物聯網－ International Telecom Society Speech

Good afternoon, Ladies and gentlemen, thanks for attending the workshop today. I will share some perspectives on IoT from a telecom operator's view.

 

Some of you may have ever heard. There will be more than 50 billion connections for IoT in the coming 10 years.  50 billions!  It is a number near 10 times of current mobile subscribers. All of them will connect to internet. It is definitely a good opportunity for Telecom operators whose core business is connectivity.  But are there any insights?  Let me share by three sections: the trends, the opportunities and the challenges.  

 

There are three Trends of IoT business models. First, IoT is a Global business. Second, applications and services are revenue drivers . Third, partnership is key successful factor.

 

Considering the manufacturing efficiency and product lifecycle management, I find IoT is on the global business track. Many IoT devices and services are sold globally. Only connectivity is provided locally. For example, for connected cars, the components may be manufactured in one country, assembled in another country and then sales in the other one. The auto companies need connectivity from different operators. They may look for any alliance to provide a global connectivity management solution. You see Bridge Alliance and GMA are trying to serve the need. And Taiwan Mobile is a founder member of Bridge Alliance.  

 

Let's see the Global IoT opportunity research by Machina.  It compares the IoT revenue between 2014 and 2024.  The revenue in 2024 is around 5 times over that in 2014. We can split the revenue mainly by 5 categories. The "DEVICE" category takes share by 30%. The "CONNECTIVITY" only 1%. and combining " SERVICE, PLATFORM and APPLICATION", the three categories 46% .  So, obviously, telecom operators should not count on "CONNECTIVITY" only, instead, they should consider entering " SERVICE, PLATFORM and APPLICATION" categories.

 

Let's see another research from Ovum. There are many players in the IoT value chain. From the left side, platform vendors like Jasper, Gemalto, ThingWoxs, and so are the Network, connectivity, application, service and hardware vendors. To the right side, there are many different verticals and customers, such as connected car, smart home, smart health and so on. Every vertical has its domain knowledge and expertise. It is impossible for any single player to fulfill the full end-to-end IoT value chain. Operators can play the role as a facilitator to glue the partnership and enhance the ecosystem.

 

Now, let's see the three main opportunities for telecom operators. First, from connectivity to platform. Second, from silo to convergent service. Third, from local SIM to global eSIM.

 

Connectivity is the core business for operators. And they do a great job in Taiwan. At the same time, they have cultivate competence and accumulate many resources. Networks, billing & operation systems, SIMs, channels and customer bases are all their resources. Every operator can utilize them to go upwards. To build platform as a service in IoT era. Moving from "CONNECTIVITY" to "PLATFORM" in the beginning, then find opportunities in " SERVICE and APPLICATION".

 

Regarding  " SERVICE and APPLICATION", those operators with Cable TV or fixed broadband networks will take better position. Many consumer IoT services can be integrated with internet services and displayed on different screens like TV, PC, smart phone and even screen on connected cars. For example, some consumers may fetch his health information from wearable devices and then read them on the screen of connected TV. For another example, some consumers may install home security and automation service and then control or view their home service on the screens of remote TV or connected car. Anyway, the consumers will enjoy the convergent services cross multiple screens, including IoT, entertainment, online shopping and any services together.

 

As I mentioned, IoT is a global business. Embedded SIM could be a good solution for multinational manufacturers. According to the forecast by McKinsey. eSIM will take a very strong growth rate in the coming years. 95% CAGR!  Taiwan Mobile joined Bridge Alliance to demo the business case at Mobile World Congress in Barcelona this year. Technical feasibility has been proven and enterprise needs are justified. But some other legal or business issues to be discussed.  

 

Regarding the challenges, data security, regulation and standard are major three.  

 

First, we know data security is a key issue. Data security may increase much computing loading. On the other hand, we also expect IoT device can be lower power consumption, lower latency and lower cost.  It is a challenge to balance higher security and light weight computing. 

Second, telecom operators should comply with law and regulation. Regulation may have much operational limitation.  On the other hand, IoT services like some OTT services may face global competition. It is a challenge for operators to follow the regulation or get over competition.

Third, telecom operators usually prefer following technical standards. But standardization usually takes time to finalize. Even though it is finalized, it still needs longer time for device and equipment go to market. On the other hand, time to market is very important in IoT service. It is a challenge for operators to wait for standard or take workaround solution.

 

That's all. I share some personal perspective regarding these market trends, opportunities and challenges of operators in IoT market. I hope it is helpful. And welcome to give me feedback.