Internet of Things ( IoT ) : Why it matters to Telcos !!


The convergence of efficient wireless protocols, improved sensors, cheaper processors, and a bevy of startups and established companies developing the necessary management and application software has finally made the concept of the Internet of Things (IoT) mainstream. The number of Internet-connected devices surpassed the number of human beings on the planet in 2011, and by 2020, Internet-connected devices are expected to number between 26 billion and 50 billion.

As with many new concepts, IoT’s roots can be traced back to the Massachusetts Institute of Technology (MIT), from work at the Auto-ID Center. Founded in 1999, this group was working in the field of networked radio frequency identification (RFID) and emerging sensing technologies. The labs consisted of seven research universities located across four continents. These institutions were chosen by the Auto-ID Center to design the architecture for IoT.

The vast majority (80%+) of IoT connections will occur on unlicensed wireless frequencies due to cost and battery life advantages. Whereas cellular IoT connections are expected to grow at a nearly 20% CAGR for the next several years, various personal area network (PAN) wireless connections (Wi-Fi, Bluetooth, Zigbee) into M2M (machine-to-machine) end markets should grow closer to 30%. Aside from significant growth in PAN-based chipsets, some experts view the microcontroller and sensor opportunities as meaningfully positive with industry forecasts of single-digit growth potentially being too pessimistic.

In any case the IoT $ opportunity is not lost to Telcos and the senior execs are making noises now while others are forging ahead. Some Operators have already taken the lead in supporting such global service launches in early market categories such as automotive, health and consumer electronics. With the emergence of new products in adjacent categories such as healthcare, wearables and consumer electronics the importance of the ability to support large-scale global deployments is likely to accelerate.

“ From an ATT perspective, we are providing an end-to-end (E2E) platform that enables a unified experience across a wide range of devices and one-off capabilities in the market today. There’s a lot of noise in the marketplace that can make it complicated for a consumer or a business to make sense of this notion of the Internet of Things. It is important for us to show real benefits, whether you’re a consumer or business “ (Kevin Petersen, ATT Digital Life President )

Acording to Cisco IBSG there are several barriers, however, have the potential to slow the development of IoT. The three largest are the deployment of IPv6, power for sensors, and agreement on standards. It is important to note that while barriers and challenges exist, they are not insurmountable. Given the benefits of IoT, these issues will get worked out. It is only a matter of time.The challenge for operators is to find a business model that delivers value for customers and is profitable.

A significant part of their challenge is determining what an IoT network architecture and business operation should look like. These dilemmas need to be resolved quickly because, within the next five years, serving the IoT market will become the critical mission for any communications service providers.As industries such as automotive, utilities, transport and logistics feel the competitive pressure of IoT, the scramble for partners to help them will accelerate. One of the principle capabilities these companies will seek of their partners will be their ability to deliver complex solutions quickly.

Telcos are busy assessing alternative options for new Low-Power Wide-Area (LPWA) networks, since the connectivity revenues alone from these networks are exceedingly low: typically USD2–3 per device per year, but below USD 1. With such low revenues on offer, Telcos are wondering whether they should invest in LPWA networks. GSMA believes that while connectivity will underpin the development of the Internet of Things, to avoid becoming commoditised, mobile operators must leverage their networks’ potential to provide value added services and build what could become a US$422.6 billion industry. In the case of the overall market revenue of US$422.6 billion, the majority of these revenues are to be derived from the ‘Service Wrap’.

The ‘Service Wrap’ comprises the service that the end customer pays for that relies on the underlying connectivity, and operators are investing in building new capabilities that improve their offering to IoT service propositions. Examples include horizontal capabilities such as remote provisioning of IoT devices, building platforms that allow for management of business rules, reporting, support for Application Programming Interfaces (APIs) and the management and presentation of data. Moreover, ‘Big Data’ analytics is set to become a key part of IoT services in the future, with operators increasingly looking at ways to analyse data from various sources and create new service lines.

Telefónica has launched a modular internet of things platform called Thinking Things, which consists of stackable modules for a variety of purposes.There will be many sensors, actuator modules and so on to come, but the first manifestation of the new platform is an “ambient kit pack” that includes a communications module with an embedded SIM, a module for measuring air temperature, humidity and ambient light, and a battery module that can be charged via microUSB (the battery modules,which can charge 1,000 “communications” per charge, ) can themselves be stacked.

This will let users remotely control the temperature, lighting and humidity of their home or office, though that only applies to lights, heaters and humidifiers that are plugged in at the wall, rather than fixed units. That use case will probably also require the smart plug module that Telefónica will release early next year, allowing users to turn devices on and off, dim lights and measure energy usage. Telefónica has released modules for sensing presence, impact and audio, and notifying the user via LEDs.

The IoT will increase the range of services, each requiring varying levels of bandwidth, mobility and latency. For example, services that are related to public safety or personal safety will generally require low latency, but not high bandwidth per se. alternatively, services that provide surveillance might also require high bandwidth. Due to the differing level of service demand, mobile networks may need the ability to identify the service which is generating traffic and meet its specific needs. For example, alert services related to public safety or personal health would require a higher priority compared to metering information, which is a normal monitoring activity.

Expect for every Internet-connected PC or handset there will be 5-10 other types of devices sold with native Internet connectivity. These will include all manner of consumer electronics, machine tools, industrial equipment, cars, appliances, and a number of devices likely not yet invented. In the world of IoT, even cows will be connected. A special report in The Economist titled “Augmented Business” described how cows will be monitored .Sparked, a Dutch start-up company, implants sensors in the ears of cattle. This allows farmers to monitor cows’ health and track their movements, ensuring a healthier, more plentiful supply of meat for people to consume. By the way on average, each cow generates about 200 megabytes of information a year !!

IoT is about all about M2M chatter enabled by millions of radio chips embedded everywhere. In future Artificial Intelligence (AI) and machine learning will grab much of the attention in IoT-related projects. The IoT evolution requires a new and fundamentally different approach for locating IoT devices and then beyond that, securing and sharing their location information. Without those, IoT won’t live up to its potential – and hype. With IoT, wearables and other connected devices, the industry is now moving in a new direction – from convergence bringing everything to smart phones, to divergence connecting everything to the Internet. With this market shift, the industry is screaming for a horizontal, next-generation operating systems that can meet the needs of innovators to deliver a cross-platform connected experience in the IoT era.

Bottom Line : Jump on the IoT bandwagon for the right reasons. Be prepared.. its not an trial initiative but a way of life !!

Sadiq Malik ( Telco Strategist )


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