Networks need to be built for IoT not smartphones – Sprint

If telcos are going to back the IoT trend to realise the promised fortunes of the digital economy, are they building networks to fulfil this ambition?

This was the question raised by Ivo Rook, SVP of the IoT business at Sprint, at Total Telecom Congress. If telcos are still designing networks with the smartphone in mind, then the pot of gold at the end of the IoT rainbow may well be raided by rivals.

“If we think the world is going to change and networks are going to be at the centre of that, we should be thinking about how we are building networks but also why we are building networks,” said Rook.

“If the smartphone is the usecase of the mobile network today, then what is the usecase of tomorrow?”

The team at Sprint has taken a slightly different approach to many telcos and the result is the construction of a fully-virtualised network, which runs on bare metal servers, designed exclusively for IoT, which is known as ‘Curiosity’.

While it might sound like a simple idea, the best ones often are.

Rook highlighted traffic is separated at the radio, before being driven towards separate and dedicated network cores. One network is designed for the behaviour of smartphones, while the second is designed for IoT devices and applications. These are two different segments, which create different challenges, therefore it is only logical to create two different networks.

And when you look at the numbers, it does raise the question as to why more telcos aren’t taking this approach.

The smartphone segment is one which is likely to remain profitable in the long-run, though growth is only estimated at 2%. You can of course build a business case around this, but the levels of CAPEX required are eye-watering. It will be more expensive to build a dedicated IoT network to run alongside, but the financial projects are much more attractive.

According to EY, the number of IoT connections worldwide is forecast to hit 25 billion by 2025, creating a market which could be worth in the region of $1.1 trillion. However, one of the drivers of this segment is the progress of computational power, the rise of cloud computing and the decreasing price of connectivity. These are three segments which are accelerating their progress, suggesting the top-line estimates on revenues could be conservative.

As there is only so much growth left in the smartphone world, and the consumer’s data appetite is aggressively increasing, profits are looking less and less attractive. These are the trends which are driving telcos to diversify, however if the same approach is applied to the networks for different usecases, is the potential going to be realised? Its all about creating the right tools for different jobs.

The question which telcos need to ask themselves is where do they foresee the greatest profits in the future. If it remains in the smartphone world, then fair enough, design networks the same way. However, for enterprise applications and IoT, as Rook highlights, perhaps there should be a shift in mentality for prioritising network demands and design.