How Telecom Operators Can Monetise the Internet of Things

Whether visible or not, technology is increasingly enabling commonplace objects to become more and more connected.

By 2020, the ownership of Connected Objects is expected to reach 15 items per person – a number that is likely to include applications that are yet to be invented.

While this presents new opportunities for a vast array of vertical businesses, it will also bring about new monetisation challenges for operators.

Connected objects are in a critical phase of the hype cycle, where the conversation needs to move beyond just discussing potential towards outlining clear plans for revenue generation.

For Orange, this is one of our focus areas and as part of our new strategic plan, Essentials2020, we outlined the goal to generate €600 million in revenues from connected objects by 2018.

In order to reach this target, we need to adapt and restructure our business models to help identify and capitalise on value-creating mechanisms in this space. The same goes for other operators.

The distribution of connected objects from existing retail channels is a natural evolution of an operator’s business model.

In addition to handsets, the sale of connected hardware will represent a consistent source of revenue.

The same applies for connectivity and data plans, due to the sheer volumes of traffic that will flow through the exponential rise of internet-powered ‘things’.

Web users are no longer the only ones consuming bandwidth.

By 2025, we estimate that half of all data sent through our networks will have been generated from connected objects and the IoT.

To manage and support this influx, operators will need to ensure the efficient use of spectrum and infrastructure.

This will be aided by increasingly powerful connections, with more widespread 4G connectivity and fibre connections helping to facilitate an enhanced user experience.Read more

Source: European Communications