Ericsson develops a cunning plan for generating IoT revenue

Networking vendor Ericsson has been having a think about how service providers can make a few quid out of IoT.

That thinking has been distilled into a report entitled Exploring IoT strategies – Insights on IoT value chain positioning from leading telecom service providers. Ericsson spoke to a 20 service providers and found that 70% of them don’t have a well-defined IoT strategy and that 80% of them “aim to create value beyond connectivity either by providing differentiating services or by becoming IoT service enablers or service creators.”

The latter finding seems to be a lead up to the bulk of the report, which aims to segment a number of different approaches service providers can take to monetising the IoT opportunity. “The report confirms the importance of IoT to the current and future business of leading service providers, no matter where they operate in the world,” said Jeff Travers, Head of IoT at Ericsson.

“Regarding IoT as a new type of business, service providers are investing in new technologies and establishing new business models for revenue sharing and increased use of indirect channels. They are also creating new delivery models for as-a-service and online services and driving innovation with partners and customers.”

The tables below show the four roles service providers see for themselves in this context. The first two are the foundational roles for CSPs, which they still expect to drive the majority of their revenues. The opportunities beyond connectivity are split into Service enabler and Service Creator and further differentiation can be achieved by following one or more of the sub-roles too.