The role of mobile operators in the development of the IoT market

In connection with the growing popularity of the Internet of Things recently, more and more companies, one way or another related to the field of IT, are starting to look in this direction: no one wants to miss the market.

Cellular operators are afraid to miss the right moment the most. The hard years of telecom, when the population was just getting used to using mobile communications and the Internet, have passed, and now the number of new customers on the market who previously did not have any operator is much less. And in this context, the prospect of a new market with devices instead of people is extremely pleasing to operators. But, as it usually happens, not everything is so simple.

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Background


In fact, IoT is not so new. They have been talking a lot about it in the last year or two, but companies that one way or another belong to this market (telecom operators, manufacturers of various equipment, integrators, organizations involved in the description of communication standards) work with the Internet of things in one form or another a long time ago.

Mobile operators began their journey to the Internet of things, when it seemed a distant prospect, a concept. Gradually, there was a demand for tariffs that either had megabyte pay or a minimum traffic packet was included, and the CSD function (circuit switched data, data transmission over a dial-up channel, in other words, similar to a modem) is also available. At first it was mainly banks that needed to connect or reserve the connection of ATMs. But over time, requests began to appear from other companies, and sometimes even individuals.

Creating a new tariff plan in the structure of a mobile operator is not such an easy task as it might seem, therefore, the appearance of allocated tariffs for a specific group of consumers already suggests that there are a lot of these consumers for the operator to pay attention to them, analyze I saw a situation in the development of this area and invested my resources in it. This moment, roughly coinciding with the advent of 3G, can be considered the beginning of the work of Russian operators in the M2M market (machine-to-machine, machine-to-machine interaction, without going into details - a synonym for IoT, adopted in some, including operator circles).

M2M: start


At the time tariffs appeared for the new segment, IoT was still a concept, and traffic from connected devices was called differently: telematics, telemetry, M2M. Many devices used SMS and CSD to exchange information instead of the usual GPRS. But everything has changed with the spread of 3G. The cost of one megabyte began to decrease noticeably, and packet data transfer at available speeds in 3G networks made it possible to connect various types of devices that were impractical to use in the previously existing conditions. In addition, which is no less important, at this time the production technologies of the devices themselves began to actively develop, which became more diverse and cheaper.

Some market participants already in this period began to wonder what would be in demand in the market in connection with these changes. There were a lot of ideas, as always, many of them remained ideas or eventually burnt out, but one of them was ingenious in that it could not be sold to individuals who find it difficult to convey the value of connected devices, or even some companies a narrow sphere of activity that is not related to IT, but to such large "fishes" as mobile operators who see the development of their business in this direction and are just in search of some kind of solution.

The meaning of this idea lies in the obvious assumption that a significant proportion of devices connected to the Internet will be connected through the networks of mobile operators. The management model for such devices will differ markedly from the standard subscriber’s profile management model: each person, as a rule, has their own SIM card, tariff plan and account, which are managed through a personal account on the website, in the office, by call or through the application, while the number of connected devices of the operator’s corporate client can reach hundreds of thousands, and they will be managed by a small group of administrators. Operators believed in this idea, and the so-called CMP, Connectivity Management Platform, connection management platforms, or, in Russian usage, M2M platforms began to appear on the market.

M2M platforms in Russia


In Russia, M2M platforms for mobile operators began to appear in 2010, Beeline was a pioneer here with the solution "M2M Control Center" from Jasper Wireless. Next, in 2011 there was MTS with the “M2M Manager”, and in 2014 they were joined by Megaphone with the “M2M Monitoring” of Russian production (Peter-service). These solutions have a number of differences in the details, and their comparison is a topic for a separate article, but in general they serve a common purpose: with their help, administrators of operator clients can massively (including automatically) manage a large number of SIM cards. They have access to lock and unlock both SIM cards in general and individual services, remote reboots, diagnostic tools for connections, alerts or actions in the event of any events, as well as a lot of opportunities to analyze the operation of these devices and minimize communication costs. The manufacturers of these platforms are constantly adding new functionality, for example, determining the location of a SIM card by base stations or monitoring the status of a channel. Also, these platforms usually have an API that allows you to receive through queries most of the same data that is accessible through the web interface. Thanks to the API, operators' customers can integrate the platform with their systems and use connection status data in them.

