The Promise of the IoT Roaming Business Is a 4-Fold Increase. Can MNOs Make It?

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IoT cellular connectivity continues to grow. According to Juniper Research, 33% of all IoT connections will be roaming by 2027 – a 16% increase from 2021. The pandemic, economic recession, and other factors have resulted in supply chain bottlenecks and component shortages for electronic devices across all verticals. It’s no surprise that enterprise demand for IoT services is accelerating rapidly. IoT has become a viable strategy for many operators to channel new revenue streams.

Following the retirement of 2G/3G networks, Low Power Wide Area Network (LPWAN) will be the dominant technology to support Massive IoT (MIoT) applications. LPWANs such as LTE-M and NB-IoT are inherently designed for use in devices where communication with the network is sporadic and data throughput is low. Their relatively low complexity means that hardware prices are much lower than other 4G modules. As such, they are ideal for telemetry in sensing or monitoring use cases.

The growth of large numbers of low data and low power connections raises challenges with monetization models based on data consumption, especially considering that the charge per transaction has been reduced significantly over the years. Traditional techniques for charging, reconciliation, and settlement are simply not equipped to cope with a world where the growth in roaming traffic events is driven more and more by devices such as cars and industrial equipment rather than smartphones. Additionally, it is difficult to differentiate between devices and network technologies, which prevents operators from effectively creating commercial strategies around IoT roaming.

New business models are required to drive IoT roaming margins, such as charging on a per IMSI per month basis, differential volume-based, or threshold-based charging. Use cases where the wholesale amount is a fixed charge regardless of the usage or number of devices connected also exist.

The total operators’ revenue from IoT roaming connectivity can generate around $87 million by 2027, by targeting these low-bandwidth, permanently roaming, IoT connections with new commercial models. This represents 4 times more than wholesale revenues currently billed by operators, based on the traffic generated by these permanently roaming devices.

Stay tuned for the next blog post, in which we’ll discuss in more detail the challenges around IoT roaming monetization.

To get the latest market insights and learn more about how existing roaming services must evolve to enable MNOs to effectively manage future IoT roaming connections, download the Future of IoT Roaming white paper