Carriers and the Internet of Things

The Internet of Things (IoT) has captured our imagination, partly for the creativity of what’s possible, and partly because of the almost unimaginable scale of the change it will bring to how we live and work: for example, Gartner has forecast that using machine-to-machine communication to increase the efficiency of our cars, our power networks, our supply chains, our home technology (and almost everything else that uses electricity) could add $14.4 tr (£8.5 tr) to the global economy by 2023 – more than the entire GDP of China.

But the excitement always seems to focus on the devices and services. Without secure, high-quality networks to transmit the data, that enthusiasm can’t be justified.

The IoT means literally billions of connected sensors that detect their environment and communicate it – usually to other devices, without our intervention. Those devices act on the data. So a washing machine can call an engineer when it feels sick, a parking space can tell your car that it is available, or a tablet can report your health to a mobile phone. It will touch any business that can benefit from automation, or that can benefit from responding quickly to changing environments.

We can’t know for sure where this technological revolution will take us, but we can say with certainty what the most important component of those devices will be: data.

For the IoT, not all of our communications networks will be equal. The network provider will have both technical and operational responsibility, tasked with essential jobs that are vital to the success of IoT applications.

Technically, legacy networks were not made to tolerate billions of simultaneous connections. IoT sensors might go months without communicating on the network, and then deliver only a few bytes of data. But, when they do communicate, connection has to be reliable (a fire alarm), may need to be encrypted (a health emergency), and may require a global connection (a car breakdown). Network operators that have invested in next-generation networks will reap the benefit of their advanced management capability and quality of service.

But the operational capability of a network provider is just as important. Experience of partnership and co-creation of services becomes more valuable, because many IoT applications are still in their early stages of development. An innovative provider that works with businesses to accelerate IoT development generates value for itself, for its partner, and for the customers of that partner.

Also, a visionary network provider may become an innovation hub in itself. As the common element in many complementary services – think insurers sharing data with car manufacturers, or a logistics company dealing with many retail outlets – it can help them to securely share data. In time, that data becomes a source of value in itself, provided that the network provider can use its analytic capability to identify new opportunities or trends for its customers.

So the IoT needs networks that are resilient, secure, global and flexible. But the providers of those networks must have the vision to apply this technology to an entirely new set of business challenges. Not all telecoms operators will meet these demands. For their enterprise customers, IoT success depends on quickly identifying the operators that do.