It always is a bit tricky to figure out what the internet of things means for retail connectivity and edge services providers. Much of the total IoT revenue will be earned by suppliers of computing infrastructure or devices, applications or system integration and consulting services, not “new connectivity” or “edge computing as a service” revenue.
“Connected devices” do mean some potential upside for sales of more connectivity accounts. The issue is “how much?” Likewise, use of more IoT sensors also increases demand for edge computing, and the issue there is how much incremental revenue exists for computing on premises or remote servers, as opposed to “onboard” processing.
According to Berg Insight, the top ten mobile operators reported a combined active base of 1.33 billion cellular IoT connections at the end of 2019, accounting for 85 percent of total industry connections.
China Mobile was at that point the world’s largest provider of cellular IoT connectivity services with an estimated 683 million cellular IoT connections. China Unicom and China Telecom ranked second and third with 190 million and 157 million connections respectively.
Vodafone reported 97 million connections, AT&T with 66 million, while Verizon, Deutsche Telekom and Telefónica had in the range 24 million to 46 million cellular IoT connections.
Orange and Telenor had 17 million and 16 million connections respectively. Year-on-year growth rates for the Western operators were in the range of 10 percent to 30 percent.
But not every connected sensor requires a wide area network connection of its own, and might use a local communications link of some kind, such as Bluetooth or Wi-Fi. On the other hand, it is likely going to be more common that IoT sensors will use edge computing, onboard, on a nearby device, a premises server or a nearby off-premises server.
Also, not all connected devices are necessarily IoT devices. Some connectivity supplies might count tablet or PC connections in the same category as sensor connections. Not all would agree that is the right classification, though in the long term it should not matter, as such cases will be a small fraction of total IoT connections.
In the recent past, devices such as smartphones, tablets, PCs and workstations were counted as connected devices by some analysts. That perhaps matters for the Wi-Fi ecosystem and its suppliers, but has not direct revenue implications for connectivity service providers.
In other words, among the things that matter when looking at IoT revenue upside for connectivity providers is the new demand for wide area network connections. Also important are any related moves by mobile and other connectivity providers into edge computing as a service or other edge computing roles.
“Mobile operators looking to increase IoT revenues increasingly focus on adding cloud services and security capabilities on top of their connectivity offering,” Berg Insight noted.
That said, it is doubtful that IoT revenues are much more than one percent to two percent of any mobile operator's total revenue, at the moment. Many observers expect that to change over time, as IoT devices become far more numerous than phones and other connected devices.
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