The Internet of Things impact: Telco challenges and opportunities

Technical Writer

Much of our lives already revolve around smart devices. But our reliance is about to become much stronger. The Internet of Things impact is set to expand as the market for network-enabled devices is expected to hit $7.1 trillion by 2020, according to an IDC study reported on ZDNet The Internet of Things (IoT) is partially defined as the wireless connectivity of humans and objects to the Internet without the need for computer interaction. Frequent examples include wearable devices and lights that can be operated from a smartphone.

What does this mean for telecommunications providers? The IoT is dramatically changing consumers' wireless demands, and therefore providers' service levels. It is essential that these companies understand the opportunities and challenges created by the IoT, and then craft a strategy for this next generation of smart devices.

Customer value, revenue and data

You only need one word to sum up the biggest benefit to mobile carriers: opportunity. According to Harbor Research as the IT and telecommunications sectors "gasp for air, an unprecedented opportunity stares everyone in the face — the opportunity to provide the modern, automated information and communications tools that 21st century business needs so desperately." The goal is to figure out how to provide your customers with benefits that will increase revenue and provide a competitive advantage in the marketplace.

Providers should develop partnerships with companies that produce smart products. Vodafone, for example, partnered with BMW to put mobile SIM cards in cars, allowing users to track the vehicle's location, change the heating and cooling settings and alert emergency services in case of danger, The Wall Street Journal reports. Vodafone also uses IoT technology in other worldwide partnerships, helping power companies in New Zealand track electric meters, South African police find stolen cars and harvesters determine if bananas have turned brown while being transported on cargo ships.

Challenge: Effectively manage connectivity, data, security and privacy wireless or mobile service goes out in our homes or offices, it is a major disruption to our day. Imagine if your home or office contained at least 10 times the amount of connected devices, including refrigerators and water tanks. The Telecommunications Industry Association (TIA) sums up this problem by asserting that the IoT dramatically increases the importance of connectivity continuity. Telecommunications providers must focus even more on providing consistent service, which will be an increased challenge because the network demands will be much higher than today.

With these additional active devices comes additional privacy and security concerns and an increase in the types of information providers can collect. In another report, the TIA found that three of the four main challenges to telecommunications companies — privacy, cyber threats and security — are related to this issue. The TIA specifically mentions health care and financial data as a top priority.

Consumers are also apprehensive about security issues related to the IoT, as Adweek reports. It reported that 53 percent of consumers are concerned about data sharing and 51 percent are concerned with hacking. While telecommunications providers don't have all the answers yet, those that can successfully give customers peace of mind will have a significant competitive advantage.

The bottom line is: carriers cannot wait. The Internet of Things impact is real and will change the core approaches of successful providers. Those that successfully monetize the IoT while managing the increase in devices will be in the driver's seat, while those that wait to see how this story plays out will have to catch up over the next decade.

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