selling IoT connectivity presents a challenge for traditional telecom providers

#News(General) [ via IoTForIndiaGroup ]

The emergence of a new type of connectivity offer has multiple implications for traditional operators and alternative providers
The following implications arise following the introduction of these new categories of connectivity type.
IoT connectivity

The public – and often low – prices will put pressure on prices offered by all providers. Even customers that will not use a provider such as Twilio or 1NCE will look at their prices and challenge significantly higher rates from traditional MVNOs and MNOs.
Lower prices will force providers to pay greater attention to the cost base. The new entrants will hope that MNOs do not react to the low prices (or are slow to do so). This is a risky strategy. Assuming that established providers do react to new entrants’ initiatives, all parties will need to look at their cost base. In the consumer market, MVNOs have mostly succeeded in offering low prices where they had a cost advantage, such as low-cost distribution (in the case of Lebara) and support channels (such as GiffGaff). IoT MVNOs will also need sustainable cost advantages, but these may be more difficult to identify if the underlying technology is common to all (for example, virtualised core networks). Distribution and support will be less important in a world of eSIMs and self-service. MVNOs will also rely on wholesale deals for access.
Competition could become more about features than price. Public pricing, and the lower prices that will likely result, may shift competition away from price. Again, we are assuming that the larger players will reduce prices, as they eventually did in the consumer market to compete with low-cost MVNOs. The spread of prices between different providers will narrow and connectivity providers will compete on other factors, such as features and services. These could include the features themselves (platforms, security and hardware) and how they are accessed (such as via API), as well as the levels of support and service. To draw an analogy with the cloud market, AWS’ competitive advantage is its extremely extensive feature set and the ecosystem it has built, not its price.

The consultative model may be under threat from IoT MVNOs’ business strategies. The traditional model of selling connectivity, with multiple discussions, RFI/RFP phases and bespoke products, may be under threat. Certain customer segments will always need extra guidance and support that self-service models cannot deliver – in particular, for more complex and higher bandwidth services. However, customers that want to connect low-cost and low-bandwidth devices (such as consumer electronics) may not be willing to pay extra for higher quality services

Read More..