Are telecom providers fully capitalizing on the Internet of Things (IoT)? A new Ericsson study suggests that while service providers recognize the considerable potential of IoT, significant gaps remain that must be addressed.
The research, titled “Exploring IoT Strategies,” examined ten of the top 30 mobile broadband service providers and ten industry IoT leaders to develop a framework that maps telecoms’ routes to IoT revenue. Respondents consistently viewed cellular IoT and emerging 5G technologies as potential game-changers for IoT adoption and growth.
The report defines four possible roles for service providers in the IoT value chain: network provider, connectivity provider, service enabler, and service creator. It also describes three typical strategic approaches—offering-led, market-led, and quality-led—and shows how operators can evolve toward higher-value capabilities, particularly those associated with service creation.
However, transitioning up the value chain is not always straightforward. The study notes that offering-led operators—often challenger brands with lean organizations and limited resources—tend to remain in the lower-value network provider role. Attempting to move beyond that role without the right resources or capabilities can create challenges. In contrast, quality-led operators usually possess comprehensive capabilities and can integrate existing systems into more advanced IoT initiatives.
Alarmingly, 70% of respondents reported they lack a clearly defined strategy to capture IoT revenue. To address this, Ericsson proposes an IoT positioning framework. Using the four core roles, operators can align themselves with one of four sub-roles to determine a clearer market approach: supply (delivering cellular IoT networks, platforms, or applications); govern (overseeing deployment-to-operation lifecycles); manage (operating and providing services across multiple networks); or transform (helping customers reshape their business models and operations through IoT).
Looking ahead, most operators are aiming to move into higher-value segments: four in five respondents indicated plans to shift toward service enablement or service creation over time.
“The report confirms the importance of IoT to the current and future business of leading service providers, no matter where they operate in the world,” said Jeff Travers, Ericsson’s head of IoT.
Travers added that service providers are treating IoT as a distinct business opportunity—investing in new technologies, adopting revenue-sharing models, increasing use of indirect channels, and developing “as-a-service” and online delivery models. He noted that operators are also driving innovation through closer collaboration with partners and customers.
The full Ericsson report provides a more detailed view of the framework and the strategic choices operators face.
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