Top ten mobile operators have 76 percent market share in cellular IoT

Top ten mobile operators have 76 percent market share in cellular IoT

Top ten mobile operators have 76 percent market share in cellular IoT

A new report from the IoT analyst firm Berg Insight says that the ten leading global mobile operator groups have a combined market share of 76 percent in cellular IoT.

The top players reported a combined active base of 407 million cellular IoT connections at the end of H1-2017.

China Mobile was number one with 150 million IoT connections in the period. Vodafone ranked second, with a reported 59 million connections, ahead of China Unicom with 50 million IoT connections. AT&T and China Telecom ranked fourth and fifth with 36 million and 28 million IoT connections respectively. Deutsche Telecom, Softbank/Sprint, Verizon and Telefónica currently had in the range of 15–20 million cellular IoT subscribers, which are growing at yearly rates of 15–30 percent. Telenor was the last player in the top ten with approximately 12 million cellular IoT subscribers.

Tobias Ryberg, Senior Analyst at Berg Insight and author of the report, said:

“The Chinese mobile operators achieved tremendous volume growth in 2017, driven by accelerating uptake of cellular IoT in the domestic market. China Mobile is believed to have reached 200 million cellular IoT connections at the end of 2017”.

Vodafone and AT&T are consolidating their positions as regional market leaders in Europe and North America respectively, serving multinational clients on a global basis. “In 2017, Vodafone extended its lead in the European market”, says Mr Ryberg. “The competitors are however also gaining momentum and the expanding market has room for multiple players”.

In terms of revenues, the Western mobile operators are ahead of their Chinese counterparts. Berg Insight expects that at least three operator groups – AT&T, Verizon and Vodafone – will generate more than US$ 1 billion in revenues from IoT in 2018.

Berg Insight chart: cellular IoT subscribers (World 2016-2022)“The main strategy for growing IoT revenues is vertical plays in major application areas,” says Mr Ryberg. “Verizon, Vodafone and others have made significant acquisitions in the connected vehicle space to extend their product portfolios. AT&T and Deutsche Telekom develop dedicated practices for smart cities and many operators seek to play leading roles in national projects in areas like smart metering and electronic road charging”.

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IoT Business News

Can drones and commercial aircraft safely share airspace?

Eyes on the sky: Can drones and commercial aircraft safely share airspace?

In a follow-up to last week’s interview with Professor Antonios Tsourdos from Cranfield University’s new DARTeC research centre, Internet of Business asks the professor about the future of drones in UK airspace.

Internet of Business (IoB): Can drones be integrated into civilian airspace and if so what is needed to make this happen? What would an integrated system for aircraft and drones look like?

Antonios Tsourdos of Cranfield University's DARTeC

Antonios Tsourdos of Cranfield University’s DARTeC

Professor Antonios Tsourdos (AT): Our Air Traffic Control (ATC) systems run on the basis of principles that are now 60 years old. It’s partly a result of this context that UAVs [unmanned aerial vehicles] are perceived as an unmanageable threat to safety. Yes, safety must come first, but airspace management must also evolve in line with the needs of societies and economies. If the potential of UAVs and related innovations as a platform for economic development aren’t already in the minds of government policy-makers, they soon will be.

A major research project AIRSTART (Accelerated Integration of Reliable Small UAV systems Through Applied Research & Testing), funded by Innovate UK via the Aerospace Technology Institute is due to run until the end of this year. The collaborative project is being led by Airbus Group Innovations, working with a range of partners and stakeholders (including the Civil Aviation Authority, NATS and UAV trade association ARPAS-UK); research institutes such as Cranfield University and the University of Southampton; small and medium-sized enterprises including advanced rotary engine manufacturer Rotron; and end users for the technology, such as the Royal National Lifeboat Institute (RNLI), for search operations, and Western Power Distribution, for inspection of power lines.

There are four pillars to the AIRSTART research: detection and avoidance of air traffic to improve safety and enable unmanned aerial systems (UAS) operations in crowded or regulated airspace; smart perception to enable UAS around ground-based objects and infrastructure; secure and robust communications using lasers to provide high-speed data and situational awareness, as well as pinpointing the vehicle’s exact location in-flight; and, developing high-efficiency engines for UAS operations to extend flight durations and payload, while decreasing costs and increasing productivity.

Read more: UK students develop drone traffic management system

Airside functions

IoB: Are you thinking about systems that include drones as performing airside functions such as carrying goods around – or other tasks?

AT: Autonomous vehicles have an important to role to play in on-ground activities. Modern aircraft are expensive and sophisticated pieces of kit, and on the runways they are exposed to a flurry of work by staff, under pressure and working at speed – bringing dangers for people and aircraft. Autonomous systems for baggage loading, refuelling, monitoring and providing maintenance, each of them sharing data, can make on-ground services more efficient, reliable and safer.

