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The impact of IoT on the telecommunication industry
The telecommunication sector is going through a tricky phase right now.
The advent
of the 5G technology augmented with the software-defined virtual networks is
disrupting the industry on one side, opening a new landscape of opportunities.
On the other side, there is tough competition from VoIP-based platforms such as
Skype and Zoom. With an increased commoditization, telecoms are able to cut
prices and stay in the competition. However, they had to take a hit on the
Average Revenue per User (ARPU). Another important challenge is customer churn.
With shrinking IT budgets and high competition, customer retention becomes a
challenge for most telecoms. This is where IoT comes to the rescue.
The
Internet of Things is no longer something extremely new — with the digital
revolution, these technologies have become a commonplace practice and are being
permanently improved and expanded. IoT solutions are actively implemented in
various sectors around the world — in recent years, the role of the use of IoT
in the telecom industry has strengthened significantly, and this trend is
expected to continue across the board. According to statistics, the total IoT
market worldwide was estimated at approximately $389 billion and is predicted
to grow to over $1 trillion in 2030. In addition, the number of devices
connected to the Internet of Things worldwide is forecast to triple over this
period of time. The results of studies show that the IoT can save businesses
$1.2 trillion — and that’s just the performance cost. Furthermore, the crucial
point is that investments in IoT come back from the first days of
implementation of the solutions — this is achieved through cost savings. And
this is important both for telecom startups and for leading enterprises.
Telecom industry statistics confirm the growing popularity of the Internet of
Things and its practical implementation: a few years ago, 71% of IT and telecom
companies embraced IoT, and as of today, the percentage of this penetration
continues to increase. And are you already gaining with IoT technologies? IoT
platforms are used in different use cases and for various business goals. Among
the global telecom players that have already experienced the benefits of
implementing IoT-based end-to-end solutions are O2, AT&T, Telefónica, NTT
Docomo, SK Telecom, Vodafone, Deutsche Telekom, and others. For example, the
American multinational telecommunications conglomerate AT&T was able to
reduce the energy consumption by 9 million kWh per year thanks to energy
management using the Internet of Things, saving almost one million dollars. And
Spanish telecommunications company Telefónica, for instance, has succeeded in
transforming its business with IoT technologies, and the company now has more
than 10,000 IoT clients for whom it manages more than 40 million connections
across various technologies. So, innovative, progressive, and personalized
approaches are a priority. Today, the implementation of IoT-based initiatives
is a must for telecom businesses striving to embrace the digital age, get a
strong competitive advantage, and make the most of the possibilities that
modern technology offers.
Telecom
companies have been capitalizing on the growth in numbers of IoT devices (38.6
billion of which are forecast to be in use around the world by 2025). Their
greatest advantage is the existing infrastructure of internet cables and mobile
phone towers, which serves as the ground for creating new solutions and
services based on 5G and IoT technologies. Thus, telco operators maximize the
opportunities of developing massive ecosystems of interconnected devices and
people, and enabling their seamless communication. Many telecom service
providers have already started developing IoT-based services and products to
satisfy the needs of customers from various vertical markets.
How
does IoT help Telecom Companies?
IoT
technology is rapidly evolving. Telecoms can take full advantage of IoT
networks as they already possess the infrastructure in the form of mobile phone
towers and internet cables. When 5G is added to it, telecoms can build
high-speed networks with low latency and accommodate a wide range of IoT
devices wherein seamless connection is established between interconnected
devices and people in the massive ecosystem. Telecoms can build IoT platforms
that enable customers to connect and manage multiple endpoints and run IoT apps
while managing the infrastructure from a central dashboard. IoT with 5G offer
high-speed networks with expanded bandwidths and low latencies to run real-time
processes. Energy efficiency is a big advantage as companies can run millions
of connected devices with minimal power consumption. With an IoT platform,
telecoms can reduce churn while gaining new customers to increase revenues.
Moreover, they can create new job opportunities and thereby contribute to the
growth of the local economy as well.
IoT
Use Cases for Telecom
While
the basic functionality of IoT for telecoms is to provide connectivity services
for the customer IoT devices, the use cases can be extended to
industry-specific end-user apps as well. IoT in home automation enables
customers to control electronic devices at home using mobile apps or voice
assistants. Remote Asset Monitoring of physical assets such as orders,
vehicles, patients etc. using a mobile application in real-time, benefitting
healthcare, retail, logistics and several other industries. Telecoms can
perform Data Storage and Management (backend processes) for client
applications. Data Analytics services comprising storage of IoT-generated data
and delivering actionable insights to clients using AI/ML algorithms. Telecoms
can offer cloud-based PaaS and SaaS services wherein clients can use IoT-based
platforms to develop, deliver and manage software. Build smart cities with
autonomous vehicle systems
Choosing
the Right IoT Platform
As
the IoT industry is still in the nascent stage and evolving, telecoms have to
either build a custom IoT platform from scratch or customize a public cloud IoT
offering. When you choose to build a custom IoT platform, you get the
flexibility and feature-set that tightly integrates with your existing
infrastructure. However, it is a time consuming and costly affair. In addition
to development costs, you should also consider the fact that you need to build
and manage your own cloud. Alternatively, telecoms can customize AWS IoT or
Azure IoT platforms quickly and reduce initial investment costs. The advantage
of public cloud IoT platforms is that you can use extensive network services
that are secure and reliable. However, you’ll incur cloud usage costs.
Telecoms
struggling with increased competition and reduced margins can tap into new
revenue streams by exploring IoT capabilities for the telecom industry. Not
only can telecoms reduce customer churn but they can expand their services and
solutions to gain a competitive edge in the market with IoT solutions.
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