Against the global background of a patchwork and fragmented cellular landscape described in my earlier post, the biggest challenge facing MNOs (Mobile Network Operators) is to choose a route towards an entirely new, globally connected market. There are costs associated with spectrum licensing and infrastructure deployment and a complex mix of consumer vs. IoT (Internet of Things) servicing capability issues, not to mention the numerous cultural, political and existing competitive challenges to consider. Setting all this aside for a moment, how might global services evolve to support the IoT?
Cellular networks have largely evolved to service home country consumer and corporate requirements. Mobile phones generate revenue based on relatively high-margin tariffs - in-country, or occasionally roaming on overseas networks when the customer travels overseas. This is a very different service proposition to IoT devices, which are intended to play a critical role in business processes, while also becoming products integral to global brands.
Enterprises will continue to accelerate their global reach as their products evolve. Products and services seek new markets and evolve to meet local market needs on a global basis. Enterprises at the OEM (Original Equipment Manufacturer) level and product design level continue to seek out manufacturing and distributing products and services that minimise costs and optimise margins.
The digital element of products and services is increasing in value and importance. Data flowing from end points and assets; the analytics around that data; warranty, servicing and R&D impacting data; all of these are points of revenue generation, leading some to call data "the new oil". Some major companies have even incorporated the word digital into their brand name - GE Digital, for example. This shows a growing awareness of the importance and value of data. However, to get data from end point to analytics requires connectivity; robust, secure, easy to manage and cost-effective connectivity. MNOs who can provide this as an enterprise solution will find that the result is a serious product and service value enhancement and an immense competitive differentiator.
As SIM card technologies transition to become an embedded component and ultimately a "soft-sim" form factor, it is only natural that enterprises pursue the ability to "assemble once - deploy (distribute, sell and enable end use) anywhere". If this is to happen then traditional cellular connectivity models need to change.
The challenge lies in the "deploy anywhere" mandate - with the newer eSIM (embedded SIM) and eUICC (embedded Universal Integrated Circuit Card) technology, the need to "date" the SIM as "owned and controlled" by the incumbent MNO has largely dictated where any particular SIM can be deployed on owned, allianced, associated or affiliated networks. This has ultimately restricted parity-market rate tariffs, as well as constraining enablement of connectivity beyond coverage footprints of those existing networks.
To date, those MNOs that have serviced their rapidly-globalising customer base have done so through their legacy infrastructures, legacy technology platforms and relationships with other operators in different regions. This is increasingly being viewed as an outdated and inefficient approach which is fast running out of acceptability with enterprise procurement departments.
In my next post, I will show you how rapidly-emerging technologies, such as Stream's IoT-X, are offering a comprehensive set of solutions to these challenges and how this will deliver a new, non-disruptive experience for customers and providers alike.