The channel is well-placed to capitalise on an expanding Internet of Things (IoT) market in Asia Pacific with customer demand for services expected to heighten.
According to GlobalData findings, the marketplace for IoT-related services - including connectivity, devices and software - is forecast to surpass US$96.3 billion in sales by 2023, at a compound annual growth rate (CAGR) of 22.4 per cent.
While software and services are projected to dominate spending, growth from connectivity and devices is also expected in response to the launch of more cellular-based IoT networks supported by 5G.
“In the IoT marketplace, connectivity is generally seen as the lowest spot in the value chain, followed by devices,” said Malcolm Rogers, senior technology analyst, GlobalData. “The highest value IoT services come from providing software platforms and applications for IoT management and operations.
“While telecoms operators are well positioned to supply connectivity, many want to move up the value chain to offer higher value services like IoT management platforms.”
In assessing the regional market, Rogers cited smart cities and Industry 4.0 initiatives across verticals such as manufacturing, utilities and energy as “key drivers of growth”. Furthermore, governments across Asia Pacific are also expected to “spend heavily” on IoT services during the next four years.
To expand revenue opportunities, Rogers said regional operators are moving from beyond offering “simple IoT connectivity” to providing end-to-end IoT platforms, often with an industry specific focus.
“If telcos want to remain relevant in the IoT marketplace, they need to evolve their service portfolios,” Rogers said. “Operators in Asia Pacific are keenly aware of the IoT opportunity and many, particularly in more advanced mobile markets, are forming IoT strategies to move beyond connectivity to provide additional services around platforms, integration, security, and in some cases applications and operation management.”
Consequently, Rogers said operators can increase IoT revenue as cellular technologies such as Narrowband IoT (NB-IoT) and CAT M1 “mature and expand” in capability. The advent of 5G is also expected to increase revenue from IoT connectivity and devices as well as software and services.
“5G will enable the deployment of millions of devices and sensors, which in some industries can be used to deliver real-time insights into operations, reduce safety hazards and offer services like predictive maintenance,” Rogers explained.
To achieve success, Rogers emphasised the importance of partnerships in the roll-out of large-scale IoT deployments, highlighting the strength of a channel network in meeting customer requirements.
“Telcos in Asia Pacific most commonly start providing simple IoT connectivity platforms that offer on-boarding tools, billing and usage monitoring, and controls and basic network security,” Rogers said. “This is most often accomplished by partnering with major network equipment vendors, who offer dedicated telco IoT platform solutions that telcos either white label or bring to market in a partnership.”
For Rogers, more advanced telcos in the IoT space are focusing on developing IoT ecosystems through bringing together connectivity, devices, application and integration capabilities into a single platform through "partnerships and their own capabilities".
“This enables downstream customers to help tailor their IoT services to specific needs, without having to engage multiple stakeholders, which add management complexity to a deployment,” Rogers added.