Connected Play

Growing telco presence on IoT turf

The IoT market in India has gained significant traction in the past year, with businesses realising the significance of connectivity, especially in a Covid-19-inflicted world. Connected technologies are being seen as a driver for improving business efficiency, reducing downtime and controlling costs. With the pandemic leading to business shutdowns, supply chain disruptions and remote working, there has been a surge in the number of IoT deployments, especially by enterprises across the manufacturing, automotive, transportation, energy and utility segments.

Currently, five segments contribute to the major IoT market demand – small and medium businesses (SMBs), large enterprises, global capability centres (GCCs), consumers, and the government. The IoT adoption rate stands at around 35 per cent amongst large enterprises, but is way lower for SMBs. Of the 75 million SMBs in the country, only about 50,000 leverage some form of advanced digital technology solutions.

Meanwhile, growing smartphone penetration is driving the adoption of IoT-based solutions in the consumer segment. The government too has given a fillip to the IoT market in India, with projects such as Digital India and the Smart Cities Mission.

As per a study by consulting firm Zinnov, India had 200 million-250 million connected devices as of end 2019. This number is set to touch 2 billion by 2021. Further, IoT investments in India stood at an estimated $5 billion in 2019. These are expected to triple to $15 billion by 2021.

The momentum and upsurge in the IoT market bodes well for Indian telcos, which have long been exploring new avenues to diversify their revenue and customer base. With the upcoming launch of 5G and the focus on edge computing, Indian telcos are now aiming to provide high-end and high-margin IoT services to enterprises.

This is evident from the recent telco activity witnessed in the IoT space. In early April 2021, Bharti Airtel and Vodafone Idea (Vi) launched advanced and integrated IoT offerings for enterprises on their 5G-ready networks. Jio, meanwhile, already has a lot going on behind the scenes on the IoT front. It has developed a comprehensive IoT solution with a platform, devices, diagnostics, connectivity and support, and is in advanced talks and trials with original equipment Manufacturers (OEMs) to launch its offerings soon.

For telcos, the cellular IoT market presents a Rs 100 billion by 2022 market opportunity, as per industry estimates. Traditionally, telcos’ participation in the IoT space has been limited to connectivity, with them contributing less than 10 per cent to the total value chain. The bigger share lies with applications, platforms and hardware. With new integrated offerings, telcos are now aiming to move beyond connectivity and emerge as providers of device management, device diagnostics, analytics and solutions.

Telco advantage

Telcos come with a larger B2B play that can be leveraged to push their IoT offerings. Owning the network and leveraging their experience in servicing clients from key industries such as automotive and utilities give them a head start in the IoT space. As per Airtel, it has a large B2B presence, serving over 2,500 large enterprises and 1 million small and medium enterprises, and owing to this network and customer strength, it is hopeful of capturing a substantial share of the IoT market. Also, telcos have the advantage of wireless connectivity. Given that many of the machines and devices that need to be connected are situated in places where wired connectivity is unviable, such as in the middle of a road or in a remote location, wireless connectivity works best.

Bharti Airtel recently launched Airtel IoT, a 5G-ready IoT platform. The operator is offering a flexible set of APIs to eliminate cumbersome integration journeys and allow enterprises to stream the process of connecting, collecting and analysing data through their existing workflow tools. The company is targeting automobiles, manufacturing, BFSI, utility and Industry 4.0 verticals to drive the growth of its IoT platform and the IoT business as a whole. According to Airtel, companies are going for larger-scale automation post-Covid, and this presents a huge opportunity. The operator already has MG Motor, Pine Labs, Paytm, Kirloskar, BSES, Genus and Kent on board, among other businesses. The company’s new platform supports 2G and 4G along with narrowband-IoT networks, and will support 5G in the future. Airtel has built this platform in-house, but it is aiming to create a complete ecosystem through collaborations with start-ups and other players. Most of these players will be invited to come on board this platform and build solutions on top of Airtel’s IoT platform. The company also has a larger plan on the device ecosystem. Its parent, Bharti Enterprises, has recently collaborated with Dixon to manufacture set-top boxes, routers and networking devices, including IoT devices.

Meanwhile, Vi has been a strong player in the telco IoT connectivity space, accounting for about 54 per cent market share. It is now looking at garnering 10-12 per cent share in the non-connectivity IoT space as well. To this end, it recently launched its IoT solution comprising connectivity, hardware, network, application, analytics, security and support. The telco is targeting the smart mobility, logistics, smart infrastructure and smart utility segments, and has already tied up with a few companies to this end. It has decided to adopt a consulting-led engagement to support businesses in identifying their needs, design and develop the right IoT solution, and enable implementation. The telco will also provide customised IoT solutions to enterprises. The company is leveraging its innovation lab to build these IoT offerings.

As for Reliance Jio, the operator has reportedly been in advanced talks with OEMs to launch its IoT services in India. The company, in a recent analyst presentation, stated that it has developed a comprehensive IoT solution with a platform, devices, diagnostics, connectivity and support. Jio aims to have a network of 1 billion IoT devices added to its IoT platform, unlocking as much as Rs 200 billion in annual revenue. It has successfully conducted pilots with various electricity distribution companies, and is now integrating its IoT solution with those of other OEMs. It has also tied up with systems integrators for the roll-out.

5G and IoT

IoT is crucial for the roll-out of 5G as it will enable connecting billions of devices on the network. The onset of 5G will also enhance the role of IoT devices. 5G promises connectivity with high bandwidth and ultra-low latency, which can help in establishing faster connections in real time between two or more devices. This stands to benefit IoT devices since they will be able to communicate efficiently, accurately and effectively.

As the Indian market gears up for 5G, the role of smart cars, robot assistants and other such devices will grow. And be it autonomous cars, or remote surgery, or other such use cases, all of these would require very low latency, which would be possible only through 5G. In such scenarios, the devices/machines would have to be intelligent and make decisions in real time. Analytics will come to the forefront in a big way. 5G networks will aid IoT sensors in data collection, asset tracking and service delivery.

A different ball game

While IoT presents a significant business opportunity, translating this into revenues would require telcos to go back to their drawing boards. Telcos have excelled in connecting phones, tablets and other devices, but connecting and managing cars, meters, home appliances and machine sensors will require innovative business models.

IoT devices exchange tiny bits of data, with varying degrees of time-based applications. For instance, for a connected car travelling at a speed of 100 km per hour, a delay of even 100 milliseconds in data exchange could be fatal as the car would travel for another few kilometres before applying the brakes. Telcos must realise that the business value of an IoT deployment cannot be fully tapped without appropriate data management. Refining data from IoT platforms and turning it around into smart data will help telcos monetise it to create incremental revenue.

Achieving success in the IoT space also requires a deep understanding of the different industry verticals and their needs. Telcos would have to expand their portfolios to capture new use cases as well as develop solutions for greenfield segments.

Over the next five years, telcos must draw up creative IoT strategies to enlarge the focus, moving beyond connectivity towards service enablement platforms, apps and services. IoT devices need an environment that ensures continuous application availability, adapts to new application deployment and promises scalability. Of course, only those telcos that are capable of creating and managing an appropriate ecosystem of service partners will be able to taste success.

Akanksha Mahajan Marwah

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