LIVE FROM GSMA MOBILE 360 MIDDLE EAST: Operators must play to their strengths and use the reputation of trust established with customers if they are to benefit from the $4.3 trillion Internet of Things (IoT) market, agreed keynote executives in Wednesday’s opening conference session.
Machina Research’s Matt Hatton kicked the session off by heralding a booming opportunity in IoT, predicting 27 billion connections by 2024. But, he warned, “telcos haven’t been particularly good at pivoting from traditional core services to new data services.”
This was a point picked up by Huawei’s Safder Nazir, Regional VP – Smart Cities & IoT: “Operators need to make sure they secure this space. Operators aren’t the most nimble and agile players. It’s important they understand what the market is about and work with regulators to make sure this space doesn’t become cannibalised.”
Bob Fox, Global Industry Leader – Telecommunications, Media and Entertainment, IBM Global Business Services, urged operators to focus on “what they’re good at… they need to think about the skills they used to get to where they are today and what they need to use in the future.”
Fox cited IBM research that put telecom operators in the top 3 most trusted industry players when it comes to protecting customer data. “That’s a huge asset. The telco can present itself as the trusted data source, keeping it all secure, protecting privacy rights and providing a high level of security. It’s not sexy and front page of The Economist but it’s something that consumers see and a hugely valuable asset we need to see more of in the development of IoT.”
“Operators have access to this data,” agreed Graham Bradley, Senior Director- Mobile and Smart City Solutions, INRIX. “The operators are the only game in town with access to that volume of data. That data can be used to the benefit of developing a smart city. An operator is in a good position to be the gatekeeper of that. That is a change though – they have to take on new skills.”
This was an opinion received well by Ooredoo. “It could be our role but we need to select what kind of data we use. It could be our role to play the part of trusted partner,” commented Jurgen Hase, M2M director at the operator. “Data is gold. But we need to treat it in a private and secure way.”
Ooredoo’s Hase (pictured, far left) also stressed the importance of educating the market on the benefits of IoT. And he doesn’t believe it should be the role of an operator to develop future products and services in this space. Instead, he used the example of Apple’s App Store, whereby the Cupertino-based firm provided the platform for innovation and ended up disrupting the entire mobile market.
“Apple doesn’t develop apps – it provides a platform for it. We have to develop an enabler platform [for IoT] that will drive the market and help produce innovation. It will only work if it’s much more crowd driven so they can develop the IoT applications. We have to enable the business.”
Wi-Fi in every device
One challenge for operators highlighted by the panellists is managing the sheer volume of devices that will be connected over various forms of access technologies.
“We haven’t seen anything yet,” stated Hakam Kanafani, board member and chief adviser to the chairman, Turk Telecom (pictured, far left). “The amount of data and devices being connected to the internet is not yet perceived in terms of size. It requires a vision from the telcos today to see what’s happening and what is the trend. Ten years ago the vision was a SIM card in every pocket. Our vision is Wi-Fi in every home and office and Wi-Fi capability in every device. Everything is going to connect with everything. The big question is will our DNA change and improve to a different business model or are we still stuck in the past?”
IBM’s Fox struck a similar chord: “Operators have to secure a very broad base of the connectivity opportunity – it’s the natural way of the service providers. They are doing an OK job of that, and their role so far is in SIM cards and licensed technology. But in future the bulk of connections won’t be like that – it’ll be Wi-Fi in homes and offices and low power networks. So this is a new challenge for CSPs – how do they manage licensed spectrum, low power wide area networks, and WiFi networks to provide a rich bundle of connectivity? Some of these will be worth $10 per month, some of them $1 a month. But the opportunity there is to secure the connectivity space. There is a role [for operators].”
If operators can get it right, it seems there’s a big reward for them in the IoT space. Turk Telecom’s Kanafani revealed that it is already generating 19 per cent of its revenue from “value-added” IoT projects. “Of course, there are some projects that are not high EBITDA, but there are some that are,” he noted.