Leading research firm, Analysys Mason have forecast that the IoT value chain will generate revenues of US$252 billion by 2030 with connectivity accounting for 9% of this total. This raises an obvious question for CSPs – how can they get a bigger slice of this revenue?
CSPs are in a strong position to increase IoT-based revenues as they have major assets that IoT platform and device providers, and other potential IoT service providers may not have. These include:
› Their multi-million-strong customer bases
› Their networks
› Their systems that they use to run a digital business with several million customers
› Regular (monthly) financial transactions with customers
› Strong, trusted brands
Using a combination of the above, CSPs can increase their IoT-based revenues. These include selling IoT services direct to their customers and enabling their IoT partners to sell direct.
Here are 10 ways they can increase revenues, with points 1 – 3 discussing how CSPs can generate additional revenues by supplying connectivity ‘plus’ to IoT service providers who will then sell direct. Points 4 – 10 discuss CSPs selling IoT services direct.
Now that 5G SA (stand-alone) is being rolled out CSPs can use network slicing to provide guaranteed network speeds and latency. Data-hungry applications such as gaming have been discussed since the start of 5G but other mission-critical services, such as intelligent emergency services vehicles and robotic manufacturing will need service level agreements to make sure that the high-speed/low-latency connectivity is delivered to ensure that the mission-critical IoT service works as expected.
If the IoT platform (or device) provider, or SI is selling the IoT service direct, then the CSPs can provide the billing/subscription management service and customer care on behalf of the IoT provider. Many CSPs have BSS that can accommodate multiple brands on a single platform so they’d be able to support providing billing/subscription management and customer care for an IoT provider on their existing convergent BSS stack.
This can involve using APIs to give IoT partners greater access to the network (e.g. so they can provision new services directly) and the BSS stack to be used specifically for IoT services, so they can set up, manage and monetize offers.
CSPs enjoy a relatively high degree of trust with their customers. For many, especially in the B2B space, they have enjoyed long-term relationships with their customers. Many are now broadening their product and service portfolios and selling a wide range of 3rd party services to their existing customers. It will often be easier for a CSP to sell new IoT services to existing customers (with whom they have a relationship) than an IoT platform provider, SI or device provider trying to sell to new customers from scratch.
CSP can bundle IoT services and subscriptions with existing offers. They can offer cross-product discounts and bundled promotions to increase uptake rates.
The use of referral rewards in B2C (e.g. bringing a new customer can get €10 credit) has been long established in mobile. CSPs can extend this to facilitate the adoption of new IoT services within their customer base.
CSPs have a wealth of customer data on their CRM systems. This can be used to provide personalised offers, delivered over the most appropriate channels for specific customers.
CSPs have well-established roaming agreements in place for cross-border connectivity. The GSMA billing and charging evolution standard ensures that 5G and IoT roaming is efficiently supported and this is being implemented by many CSPs. This is very applicable to international IoT use cases such as logistics, transportation and fleet management.
The billing and monetization systems that CSPs have can enable billing for anything. It doesn’t matter if it’s a subscription service, a device or a gaming console that can be paid in instalments, modern billing systems can cater for bill-for-anything models. They can also look at outcome-based pricing for B2B customers, such as a negotiated percentage of cost savings to help win large-scale B2B IoT contracts.
Several CSPs have the latest no/low code BSS to support their existing mobile and fixed broadband services. These systems deliver high levels of agility along with process automation and CSPs can use these to set up IoT offers as a separate brand, or as new offers that they can sell to their existing customers within an existing brand. This way IoT services do not need a separate IoT BSS stack as it makes more sense (financial, operational, and environmental) to use the digital, convergent BSS that is already in place.
This is an extract from the Qvantel white paper Getting a Bigger Slice of the US$252 Billion IoT Revenues. To download a copy, click here.
Timo Sytelä
Head of Presales, Qvantel