Which communications service providers are the leaders in IoT?

In February 2023, us published the ‘Communications Service Provider IoT Peer Benchmarking Report 2023‘, a comprehensive analysis of the strategies and capabilities of 23 leading global providers of cellular-based IoT connectivity (1NCE, AT&T, BICS, Deutsche Telekom IoT, Emnify, Eseye, KORE, KPN, NTT, Ooredoo, Orange, Sierra Wireless, Singtel , Soracom, T-Mobile US, Tele2, Telefónica, Telenor, Telia, Telit, Verizon, Vodafone and Wireless Logic).

One of the key features of the report is an assessment of the relative capabilities of each of those CSPs to address global IoT connectivity, an assessment that saw Vodafone at the top of the stack, strong performance from other major MNOs, and a great progress of IoT MVNOs. . This article provides a summary of that aspect of the research: which CSP is better?

There is no ‘best’

The question of which of the 23 is the best provider is the most reductionist of questions. The answer will always be “it depends”. As an analyst, I always try desperately to give that answer to questions, but sometimes it’s unavoidable. It depends on countless factors, including the capabilities you need, the location of your devices, your preferred business models, or even which cloud provider you use.

If you’re an automotive OEM looking to connect cars in the Asia-Pacific region, you’d do well to look at Singtel, particularly since it’s able to bring together a group of operators in the region under the auspices of the Bridge Alliance. If you want to connect smart meters in Sweden, you’re unlikely to look much further than Telia. If you are a Japanese heavy equipment manufacturer who wants easy integration with AWS, Soracom will be at the top of your list.

But there are best practices

However, there is an interesting underlying question: what is the best practice in IoT connectivity? This is a much better question to ask if you are a business thinking about connecting IoT devices. This helps identify the types of capabilities they should be looking for and therefore shortlist providers accordingly. This is a better role for our analysis than trying to single out the individual carrier that will be the answer to each buyer’s needs because there isn’t one.

As a result, in this report, we have chosen to focus on innovation and best practices: which of these IoT connectivity providers have the most scalable, compatible, transparent, and/or future-proof approaches to addressing the various elements of IoT connectivity and adjacent IoT services. That way we can, in a way, provide a useful comparison of capabilities.

Of course, it also helps IoT connectivity providers themselves to understand what their peers in the space are doing and examine some of the best practices we’ve identified to understand whether it would be appropriate for them to implement them.

“…We…focus on innovation and best practices: which of these IoT connectivity providers have the most scalable, compatible, transparent, and/or future-proof approaches to addressing the various elements of IoT connectivity? IoT and adjacent IoT services”.

-Transform Insights

Two dimensions: IoT connectivity and IoT services

There are countless ways in which we could have sought to compare the CSPs we reviewed. We have chosen to use a framework set out in our recent report’A new taxonomy for IoT reveals new roles and opportunities‘ (January 2023), which is explored in a recent blog post’A new taxonomy for the Internet of Things‘. In that report, we set out our perspective that there are now seven service domains within the IoT. One of them is related to connectivity management, that is, the provision of managed connectivity through public networks. The companies described in this report are collectively market leaders in such services.

In addition, we also identified six other domains, covering areas such as devices, cloud/perimeter, security, and compliance, all of which are potentially relevant to connectivity providers. These are very close to IoT connectivity and offer significant opportunities for differentiation of a service offering. These broader IoT services provide the second dimension against which we rate our CSPs.

Our rating of a CSP’s capabilities in the Connectivity Management Domain (not to be confused with just ‘Connectivity Management Platform’), i.e. IoT connectivity, encompasses six elements, discussed below:

1. Multi-country deployment support: A variety of mechanisms exist to connect devices across multiple geographies, including roaming, wholesale, multiple IMSIs, eSIM profile donation, and various combinations of these. In rating this, we give particular consideration to service compliance (particularly related to specific countries, including Brazil, China, India, and Turkey) and control, rather than the use of specific approaches. This category also considers the availability of rich features for NB-IoT and LTE-M, such as PSM and eDRX.
2. Scalability of the platform and core network elements: IoT connectivity must scale to support billions of devices. As a result, highly scalable core network and connectivity management capabilities will be vital in the future.
3. Global traffic management – ​​Many CSPs have functionality specifically designed to optimally manage global IoT data flows, including peering and interconnection, as well as local breakout.
4. Connectivity Management Features: Focuses on enhanced features that enable optimization of connectivity delivery. It includes consideration of connectivity management platform (CMP) features (including service tiering) and other capabilities, such as device applets or connectivity twins.
5. Commercial Capabilities: The degree to which the CSP focuses on selling direct to companies (as opposed to wholesale) and reflects the strength of marketing channels and investment in support services.
6. Multi-carrier support: This incorporates considerations of supporting connectivity using a different technology than regular terrestrial 3GPP cellular. It includes considerations for the availability of mobile private networks, LoRaWAN and LEO satellites, as well as having optimized support for NB-IoT and LTE-M.

