LIVE FROM GSMA MOBILE WORLD CONGRESS AMERICAS 2017: AT&T is yet to publicly release revenue figures from its Internet of Things (IoT) business, but the operator’s president of IoT Solutions Chris Penrose said sales are ramping well thanks to a strategy of diversification.
There has been some scepticism in the market regarding the revenue potential from the IoT. How much can operators really make, the question goes, if they’re only pulling in $2 per device for connectivity?
But Penrose told Mobile World Live AT&T is pushing beyond the connectivity layer to turn IoT into a real money maker.
According to Penrose, year-over-year growth in the operator’s IoT segment – which includes solutions for verticals like smart cities, fleet management, utilities, water management, and security – is “very strong”.
That’s partly because AT&T is pulling in higher average revenues per customer by offering software-as-a-service and end-to-end solutions.
“We’re making revenue in a lot of different ways,” Penrose said. “Obviously we make revenue off the connectivity, but we’re doing a lot more than connectivity. There are places where we’ve gone completely end to end, where we’ve created full end-to-end solutions, where we have not only hardware, but the software and the connectivity bundled together. That’s where you begin to see much higher ARPUs and revenues associated with those things.”
Penrose used a fleet management solution as an example, where AT&T can offer hardware, software, and connectivity for around $20 per month.
On the connected car front in particular, Penrose said AT&T has been able to bifurcate its business model to double its revenue streams. The operator, he said, can charge automakers for the wholesale connectivity to pull information off the vehicle, update over the air, and offer remote services, but can also turn those vehicles into Wi-Fi hotspots with separate connectivity billed directly to end users.
AT&T is also turning up offerings including IoT security and lifecycle management, he said, further extending its portfolio of revenue generating services.
“Every vertical has got multiple different ways in which we can drive revenues, and the exciting thing, again, is that every one of these is scaling and they’re not just scaling domestically, they’re scaling around the world,” Penrose said.
AT&T completed deployment of its low-power US LTE-M network earlier this year and is on track to finish its roll-out of the same in Mexico by the end of this year. Penrose noted several operators in Canada have plans to launch LTE-M networks of their own in the near future, which he said will help give AT&T a full North American footprint through roaming partnerships.