators enhanced offerings or struck alliances to help boost the likelihood of opportunities down the road. All still consider private wireless networks to be a substantial revenue opportunity.
The public announcements below were made between September 2022 and February 2023 and disclosed a mixture of technology and go-to-market alliances, a few new customer trials or commercial deals, some unique offerings for specific segments or verticals, and adjacent network or technology advancements that should have a positive effect on future private network momentum.
• US operators don’t generally make announcements at MWC, as it tends to be more of a European and international event. They often show up to meet analysts and potential customers, but rarely note new service launches. T-Mobile, however, made three key announcements.
• At MWC, T-Mobile further illustrated that it is increasingly aligned with Deutsche Telekom. Its announcements make clear it is taking every opportunity to showcase initiatives across developer, enterprise, and 5G network services.
T-Mobile made three announcements (so far) at Mobile World Congress (MWC) 2023. On Day 1, the ‘Un-Carrier’ announced that Cisco and T-Mobile will offer businesses Cisco Meraki’s first-ever 5G cellular gateways for fixed wireless access (FWA), the MG51 and MG51E. In addition, Deutsche Telekom and T-Mobile US introduced network application programming interfaces (APIs) and a joint developer platform in Germany and the US. On Day 3, T-Mobile announced higher speeds and Apple support for its 5G standalone (SA) network.
• GlobalData’s February 2023 report highlights how IT service providers play a key role in delivering IoT services for enterprises, eliminating many cost and complexity barriers with a one-stop shop, providing access to leading vendors for IoT use case and vertical expertise, and offering consulting and professional services to smooth the deployment path.
• Recent acquisitions of technology vendors as well as new partnerships in adjacent digital transformation technologies to IoT enhanced the ability of ITSPs to positively effect market growth and successful deployment outcomes.
IT service providers (ITSPs) play an important role in delivering IoT services to enterprises, offering a way to deal with cost and complexity barriers with a one-stop shop, provide access to a set of technology and go-to-market partners for key use cases and verticals, and provide consulting and professional services to smooth the path for hesitant customers. Over the last six months, acquisitions and technology partnerships enhanced this proposition, adding capabilities in adjacent technologies to IoT such as AI, machine learning, and digital twins, as well as gaining expertise (and existing customers) in relevant verticals such as manufacturing, warehousing, and supply chain management.
• Etisalat by e& is making moves to share its expertise with telcos across the world that may not be able to afford next-gen B2B services.
• Etisalat by e& will look to increase its B2B credentials through a network of partners beyond its operational footprint without having to go through complex M&As.
UAE telecoms incumbent Etisalat by e& (e&) has launched its new business program called ‘e& Partner Networks.’ The move is an attempt by the operator, which is sitting on large piles of cash reserves, to increase its influence on the global stage as a credible B2B partner.
• GlobalData’s report on global enterprise mobility services highlights a dynamic market. After several years in which offerings such as unified endpoint management and telecom expense management had commoditized and remained static, 2022 was an encouraging year.
• 5G services, edge computing, fixed wireless access, mobile private networks, and a sustainable spin on device lifecycle management were among the key enhancements.
2022 stood out as a time when new connectivity options became more widely available, including public and private 5G; edge computing for low latency and workload optimization began to bear fruit; integration of wireline security operations with unified endpoint management (UEM) became more commonplace; new initiatives were launched linking sustainability with device lifecycle management, and fixed wireless access (FWA) for businesses gained traction. Mobile private networks also continued to gain traction with new reference customers, use cases, and vertical opportunities.
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