What are the challenges of the Internet of Things for the telecom industry?

Posted by media on May 31, 2016 at 9:00 AM

EN_T_IoT_Ecosystem_Telecom.pngSource: Business Insider

The telecommunications market was first disrupted by the widespread use of smartphones. Smartphones opened a pandora's box to a new world of free apps offering a multitude of communication services - replacing SMS and phone calls - that only required Internet access in order to function.

We are currently facing a second wave of disruption with the widespread use of connected devices, which looks set explode. Even if there were already 10,000 million connected devices being used in 2015, by 2020 that figure will reach 34,000 million, of which 24,000 million will be IoT devices and 10,000 million will be devices that will mean people are going to be permanently connected to the network through smartphones, tablets, smart watches, etc.1

What are the challenges of the Internet of Things for telecommunications operators?

This post is also available in Spanish.

The IoT phenomenon is a great challenge for network operators as it could herald the latter’s final chance to remain on the digital bandwagon or their relegation to being mere bandwidth providers. So how can telecom companies make the most of this opportunity?


1. Taking advantage of the new 
touchpoints between customers and companies

The explosion of connected devices effectively means the existence of thousands of new touchpoints between consumers and the businesses developing the new technologies that are then used in watches, sunglasses, bracelets, shirts, appliances and a host of new gadgets that offer services that are still as yet unimaginable.

All these new points of contact represent a great opportunity for network operators to expand their business beyond the basic provision of television and Internet services. They must dare to expand their traditional range of products and develop gadgets, applications and platforms whose interface will be in direct contact with the end-user, offering the functionality they need to monitor their health, measure the energy consumption of their gadgets, monitor their sleep, regular water their plants, assess the outcome of their exercise routines, etc.

According to a survey by McKinsey carried out during several telecom sector conferences held in 2015, these new touchpoints created by the radically increased use of smart devices will be one of the main sources of disruption to the industry.

New touchpoints that will be mainstream by 2018





 Smartphone.png  Smartwatch.png  Smartshoe.png  Apparel.png  Glasses.png
Smartphones Watches Shoes Apparel Sunglasses

All these new touch points will also pave the way for network operators to regain control of their interactions with clients, and with it, the ability to generate engagement and maintain customer loyalty.

By enjoying a direct relationship with customers, telcos will have control of their data. In the 21st century, data is synonymous with value, provided that businesses have the adequate analytical tools to draw useful conclusions, that is to say, IoT Analytics. At the end of the day, any long-term profitability will not come about from the sale of gadgets or devices but through analysis, data management and business intelligence. This will allow strategic alliances with other players to better meet the needs of businesses and consumers.

2. Providing a robust connection and uninterrupted service

Given the expected increase of connected devices in the coming years, one of the main challenges facing network operators is being able to offer fast, reliable and uninterrupted connectivity.

Until now, most devices have simply connected people with people, and for this end there has been a level of tolerance for technical errors. But as more objects and machines need to connect to one another and the functioning of companies, hospitals, public organizations and institutions will depend on these connections (not to mention the transmission of personal sensitive data), there is a much infinitely more pressure on operators to perform. Telcos need to maintain the infrastructure currently available while increasing capacity to satisfy the growing demand and ensure that any data transmission actually occurs at the right time, at the right speed without interruptions or "drops."

Consumers, governments and businesses will depend on secure and reliable connections in the era of the Internet of things:
Source: Business Insider

3. Privacy and security

With the increase of connected devices and management of personal data by companies, the privacy and security of customer information becomes a significant issue, particularly given that much of the data shared will be related to people’s health and finances. The worrying possibility that privacy may not be respected and that personal data is at risk of being hacked are the two main barriers that are preventing the use of connected devices from becoming a mainstream practice.

Network operators must therefore accentuate their commitment to safeguarding the privacy and security of customer data; this in fact represents a good opportunity for telcos to differentiate themselves from competitors.

Watch the video: Data security and the Internet of Things I Deloitte University Press

Telcos are not alone in looking to embrace the opportunity offered by IoT since we are all on the threshold of a new technological phenomenon, the so-called fourth industrial revolution. No leaders in this field have as yet been established; moreover, there are still many new opportunities to discover, subject to the creation of new devices and laws to govern any innovations and new use cases. But what is already clear is that companies giving consumers the assurances they need with regards to data protection will have a clear competitive advantage.

Faced with this second wave of disruption that heralds the universal use of connected devices, network operators should take the lead and responsibility that comes with making this new digitized world a reality: on the one hand, they must continue providing the necessary infrastructure to make this new world flourish; on the other, they must create new products and services that require new forms of monetization to capitalize on their infrastructure in the way that OTT players like Google, Facebook or Whatsapp have done in the past, all the while conveying the confidence that customers need to feel that their personal data is in good hands.

Signaturit offers an advanced electronic signature that helps inspire that very same confidence, which is all the more essential when a customer goes to sign a contract. Signaturit guarantees the privacy of all data transmitted through our platform, complying with all European standards on data protection, as well as its security, since we offer data protection at the same level of security as banks and governmental agencies.

This post is also available in Spanish.

Whitepaper eSignature for Telcos and Network Operators


1. Source: Business Insider

Topics: Digital Transformation

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