CSP IoT revenue growth will accelerate gradually through 2024 as more 5G use cases become commercially available

An increased focus on value-added services is necessary to maximize CSP IoT revenue as connectivity growth is limited by low ARPU connections

IoT revenue is growing steadily but has yet to significantly impact CSPs’ overall financial positions

TBR estimates global CSP commercial IoT revenue increased 20% year-to-year to $26.8 billion in 2019. Despite sustaining strong revenue growth, global CSP commercial IoT accounted for only 2.6% of global CSP wireless revenue in 2019, in TBR’s estimates, which was insufficient for many CSPs to fully offset erosion within challenged segments such as video and legacy network services.

Most Tier 1 operators have begun integrating multiple low-power network technologies such as LTE-M and NB-IoT to attract customers by providing greater flexibility and supporting a larger range of devices. However, offering multiple low-power connectivity options is proving to be unviable for some operators, due to added network costs and the need to generate high subscriber connections to achieve significant ROI because of low average revenue per user. This trend is evidenced by NTT Docomo’s discontinuation of its NB-IoT services in March.

Providing accompanying solutions beyond connectivity is essential for CSPs to maximize IoT revenue

Given the low ARPU generated by IoT devices, CSPs must evolve their IoT business models beyond solely providing cellular connectivity to maximize revenue. Taking a business model approach of being an agent of digital transformation, rather than merely an IoT connectivity pipe, enables CSPs to more effectively cross-sell accompanying solutions in areas including professional services, security and cloud.

Owning content and platforms, such as data visualization tools for car telematics, is another means for CSPs to augment IoT connectivity revenue. Collaborating with the broader technology industry, especially with webscales, is also enabling CSPs to foster portfolio innovation while capitalizing on reseller opportunities.

TBR’s Telecom IoT Market Landscape, which is global in scope, deep dives into the IoT-related initiatives of stakeholders in the telecom market including telecom operators, cable operators and vendors that supply the telecom market. This telecom-centric report focuses on the commercial IoT endeavors of stakeholders in the telecom market, but also touches on consumer IoT. The research includes key findings, market size, regional summary, technology trends, use cases, verticals, operator and vendor positioning and strategies, and acquisition and alliance strategies and opportunities specific to the telecom industry.