IoT 3 mins read

CSP Reinvention Proves Tricky

CSPs need to reinvent themselves, but observations indicate they are making slow progress – hindered by a lack of IoT standards and the complexity of the IoT market.

Laurens de Nooyer Laurens de Nooyer

The Internet of Things has been thrown into focus for communications service providers (CSPs), thanks to the relentless rise of new types of connected devices.

The number of connected devices (around 29 billion) has quickly outpaced the number of connected human beings (7.7 billion) today, forcing CSPs to rethink how they use existing and future infrastructure for new solutions and revenues.

As I said in my 2020 predictions blog, telcos face a number of issues from shrinkage of their traditional communications market, to increased capex costs due to 5G. CSPs need to reinvent themselves, but observations indicate  they are making slow progress – hindered by a lack of IoT standards and the complexity of the IoT market. New solutions are expected to help create new revenues, but what are they? Where are they? And how do you monetize them?

We see that 97% of telcos’ B2B customers are experimenting with new technologies and most of them predict that in the next three years these experiments will be part of their daily way of working. The Internet of Things is part of that and is now firmly in their plans for creating new solutions – and consequently new revenues – using existing communications technology. 

Connecting sensors and assets via their mobile infrastructure is often part of the solution stack. Here we already see CSP’s in the IoT ecosystem, creating solutions for many markets such as automotive, manufacturing, and smart cities.

IoT ecosystem

What if CSPs could benefit from the full IoT ecosystem to design new revenue-creating solutions? It is difficult to act in a full IoT ecosystem as it is huge and complex and, based on observations working with telecom providers, it seems every company involved in the ecosystem must create a submap of demands, technology standards, regulations (by region or country), security protocols, customer expectations, individual business models and capabilities to deliver local or global. This is where we see the stickiness of the CSP IoT solution development in many markets, such as water management or smart cities.

With these solutions speed to market is essential to beat new small start-ups. They are able to develop quickly in a niche market with local market knowledge and awareness. For telecom providers this speed to market is challenging, especially with any ambitions for large-scale roll out (reuse and scale business models) with no standards for data exchange, or handling and regulations. Only the connectivity part (2G, 3G, 4G, LoRa, Sigfox, NB-IoT) is mature enough to act in multiple market environments.

CSPs can leverage their brand to create loyalty programs in these channels. Also, CSPs can offer building blocks like connectivity management, hardware management and integration tools to channel customers – who can then create their market solutions based on the CSP’s standard offerings. In this way CSPs can extend their offerings beyond SIM cards and data plans and climb up the value chain.

The best way to begin, as CSP’s say, is at the beginning – with an IoT platform that offers value to their ecosystem and channel partners.