MOUNTAIN VIEW, California — Telecommunications companies are good at connecting huge numbers of devices to networks. So it makes sense that in the Internet of Things (IoT) boom, with its expected 20 billion to 50 billion connected devices by 2020, there’s money to be made by telcos.
One place to look for these opportunities is in smart city projects worldwide, according to panelists at the Telecom Council Carrier Connections (TC3) summit last week.
Telcos own the wired and wireless infrastructure needed to connect the various sensors, cameras, and other elements in smart cities. They also reach to the most remote areas, providing that last mile connectivity needed for IoT.
“I go to these events all over and everybody says ‘5G and IoT,’” said IHS Markit analyst Michael Howard. “There’s a lot of IoT going on today, but there’s no 5G. [IoT] is a growing business today, and operators are very aware it’s an opportunity. The operators have the local presence, local knowledge, and what many of them are trying to do is get embedded in these verticals, find the business cases, and move up the value stack.”
Smart cities present several business cases, said Kerton Group analyst Derek Kerton. These projects, of which there are hundreds in the U.S. alone, include several key verticals such as smart transportation and smart grids. Plus, there’s available funding.
“When it comes to IoT, “you need to pick you battles,” Kerton said. “Wineries probably not. But smart cities yes.”
Howard noted India’s plan to build 100 smart cities by 2020. Each selected city receives $775 million. “There is a huge pot of investments, and they don’t know exactly what these projects are going to be,” he said.
Verizon, AT&T Connecting Smart Cities
Closer to home, we’ve seen Verizon building its IoT arsenal and morphing its ThingSpace web-based IoT development platform into a one-stop shop for everything from connectivity to applications.
This includes the company’s August 2016 $2.4 billion acquisition of Fleetmatics’ GPS tracking system, which lets fleet operators monitor vehicle location, fuel usage, speed, and mileage as well as other diagnostic information. And in September 2016, Verizon purchased Sensity Systems, a Sunnyvale, California-based privately held LED lighting company. The goal of that purchase was to build its smart communities offering.
And late last month, AT&T, Ford, Nokia, and Qualcomm Technologies, working with the San Diego Association of Governments, announced plans to test cellular vehicle-to-everything (C-V2X) technology — the first such trial in the U.S. The technology is a 3GPP-based cellular standard that will help vehicles use the cellular network for a variety of tasks including real-time traffic reports, diagnostics, and emergency calls.
‘IoT Will Grow’
One point the panel members all agreed upon is that IoT, in some iteration, and its opportunities for telcos isn’t going away.
“The reality is, something like IoT has been around for 20, 30 years,” said Sean McDevitt, a partner in Arthur D. Little’s Boston office. He leads the consulting firm’s Telecommunications, IT, Media and Electronics practice in the U.S. “There’s significant momentum behind [IoT] now because price points are down, there’s better connectivity, you’ve got data and analytics,” said McDevitt. “IoT will grow — whatever we call it in five years. Probably something with more sex and sizzle than IoT.”
And probably with more zeros attached to the market opportunity.
Photo: A TC3 Summit panel says the telecommunications industry needs to get on board the IoT boom.