Ali Durmus Ali Durmus Founding Partner, Executive Committee Member - Etiya

Can IoT be the new value added service telcos seek?

  • We’ve been hearing for some time the value of big data and how it can be utilized to improve the customer experience and help business to become more efficient but little is said about how it can be effectively monetized on its own.


    Communications service providers (CSPs) are supposedly ‘blessed’ with an inordinate amount of usable data that is generated by smartphone users, but how much of it us actually used by the carriers themselves is questionable.


    They may have mastered the collection, storage and farming of big data for their own use but are they missing an opportunity to offer the same data to other industries or businesses, where applicable?


    The concept of making big data a ‘profit center’ rather then the ‘cost center’ it is currently treated as is not foreign to companies like Google and Facebook - so why are CSPs holding back? It is not just a case of selling the raw or anonymized data, where regulations allow, but more of tailoring the data for third parties – a bit like a value added service.


    Not such a bad idea when you think just how much data is generated by all those apps on smartphones and how much browsing is now done on them. Only mobile network operators have access to all the traffic, and that gives them a remarkably personal perspective on what its customers are doing, what they like, where they are and what they may be looking for.


    Social media and search sites that personalize advertisements use the very same techniques and ad ‘pushes’ to their own users, and telcos could do the same, not only for themselves but also in behalf of their partners or potential partners.


    However, the same skill set could be best utilized by providing the full ecosystem to manage other parties' Internet of Things (IoT) or ‘machine to machine’ (M2M) requirements. Almost every home appliance, wearable device, app, smart meter and home management system will need not only connectivity, but also a means of collecting, processing and storing the copious amounts of data each will generate.


    CSPs could easily provide all or part of the ecosystem needed by the new players in the IoT space, and also provide the business systems to monetize this traffic. But it will need a change of mindset for many still stuck in the network services only mentality.


    It will also require further investment in data and business systems that could be hard to justify this early in the IoT hype cycle but, like the value added services proposed above, could be one of a very limited new revenue streams required to keep operators’ business viable.


    Some multiple play telcos have already made the move and have teamed with energy utilities to provide the backbone and processing needed to collate smart grid information. Others have jumped into the connected car space, others in the medical monitoring arena and others in location based businesses like fleet management.


    Just providing low-cost connectivity in a highly competitive market will probably not generate the revenues needed, but providing the value added data processing services could. How telcos position themselves and how quickly they can add the skills and resources needed to provide these IoT ecosystems could even be critical for their survival.


    They may also need to partner with competitors to offer the best coverage in one region or to extend the service across national boundaries. This is one area that international IoT players will definitely appreciate as having to forge multiple relationships across multiple markets is proving to be their biggest headache.


    Ali Durmus
    About Ali Durmus Ali Durmus works as Founding Partner, Executive Committee Member at Etiya
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