By the year 2020, converged telecoms company Ericsson predicts a world connected by 50 billion devices, and operators must prepare for this inevitable reality.
This is according to Mats Alendal, director of strategic marketing at Ericsson, speaking during his presentation yesterday at the Southern Africa Telecommunication Networks and Applications Conference, being hosted at the Spier Wine Estate, in the Western Cape.
Alendal argued that traditionally the telecommunications market has been viewed as a vertical industry, but this is changing and the industry is morphing into a horizontal one.
He said the change is indicative of the prevalence of telecoms technology in other industry verticals and consumer electronics.
This industry change will result in cross-industry innovation, which - in turn - will drive the notion of “connected everything”. Alendal defined connected devices as any devices that are capable of two-way communication of non-static data.
By 2020, the world will be surrounded by approximately 50 billion connected devices, he predicted. Alendal argued that people's need for convenience, society's need for sustainability, and business's need for sustainability would be the key drivers for this connected reality.
“Anything that benefits from a network connection will have one,” he stated.
Changing business model
Alendal pointed to research from Strategy Analytics, which predicts the mobile machine-to-machine communications market will grow from $16 million in 2008, to more than $57 billion, in 2014.
Telecoms operators will have to adapt to harness the potential of this boom, he advised. The concept of connected everything would likely result in huge diversity in subscription types, as well as complex and long-term, multifaceted business relations.
He predicts that the revenue per connection will be low. “The realisation of the business potential in a 50 billion-connected devices market requires new support systems, processes and business models.”
Players will have to consider differentiated offerings per device or application to maximise the overall connectivity business. He argued that the connectivity market would be driven through bundled offerings.
Operators will have to minimise cost per SIM to maximise the addressable market, suggested Alendal. And with the move into vertical markets, operators will have to up the value offering to include services such as data collection and analysis.
Players should begin to focus on specific applications and services to reach various vertical markets, he concluded.
Related story:
Pandor prioritises telco funding
Share