Data on the number of active SIM cards connected to M2M platforms varies. The operators themselves do not disclose these data, but if we analyze different sources and round off, on average it turns out that in Russia there are about 10 million of them. Incidentally, this number does not include connected devices that do not use platforms. Is it a lot or a little? The question is not simple, and it most likely refers not to the activities of operators, but to the characteristics of the economy of our country. In some areas there is no interest in technologies in general, although they could help, somewhere in them there is no significant economic benefit, somewhere on the contrary, due to the influence of the state, there is great demand, and somewhere there is simply no need for a platform from the operator. In any case, you can be sure that the operators will not miss out on their opportunity. And still, taking into account the popularity of the IoT topic in recent years and forecasts of billions of connections, the number of 10 million (and the market has been developing for almost 10 years) seems rather small. With what it can be connected?

“Vertical Solutions”


The same question is being asked by operators who, in the wake of the popularity of the Internet of things, year after year, are waiting for the explosive growth in the number of connections to begin, but it does not happen. The reason that is now popular, which explains everything that happens, is that a company that wants to implement technologies with connected devices and get some benefit from it, actually needs to do a lot of efforts, and many (and we are talking, including about such traditional areas as agriculture or housing and communal services, for which IT is not a core business at all) they are simply afraid or too lazy to get involved in it. Indeed, in addition to the devices themselves and providing communications for them, it is also necessary to somehow install and maintain these devices, and somehow process the data collected from them. In this whole chain, which is now called the "vertical solution", the share of the telecom operator (both in terms of complexity and revenue), together with the M2M platform, is 10-20 percent. It is much more difficult for any conditional farmer to find a sensor for the soil and correctly process its data than to find an operator with a SIM card.

“Vertical” or “boxed” solutions in this case are quite difficult to make: in different areas of the device and the data from them is very different. Moreover, the provider of this solution does not have to be a telecom operator, whose share of participation in the “vertical” is the smallest. Nevertheless, there is a prospect in this, and the operators hope for it. There are even several existing examples: for several years, operators have been actively selling solutions in the field of transport monitoring, there have been several attempts to enter the “smart homes” market, periodically the headlines on new housing and communal services solutions from Megaphone and MTS’s cooperation with Redmond slip through the news .

Technological perspectives


While the main task of mobile operators remains selling SIM cards and trying to come up with something new, manufacturers of various equipment and developers of new communication standards are doing their work and in the near future we will see a number of new technologies in action:

  1. 5G. We are used to the fact that each new generation of mobile data standards brings us increased bandwidth. Every year there is more and more talk about the new generation (although in Russia we still have not even begun to transmit voice within 4G), the new generation will have an important feature: in addition to the traditional increase in bandwidth, these standards imply the active development of the Internet of things;
  2. Every year, mankind manages to increase the capacity of autonomous power sources while maintaining their size. And this means widespread, for example, wearable electronics in the near future and incredible opportunities in the future;
  3. LPWAN. An important addition to the previous paragraph is Low Power WAN technologies developed specifically for IoT. Now there are several different standards, united by a common goal - to minimize the cost of power when the device transfers small amounts of information. These standards can be divided into two groups: those provided by mobile operators within the framework of licensed frequencies and standards that, like Wi-Fi, can be used in unlicensed frequencies by anyone. This second group of interests is being watched by a variety of IT market players who previously in the vast majority of cases had to turn to the services of mobile operators: integrators, equipment manufacturers, fixed-line telecom operators and others.

As you can see, the tasks of developing their networks for mobile operators are no end, and the future brings them a lot of new opportunities and new competitors. It is very interesting what kind of a niche the operators will occupy in this market: will they simply provide constantly cheaper communication services, or will they lead the process of introducing innovations into our lives. One thing is obvious, our daily life will gradually change with the development of these technologies. I hope for the better.