A new report from ABI Research and InterDigital recommends that carriers adopt fresh strategies to establish a strong position within the Internet of Things (IoT) market and stay competitive.
The report emphasizes that deploying open, standards-based platforms and solutions is the fastest and most effective way to unlock value from IoT markets. Such approaches enable carriers to adopt new business models and assume expanded roles—acting as aggregators and orchestrators of IoT ecosystems and marketplaces.
Carriers face a key decision: whether to build IoT and smart city platform capabilities internally or to source them from specialized vendors. Each path has distinct trade-offs in cost, time to market, and required expertise.
ABI Research outlines four strategies carriers can pursue:
- Develop platform capabilities in-house. Building smart city or IoT platforms internally lets carriers customise technology tightly and streamline integration with existing systems. However, this option demands significant capital and operational expenditure, as well as deep technical expertise and long development timelines.
- Source IoT technology from third parties. Choosing external vendors gives carriers access to a wide range of platforms and solutions, but the abundance of options can be confusing. Selecting the right partners is complex and may involve revenue-sharing arrangements that affect margins.
- Offer end-to-end services or act as a technology service provider. By delivering complete IoT or smart city services—or positioning themselves as the tech provider behind those services—carriers can capture a larger share of value. This route requires a coherent strategy, sophisticated service design, and typically a longer time to market, but it can yield higher returns.
- Engage broader ecosystems and embrace open-source and standards. Expanding into wider technology and market ecosystems, and adopting open-source and smart city standards, enables carriers to take on aggregator and orchestrator roles. This approach helps foster interoperability and scalability while opening new revenue streams across ecosystems.
Calls for carriers to rethink their IoT strategies are not new. Industry bodies have repeatedly highlighted that connectivity alone will not deliver the majority of IoT revenue. For example, the GSMA has previously argued that connectivity will represent only a small fraction of the overall IoT revenue opportunity by 2025, and that operators must pursue additional revenue streams.
ABI Research has also published analysis on related developments. In a report titled “The Emerging Role For Smart Homes In The Smart City,” ABI Research finds that smart home devices and services are increasingly influencing broader smart city programs. The overlap between smart homes and smart cities creates an expandable IoT resource: smart home infrastructure and services can be leveraged by smart city initiatives. ABI Research expects this convergence to accelerate over the next five years, presenting opportunities for providers that can integrate and scale services across both domains.
Overall, the report advises carriers to adopt open standards and ecosystem-focused strategies. Whether by building internally, partnering with specialized vendors, delivering end-to-end services, or orchestrating broader ecosystems, carriers that choose the right mix of approaches will be better positioned to capture value as IoT and smart city markets evolve.