Many telecom companies are looking to jump into the exciting world of the Internet of Things (IoT) and make the most of its possibilities. A recent study shows some incredible numbers – the global IoT telecom services market is anticipated to skyrocket to $97.9 billion by 2028, marking a remarkable growth at a CAGR of 31.8% from 2022 to 2028.
But there's a challenge. Telcos and their partners are facing difficulties in implementing their IoT strategies. One of the major barriers is the dilemma between embracing a broad approach that covers many industries, or adopting a more narrow approach tailored to a select few. Juggling multiple initiatives at once can be tough, so businesses should first decide on an approach to then pick a business model that fits their goals perfectly.
At Flyaps, we've seen this complex dynamic over the years. With a decade of developing intelligent solutions for telcos, we've witnessed a transformative shift in telcos' priorities towards embracing IoT to revolutionize their service offerings and streamline internal operations. To help you get rid of this dilemma, we've decided to share our experience on this topic.
In this article, we'll talk about some battle-tested business models for bringing IoT into telecom, and help you pick the right one depending on your business goals. Moreover, we will share a real-life success story of our client, the UK's largest telecom operator, that succeeded with IoT. Keep reading to learn more!
The basic business model for telecom IoT implementation
The most common approach focuses on two important parts of the value chain: creating useful services and devices. It can be done with the 1+N+X model. We’re about to break down the model and its components, but first, imagine a telecom company that is eager to implement IoT to provide it as a service for the agriculture sector. Their management was aware of the standard 1+N+X model, so they decided to just jump into it. Let’s follow how they succeed:
1 - IaaS + connectivity management platform (CMP):
Our imaginary telco recognizes that reliable connectivity forms the bedrock of any successful IoT implementation in agriculture. Leveraging their telecommunications expertise, they established a cutting-edge Infrastructure as a Service (IaaS) tailored to the unique demands of agricultural environments. This infrastructure seamlessly integrates with farm equipment, sensors, and devices, ensuring that critical data is transmitted without interruption.
The connectivity management platform (CMP) developed by either the telco's development team or in collaboration with their software engineering partner acts as the heart of their IoT ecosystem. Similar to a traffic manager, the CMP efficiently handles the diverse flow of data from numerous devices across various farms. It optimizes data transmission, minimizes latency, and ensures that farmers receive real-time insights to make informed decisions. The telco's CMP becomes an indispensable tool for managing the intricate web of connections on modern smart farms.
N - Device management/application enablement platform (DM/AEP):
With a solid connectivity foundation in place, the telco now focuses on device management and application enablement.
To offer holistic solutions, they collaborate with trustworthy software development experts to create a robust device management and application enablement platform (DM/AEP). This platform provides farmers with a unified interface to oversee and coordinate their array of devices.
Farmers using the telco's DM/AEP can remotely monitor soil moisture levels, track livestock health, and control irrigation systems from a single dashboard. This streamlined approach simplifies farm management, increases efficiency, and allows for proactive decision-making. Additionally, the telco's DM/AEP acts as an open ecosystem, encouraging third-party agricultural device manufacturers to integrate their products seamlessly, expanding farmers' options and flexibility.
X - Software as a Service (SaaS):
The telco's vision transcends device management, so they aim to empower farmers with actionable insights. Building upon its robust foundation and device management platform, the telco introduces a suite of SaaS solutions tailored to the agricultural sector.
For instance, one of their SaaS services offers real-time analysis of crop health using data from soil sensors, weather forecasts, and satellite imagery. This empowers farmers to optimize irrigation, fertilization, and pest management, resulting in higher yields and reduced resource waste. Another offering uses GPS and health sensors to ensure the well-being and location of livestock, improving animal welfare and operational efficiency.
The telco continuously collaborates with agronomists, meteorologists, and crop scientists to expand its SaaS portfolio, addressing emerging challenges and enhancing farmers' capabilities.
So, the 1+N+X model is like a plan for creating a strong foundation for devices to connect to the Internet. It's about adding tools to manage devices and then offering helpful services to different industries.
Besides this basic model, there are several business models that are more focused on various business objectives you may prioritize. Below, we will explore the most promising ones.
