While IoT services and connections are growing, GlobalData forecasts that connectivity revenue growth (5-year CAGR of 6%) is lower than other aspects of IoT growth (5-year CAGR of 10%).
This is partly due to lower ARPU as IoT connectivity, for example, LPWANs, becomes less expensive. There is also increased data usage per connection for which operators may not be compensated. To expand services and add revenue, operators are partnering with vertical industry experts, adding technology enhancements to improve operations and customer ease of use, and offering edge services and private networks that complement IoT solutions.
The IoT services perspective
The Industrial IoT services market has been in transition over the last three years as its role in providing pandemic solutions such as room occupancy and remote monitoring had helped momentum.
There has also been pent up demand since 2020 for expanded deployments of non-pandemic related IoT use cases. Sustainability use cases, private networks, edge computing services, and trials leveraging the high speeds and low latency of 5G have added momentum for IoT services which has continued into 2023.
GlobalData notes that global IoT hardware, software, and services revenues reached $604bn in 2022, growing to $865bn by 2026, for a CAGR of 10%. The services portion of revenues in 2022, which includes connectivity as well as managed and professional services, reached $172bn, with government, utilities, and manufacturing as the top revenue-generating verticals.
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AT&T partnered with Dallas Fort Worth International Airport (DFW) to launch a wireless platform to boost connectivity, including network modernization upgrades and a private 5G network for DFW to meet the rising demand for IoT uses cases. AT&T announced it is the exclusive connectivity provider for Lucid’s line of electric vehicles in North America. AT&T teamed with Ghost Robotics to launch robotic dogs for use cases which improve public safety and national defense. AT&T Business reorganized by bringing its IoT and connected car functions into one unit, AT&T Connected Solutions. AT&T and Geotab partnered to reduce emissions in the transportation sector using AT&T’s IoT services and platform.
Verizon revealed an Edge Discovery & QoS API PoC with AWS, combining Dynamic QoS from Verizon with AWS edge services to help users deploy low latency, high bandwidth applications across use cases such as computer vision, IoT, robotics, autonomous vehicles, and sports and stadium experiences. Verizon extended network virtualization efforts with its first Ericsson virtualized cell site. The operator already has 8,000 cell sites virtualized in its network, with plans for 20,000 sites by 2025.
Verizon notes that 5G and IoT use cases will heavily rely on the programmability of virtualized networks. Verizon formed a global partnership with Wipro to accelerate network modernization and cloud transformation for businesses and accelerate technologies such as AI/ML, 5G, IoT, robotics, blockchain, XR, and voice-assistance. Verizon notes the importance of its network densification initiatives and use of C-Band spectrum to add capacity for mobile video consumption and the growing demand for IoT products and services.
Eseye, a mobile IoT connectivity vendor, entered into an agreement with Orange Wholesale France to enhance its global IoT connectivity services. Eseye will implement new localization capabilities, enabling enterprises to avoid permanent roaming challenges. Orange launched Live Objects, a platform covering the core functionalities for IoT projects, managing connected devices, and analyzing data. The platform can be used by businesses of all sizes and industries. Orange Business announced it was chosen by American electric vehicle manufacturer Lucid Motors to be its preferred European partner for in-vehicle connectivity.
Telefónica allied with Saudi telco stc for cybersecurity, cloud, IoT and big data solutions. Telefónica and Sateliot, collaborated on a connectivity service with dual satellite/5G NB-IoT technology. Telefónica and Pente Networks collaborated on a managed 5G Cloud service to enable advanced use cases driven by convergence of IoT, big data, and AI. Telefónica announced that its efforts with IoT and cloud connectivity in 2022 helped avoid emission of 81.7 million tonnes of CO₂. Telefónica Tech and Contazara, Spain’s leading manufacturer of electronic meters, agreed to deploy 130,000 smart meters for the Spanish public utility.
Deutsche Telekom and Intelsat, a satellite and terrestrial network provider for inflight connectivity, announced integration of Intelsat Flex Enterprise into DT’s cloud based IoT solutions. Skylo, a non-terrestrial network operator, partnered with Deutsche Telekom, to integrate Skylo’s service into DT’s IoT offering to eliminate the need for customers to purchase devices and services from multiple providers. Airgain partnered with Deutsche Telekom to connect its asset tracking devices with DT’s IoT network.
This will allow Airgain to bundle connectivity from Deutsche Telekom IoT with its asset tracking customers across EMEA and the US. In addition to location tracking, Airgain’s asset trackers can monitor motion, temperature, humidity, and light.
Vodafone Business and Serveo launched an urban lighting management project called ‘Light as you Need’ which optimizes energy resources by analyzing mobility patterns using big data, analytics, and IoT. Vodafone and Japanese conglomerate Sumitomo launched a JV named ‘Economy of Things’, an IoT solution in which connected vehicles, devices, and machines can transact with each other via a secure digital platform.
Vodafone will transfer its Digital Asset Broker as well as IP, contracts, technology, and software, into the new business and will own 80% of the new company. Pakistan telco PTCL and Vodafone agreed to bring Vodafone IoT products, services, and solutions to the Pakistan market. Dryad Networks collaborated with Vodafone to bring its early wildfire detection sensors to Spain. Vodafone Business and Lenovo Connect partnered to offer a customized IoT service to allow customers with Lenovo devices to use Vodafone Business IoT SIMs to connect to Vodafone’s global IoT network.
Asia Pac announcements
Tata Communications announced its commitment to be Net Zero by 2035 across global operations. It is also leveraging IoT capabilities to develop green or low-carbon solutions for enterprises. Tata Communications and Oasis Smart SIM announced a partnership with SanCloud to use CloudSIM (a cloud-based eSIM) with on-demand connectivity service, in its solutions. CloudSIM will enable SanCloud devices with remote control and monitoring capabilities and simplify deployment across supply chains.
Tata Communications announced the transfer of its non-network IoT business to its subsidiary, Tata Communications Collaboration Services. The move is expected to accelerate innovation within its IoT business and drive growth. Telstra partnered with Charles Sturt University and Food Agility to develop innovative agricultural technology solutions. Telstra announced solid performance of its IoT business for fiscal H1 2023 (ending December 2022) with a revenue increase of 7.8% and connection growth of 24%. Telstra Purple and technology partners Ericsson and Newcrest (a mining operator in Australia) will trial 4G and 5G to support underground automation, enabling use cases such as advanced tele-remote and autonomous technologies. Telstra and Quantium (a data science and AI specialist) announced a joint venture to enable Telstra to enhance data analytics in IoT and unlock the potential of data and AI across its business.