In September 2021, TM Forum hosted a panel session at their annual Digital Transformation World Series event, entitled “From connectivity to platforms, applications and services – how to drive growth in IoT”. Martin Creaner, ex-President of TM Forum, hosted the session which included Brian Cappellani, Vice President, Technology Strategy, Hansen; Sudhir Sarangapany, Head of Digital Services, IoT Practice, Vodafone Business; and Fuencisla Merino, Assistant IoT Director, Ooredoo Qatar. The panel members addressed the trends and challenges from their respective standpoints when it came to how Communication Service Providers (CSPs) are adapting to the new opportunities presented by the acceleration of the Internet of Things (IoT).
Developing a growth strategy beyond connectivity
Despite significant investment in infrastructure over the years, it’s no secret that CSPs returns have been modest when compared with other industry sectors. While connectivity services for voice and data remain the lion’s share of CSP revenue, there is limited growth opportunity within that stream. It’s prompted some to question whether the next evolution for them is to move from ‘telco’ to a ‘techco’. During the panel session, Sarangapany describes a symbiotic relationship between connectivity and end to end solutions. Through the development of new end to end solutions, he says, Vodafone can build a growth engine for connectivity.
Another model taken by CSPs that Hansen’s Cappellani describes, is the development of the IoT marketplace. By taking the initiative to build and own a marketplace for IoT, CSPs, like Verizon and others, are helping create the market. “It’s a place where you can go and sell your own end-to-end solutions but also bring together some of the offerings you have on connectivity…” Where solution gaps exist, CSPs can bring in partners whether they offer sensors, applications, or some other required component. In this way, businesses have all the building blocks they need in an integrated manner, but the CSP becomes the trusted provider.
The new role of partners and customers
One of the challenges with this model of course is the shift towards a new notion of the role of the partner and the balance of that relationship. How services are priced, the markup required, how to bring it all into the marketplace and fulfill seamlessly as customers would expect with a digital experience – it’s going to be quite different than what’s been done in the past.
When it comes to a sales strategy for IoT, both Vodafone and Ooredoo see two divisions: the enterprise tier that requires a bespoke solution, and the SMB who is served by a plug and play solution or ‘end to end’ solution as Ooredoo prefer to label it. In Ooredoo’s case, full support is a key part of the strategy even for smaller customers.
“Essentially, it’s about having the right building blocks in place and the cooperation of the customer to truly understand the problem or opportunity.”
Co-creation with customers is a new way of working for some CSPs such as Ooredoo. In the early stages of development, leveraging each party’s area of expertise is critical. CSPs need to adapt to local particularities, which is sometimes best done through a local partner who has the regional business knowledge. Vertical-specific partners might be called whether the industry is energy, construction or something else. Essentially, it’s about having the right building blocks in place and the cooperation of the customer to truly understand the problem or opportunity. Each partner and party involved must understand their role.
Cultural transformation
Traditionally, CSPs have not always worked in the most agile fashion. That’s changing, they are now using more agile methodologies when it comes to product development, performing many iterations and pushing out quickly. This type of design thinking and the willingness to test and fail is essential to the new model. Following development is the question of how CSPs can then launch new products and services through all their channels and systems. Cappellani says that this is where there is real struggle is. It’s difficult for CSPs to foresee all the building blocks that are required.
Where CSPs are ahead is with their customer relationships. The knowledge of the customer is there and the trust over security is there, so while investment will continue to be required, the change that’s required is more of an evolution when it comes to mindset and culture.
When it comes to achieving the end-to-end capabilities of IoT, mergers and acquisitions is a potential strategy for CSPs. Merino warns that some providers have not always been the best at integrating the companies they’ve acquired. She advises that partnerships can be more effective than acquisitions, when done right.
Partnering with the hyperscalers
One of the unique challenges of partnering with hyperscalers such as AWS or Oracle, is defining the relationship where they are not only a partner but also a customer and a competitor. Hansen’s Cappellani sees this as an important factor for success: a key component of IoT apps is how the data that is fed back into the app is processed, and the cloud is a big part of that. How well will your marketplace integrate into the public cloud? Customers will likely have their own accounts and you as the CSP need to make sure that what you are offering works seamlessly with what they have so you can offer a truly integrated solution. Ultimately, as Cappellani states, “The reality is, the solutions are not going to succeed without the scale of the cloud and the role those hyperscalers play.”
“The reality is, the solutions are not going to succeed without the scale of the cloud and the role those hyperscalers play.”
In summary, CSPs agree that an evolution is going to be required in order to meet the demands of IoT and present a competitive offering. However, CSPs have a strong foundation laid out through their business in connectivity, their knowledge of customers and their authority and trust on security issues. How well they work with new IoT partners will be the next test.
Watch the 30-minute panel session here
Interested in more content from DTWS 2021? See our conversation with Telefonica
Anne Benoit
Program & Content Marketing Manager