Top 6 modern IoT business models based on the company's goals
There are six different ways that telecom companies can do business with IoT, which is all about smart devices and applications working together. As IoT works using the cloud technology, the basic cloud computing services are at the heart of each model. Now, let's examine the six models in detail:
Infrastructure as a Service
Suppose your telco specializes in providing IoT connectivity solutions to various businesses. You offer SIM cards that enable devices to connect to its IoT network. While you don’t know the exact application of each device, it ensures reliable network connectivity and manages billing services. This model is ideal for companies looking for a simple, plug-and-play solution to connect their devices to the IoT.
Platform as a Service
Here, your telecom company not only provides the infrastructure for device connectivity, but also offers a platform that allows businesses to manage their devices, monitor data usage, and optimize connections. Your billing system is based on data usage, offering a flexible and customizable approach for businesses with varying needs.
Platform as a Service +
As for this model, your telco launches an advanced IoT platform that goes beyond simple connectivity. The solution not only manages devices but also offers services like voice calls, SMS, and data storage. This comprehensive platform is made available to developers and other companies to integrate into their applications. Moreover, you offer a tiered pricing structure, allowing businesses to pay for the specific services they utilize.
Software as a Service
Imagine your telco creates a suite of IoT solutions designed for different industries. They offer customizable tools for smart homes, warehouses, manufacturing, and more. These tools can be tailored to suit each industry's unique needs. You charge businesses based on the number of devices that use their solutions, making it an accessible option for various businesses.
Software as a Service +
This one is similar to the previous model but with extra features. By going this way, your company offers an enriched SaaS model that not only provides industry-specific tools but also offers an end-to-end ecosystem. It connects devices, applications, and services seamlessly, streamlining the IoT chain. The company caters to businesses seeking a comprehensive IoT solution, charging based on the complexity and scale of the services used.
Business as a Service
This is the most advanced model. When you operate as a BaaS provider, you obtain licenses to operate across various sectors. Your company offers sophisticated IoT services to industries ranging from healthcare and agriculture to transportation and energy. It delivers complex, industry-specific solutions, making the company the go-to partner for businesses seeking advanced IoT integration across multiple domains.
There are plenty of great ideas for achieving success in the IoT field. However, let's not forget about implementation – another crucial factor that plays a significant role in determining overall success.
So, what is your winning strategy?
The key strategy for successfully implementing IoT in the telecom industry involves a combination of different steps that build on each other, like building blocks. We’re going to break down this winning strategy. To make it simpler to grasp, let's imagine a telecom company with a well-thought-out plan for bringing IoT to life. We'll see how they put this plan into action step by step.
Building strong connections
At the beginning, the telecom company focuses on something they're really good at: making sure devices can talk to each other over the internet. They use technologies like LTE-M and NB-IoT to do this. They're also working on making connections even better with things like 5G. This is the first step in their plan.
Narrowing down to specific industries, using the company's expertise
Instead of trying to help everyone, our telco picks specific industries that match their strengths. It's like a musician playing an instrument they specialize in. For example, our telco is great at planning for the long term, so they decided to work with companies that need devices to last a long time, for instance, those that provide electricity. This way, they help where they're most needed.
Based on this principle, our imaginary company selects two key areas, let's say the electric power industry and healthcare, and focuses closely on what they require. For instance, while dealing with the electric power industry, they ensure seamless and fast connectivity of the devices to maintain regular operations. It's like zooming in to provide crucial help exactly where it's needed.
Expanding to similar areas
After getting success in a few select domains, the company decides to move further. They start helping industries that have similarities with the ones they have already succeeded in. This expansion means combining their main strengths with the knowledge they've gained from previous experiences.
For instance, they have accomplished significant success in healthcare IoT solutions. So, they decided to explore the wellness and fitness area. They use their knowledge in remote health monitoring to develop wearable gadgets that record exercise and diet information. This enables them to use their existing capabilities to enter new areas of influence.
Teamwork and partnerships
In the world of IoT, it's important to work with others. Our imaginary telco learns to work with other companies and people who can help implement new ideas and tools. They use their connections to create new services and platforms that help everyone involved.
Learning from others
To keep growing, the company learns from others who are doing well, too. They team up with these successful companies to make better tools for communication. They also look at what cloud and platform leaders are doing, always keeping fingers on the pulse.
