At the MEF Wholesale event in July 2024, TecFutures Co-Founder, Andrew Parkin-White, gave a presentation on the challenges and opportunities associated with the evolving IoT wholesale market. Below are the key messages.
Understanding Market Evolution
The IoT market is continually evolving and understanding its trajectory over the next eight to ten years is essential for developing effective wholesale strategies. The IoT market has transitioned from early development, characterized by pioneering organizations, to a growth phase where early adopters move into the mainstream market. Currently, key verticals are moving towards broader market engagement. This shift involves a transition from customization to more standardized product offerings and service integration. Eventually, as the market matures, TecFutures anticipates a phase of commoditization.
Managing IoT Growth
Forecasts predict that by 2030, there will be around 30 billion connected devices. This growth is driven by several factors, including shifting customer needs and emerging vertical markets. While traditional markets like automotive and transportation remain significant, new opportunities are arising in areas such as industrial IoT, smart cities, agriculture, and healthcare.
Addressing Market Challenges
Despite the optimistic projections, several challenges could impede IoT market growth. These include variable network coverage, interoperability issues, scalability concerns and rising security threats. Additionally, the complex regulatory environment and the need for extensive customer education and support present significant hurdles.
Maintaining a Clear View of Supply Side Dynamics
On the supply side, CSPs face critical decisions. They can either scale up to become hyper-scalers, specialize in niche markets, or exit the market. Mobile Virtual Network Operators (MVNOs) and Mobile Network Operators (MNOs) are positioning themselves to serve beyond early adopters, focusing on enhanced connectivity management platforms, security, compliance and data analytics.
Strategic Imperatives
For CSPs, understanding the drivers of technology adoption is paramount. They must excel in global connectivity, move beyond basic connectivity services, and pay close attention to emerging commercial models. Staying ahead of the technology curve and fostering strong partnerships with customers are also critical for success.
Wholesale providers must navigate several key market trends affecting their business. These include changes in the end-user customer base, evolving CSP and wholesale business models, technological shifts, and the need to monetize investments effectively.
Despite substantial investment in infrastructure, many operators and wholesalers struggle to achieve satisfactory returns. Wholesale providers face three primary areas of challenge and opportunity:
1. Service Development:
Addressing functionality issues such as network function virtualization and software-defined networks.
Offering flexible wholesale services with dynamic provisioning and scaling capabilities.
Understanding the role of edge computing in latency-sensitive applications.
2. Growth Opportunities:
Managing growing demand for mobile data and associated traffic.
Expanding market reach to new customers and segments.
Identifying key partnerships and ecosystem collaborations to enhance service offerings.
Leveraging the interplay between IoT and AI to unlock new business paradigms.
3. Competition and Differentiation:
Differentiating services through innovative offerings and superior network performance.
Providing excellence in customer support.
Strategically competing with MVNO customers while maintaining a dual retail and wholesale offering.
Accelerating billing and charging environments and settlement processes.
Conclusion
In summary, the IoT market presents vast opportunities for growth and innovation. However, navigating this landscape requires strategic insight and a deep understanding of both the technology and enterprise markets. At TecFutures, we strive to equip our clients with the knowledge and tools they need to succeed in this dynamic environment.
About TecFutures
At TecFutures, we help create strategic roadmaps that help to answer the fundamental questions that CSPs need to address in developing new markets. Our Market Acceleration Framework enables CSP to build competitive advantage and drive revenue growth in the fast-evolving IoT landscape.
We are committed to helping our clients in developing their marketing strategies and tactics for the next wave of technology adoption.
Contact Rysio Pakula at rysio@tecfutures.com to learn more about how we can support your journey towards ongoing success.
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