Machina Research: Vodafone tops list of global operators exploiting IoT today

Godfrey Chua, principal analyst at Machina Research

Vodafone continued to top the table of communication service providers (CSPs) exploiting the opportunities of the Internet of Things (IoT) market, according to Machina Research.

The UK-headquartered operator was ahead of U.S. operator AT&T in Machina Research’s latest annual CSP Benchmarking Survey, which reviews the IoT operations of 17 major operators globally.

Deutsche Telekom, Telefonica, Orange, and Telenor were among the list of European operators that Machina Research noted have invested significant financial and human resources to build sizeable IoT businesses. U.S. operators Verizon and Sprint/Softbank are also on the list.

The top 17 operators increased the number of cellular IoT connections by an average of almost 30 per cent in the past year, Machina Research noted. The pace of growth highlights the importance of IoT to operators’ future success, given that their traditional businesses typically registered single-digit growth, the company added.

Godfrey Chua, principal analyst and author of the Machina Research report, said the study highlights that operators are “working hard to transform themselves” from traditional service providers focused on selling voice minutes and data packages.

The CSPs analysed “are investing billions into technology and capabilities that enable them to take sales conversations beyond connectivity into discussions that focus on solutions that solve customer business problems,” Chua added.

Machina Research also noted that the approach by CSPs to the IoT sector began to diverge over the past 12 months. While some continue to focus on horizontal connectivity and associated services, which typically sees operators take a linear path from wholesale to vertical markets, others are opting to evolve their IoT business in vertical channels alone.

Chua said it is crucial that CSPs consider how to strike the “right balance between vertical and horizontal approaches, as well as key areas, be it a specific vertical or service segment, to focus their finite resources on.”

The company added that a third potential approach sees smaller service providers hand over some control of their IoT business to third party companies. However, the company said this method has yet to become a definite trend.

“At the end of the day, one-size does not fit all when it comes to a CSP strategy in IoT,” Chua said, adding that operators must consider market conditions, “geographic scope and scale of operations, and investment and risk appetite”.

For more:
- see this Machina Research release

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