But enough with theory, it’s time to explore how this approach works in real-life. So, let’s explore the case of our client, BT Group.
Story of success: building a multifunctional B2B IoT portal for UK's largest telecom provider
British Telecom Group is a UK-based multinational telecom giant renowned for its diversified array of services. These include IoT connectivity, SIM provisioning, and a robust network serving a wide range of devices. Efficient management of SIM card allocation, real-time traffic monitoring, and accurate billing requires specialized software. Initially aligned with Cisco's Jasper, BT's expanding IoT services and growing customer base required a more customized solution.
To meet this need, BT looked to none other than Nextgen Clearing – experts, known for their telecom business intelligence solutions. Nextgen has long been using Flyaps's services to bring its groundbreaking concepts to life. Based on our deep understanding of the telecom industry and our solid technical skills, as well as our history of successful collaborations, Nextgen selected Flyaps as their partner. Together, we started building a unique and custom platform specifically designed for BT.
The paramount requirement for the system was for it to be able to process large amounts of real-time data. However, there was a pretty strict deadline for this type of project – just three months. Unfazed by the challenge, Flyaps took a strategic approach to speed up the process.
Our team started by dividing the development into separate modules, promoting fast completion and avoiding any unexpected pitfalls. This carefully planned approach resulted in the creation of four essential modules, each performing different functions seamlessly:
- The SIM card management module: This module helps BT Group to track the distribution of SIM cards, and also provides unique identifiers for each allocation.
- Module for pricing plans: The system selects the best plan for each client by comparing different options.
- Module for invoicing: The system automatically creates invoices and constantly monitors data usage to ensure accurate billing.
- Module for managing accounts: This module makes it easy for customers to register, view their bills, and invite other businesses to use the service.
After the work was done, BT Group managed to transform its decision-making process by smoothly accessing important data through the custom IoT portal. This allows them to offer personalized plans to customers and create accurate invoices. Furthermore, they now can increase their revenue by aiding other IoT businesses on their platform.
How Flyaps can help with telecom IoT implementation
With over a decade of hands-on experience in the telecom sector, Flyaps knows all the ins and outs of developing IoT solutions. Our track record includes the creation of products that currently power the operations of over 100 telecom companies, including industry leaders such as Orange Group.
Such long tenure in the industry has given us an understanding of the complex challenges and requirements that telecom companies face. It is this in-depth understanding that has led influential players such as British Telecom Group to entrust us with the transformation of their IoT services.
So, let's see how our expertise can be tailored to enhance your telco's capabilities:
Cloud-based infrastructure implementation
Your IoT initiatives most likely require a transition to a cloud-based infrastructure. We can help you with migrating existing systems and applications to the cloud with a telecom hybrid cloud approach Benefits include sensitive data protection, scalability, cost-efficiency, and improved reliability.
We can also design and implement a scalable architecture like microservices that ensures the seamless integration of IoT devices, data storage, and processing capabilities, facilitating efficient data management and analysis.
AI-driven data analytics
The integration of AI-driven data analytics is vital for extracting actionable insights from the massive amounts of data generated by IoT devices. Our team can build advanced analytics solutions that employ machine learning algorithms to detect patterns, anomalies, and trends within the data. This will enable your telco to optimize operations, enhance customer experiences, and make informed business decisions. We can design predictive models, anomaly detection systems, and real-time dashboards that provide actionable insights based on IoT-generated data.
DevOps for telecom
Implementing DevOps practices in the telecom industry helps streamline development and operations, leading to faster and more reliable software delivery. Flyaps can assist your telco in adopting DevOps methodologies by automating the deployment process, improving collaboration between development and operations teams, and enhancing the overall efficiency of software development cycles. This approach ensures quicker updates, smoother releases, and more robust IoT solutions.
IoT solution development
We're pros at creating custom IoT solutions tailored to telcos' specific needs. Whether it's developing M2M billing solutions, remote monitoring platforms, or logistics applications, Flyaps can create bespoke software that aligns with your business objectives. This involves designing user-friendly interfaces, implementing secure data transmission, and ensuring interoperability between various devices and systems. We can also facilitate the integration of third-party IoT devices and APIs into your telco's solution.
Still, having questions? Drop us a message and we'll help you choose the ideal business model that suits your company perfectly.