IoT services

This considers the capabilities of CSPs in the other six IoT service domains.:

1. Devices and device management: Devices are the starting point for many IoT implementations. There is a growing need for cross-optimization of devices with connectivity, and the advent of eSIM drives a greater correlation between device sales and connectivity. Device-related capabilities may include hardware provisioning, integration and cross-optimization with connectivity, and device lifecycle management, including inventory and compliance.
2. Cloud/Edge Management: IoT applications are increasingly deployed in the cloud and there is a growing demand for edge computing to take advantage of low latency and reduce cellular traffic. A key role here is integrating data into cloud functions (for example, with cloud connectors) and orchestrating processing and storage across different cloud and edge layers.
3. Enterprise integration management: IoT is implemented to feed data into a company’s back-office systems, for example, CRM or ERP. Managing the flow of semi-processed data in customer systems is a close adjacency for IoT connectivity. Typically, this capability is provided by application enablement platforms.
4. Security: This cuts across device, network, transport, and end-to-end security. There is a set of standard features offered by many connectivity providers, including private APNs, IP VPN, and IMEI blocking. Higher-level capabilities include transport layer security (for example, IoT SAFE), network diagnostics, and troubleshooting tools. At the highest level is a complete end-to-end service suite including policy design and management.
5. Compliance – With an increasing number of regulations around IoT, for example, always-on roaming, data sovereignty or know-your-customer, there is an increasing requirement for services associated with compliance. Some CSPs are beginning to include fulfillment services within their offering, including a managed service.
6. Contextualization – Often a key differentiator is simply having experience in a particular vertical to understand how all the other elements need to come together to address customer requirements. This is not about the provision of vertical applications, rather the focus is on expertise/knowledge within the vertical and therefore the ability to feel the customer’s pain and speak their language. It also ties into some of the other layers above, for example contextualizing security, regulatory, or device requirements.

We do not consider moving up the stack with vertical solutions

The seven service domains focus on the provision of horizontal services. Many CSPs have also chosen to step up and offer complete end-to-end vertical solutions for end customers, for example Verizon’s fleet management offering or Vodafone’s connected car offering. We have included an extensive discussion of these capabilities within the individual CSP profiles, but have chosen not to include a comparison of these capabilities as part of the report. It’s hard to find enough commonality between providers to allow for a decent comparison, and furthermore, the competitive environment for such services is a set of vertical-specific solution providers rather than other CSPs.

And who comes out on top?

Vodafone emerges as the best rated provider in the analysis, both in IoT connectivity and IoT services. Other major MNOs are also doing well, including Deutsche Telekom, NTT, Telefónica, Verizon and Orange. In particular, they tend to score strongly in broader IoT services, reflecting their scale and presence in other areas of ICT, including security and broader consulting.

By contrast, the increasingly assertive IoT MVNOs are focusing much more specifically on pure IoT connectivity and doing a great job with that. In IoT connectivity, it is often the MVNOS that are doing some of the most innovative and exciting work. We single out 1NCE, Emnify, Eseye and Wireless Logic for bringing together compelling connectivity offerings that are gaining traction, plus KORE, which has also done a lot of work to enhance its broader offering of IoT services, including around devices. .

It’s important to note that many of these CSPs are going through some periods of change right now. Vodafone is going through a process of expanding its IoT unit somewhat, and AT&T has just resurrected its Connected Solutions business under its Emerging Business. In addition to this, Deutsche Telekom, as the relatively new DT IoT business, is increasingly working with T-Mobile on the year-long T IoT initiative. Ooredoo, Sierra Wireless, Telenor, Telia, Telit, and several others have recently gone through a period of change. There’s a lot more innovation, and possibly a bit of IoT shrinking, to come.