IoB: What would be required on the part of a private drone owner to make this system work?

AT: Integrating UAVs into airspace will need to be based around the new national licensing scheme from drones weighing over 250 grams, backed up by formal legislation and tough penalties for unlicensed and irresponsible activity, with every UAV needing to work above a set height or outside of particular limited areas, registered on a national database.

UAVs will be trackable at all times, with the potential to be made inoperable if regulations aren’t respected. The range of practical uses for UAVs, especially as they become more accepted as part of everyday operations and services, means they are also going to be attractive for criminal activity.

Police will need to play their part in ensuring there’s safe and responsible use of UAVs, just as they do with motor vehicles. Police guidelines on dealing with dangerous UAV use highlights the struggle with anticipating the impact of new technologies, recommending that rather than attempting to take over control of a rogue UAV, police officers should wait for its battery to run out. More officers in future will need to have a level of training in the safe operation of a UAV, to defuse any potential imminent dangers as quickly as possible and avoid any threats to public safety.

The technology already exists for police or other authorities to override the controls of UAVs posing a threat, and this kind of management control is likely to form an important foundation for an integrated manned and unmanned airspace.


For more insight into the world of connected aviation and the impact that IoT technologies will have on airlines and airports, readers may be interested in attending our Internet of Aviation event, to be held at London Heathrow on 7 & 8 November.

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Internet of Business

Americans happy to share data in emergencies, but snooping fears remain

Americans happy to share data with emergency services law enforcement

The majority of US consumers would happily share their personal data with police or healthcare providers via IoT devices, but there are limits to what they will share and with whom, according to a survey from Unisys Security.

The results were released in the 2017 Unisys Security Index, a global study of 1,000 adults in the US during April 2017, which gauges their attitudes on a wide range of security issues.

In general, Americans support IoT applications that promote safety and convenience in areas such as law enforcement and healthcare, the survey found. Consumers said they also see potential value in areas such as air travel and banking.

Who? What? Why?

Their enthusiasm depends on a number of factors, however, including why the data is being collected, by whom, and how it will be used.

For example, 84 percent of Americans surveyed said they support the use of a button on their smartphone or smartwatch to notify police of their location in an emergency. There is a thin line marking how far they would be prepared to share, though: only 32 percent saying they support police being able to monitor data on, say, a fitness tracker at anytime in order to determine their location.

Similarly, the majority of respondents (78 percent) support the ability of medical devices such as pacemakers or blood sugar sensors to immediately transmit significant changes in health conditions to a patient’s doctor. By contrast, only 36 percent support health insurers accessing fitness tracker data to determine a premium or reward customers for good behavior, the survey reveals.

Read more: Healthcare IoT world must prepare for GDPR, lawyers warn

Barriers to acceptance

Barriers to IoT acceptance arise when consumers are unable to see a compelling need for an organization to obtain their data, Unisys said. As evidence of this, nearly half (49 percent) of those who did not support using a smartwatch app from a bank or credit card company to make payments said they were most worried about the security of those transactions. Specifically, 90 percent of those respondents are concerned about hackers or malicious malware gaining access to their financial transactions.

The same is true of medical devices, with 78 percent of consumers reporting some level of concern and 51 percent “very” or “extremely” concerned about hackers or malicious intruders gaining access to IoT defibrilators, pacemakers or insulin pumps.

Convenience versus control

“Americans want to obtain the efficiencies and security benefits of the Internet of Things (IoT), but not at the expense of losing control of their personal data,” said Bill Searcy, vice president, Justice, Law Enforcement and Border Security for Unisys and a former FBI deputy assistant director.

“For the IoT to succeed, governments, healthcare organizations, financial institutions and other enterprises must take steps to assure the public that personal data collected from IoT devices will be secure and that privacy will be protected.”

Read more: UK police to embrace IoT in age of ‘Digital Darwinism’

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Internet of Business

Analysys Mason’s IoT platform contracts tracker: Actility is winning a high share of telco deals

Analysys Mason's IoT platform contracts tracker: Actility is winning a high share of telco deals

By Ahmed Ali, Senior Analyst at Analysys Mason.

Operators and vendors are keeping a close watch on contracts for IoT solutions. Analysys Mason has gathered the details of 280 deals in our recently published IoT platform contracts tracker*. The key trends we have identified in this data are as follows.

  • Vendors have an opportunity to do deals with large operators, but solutions need to be targeted (for example, towards specific vertical markets) or differentiated from those of established vendors. Big advanced operators, such as AT&T and Vodafone, have already signed deals for solutions across the value chain.
  • Smaller operators (such as Telecom Italia and TELUS) have suppliers for connectivity management but will need support if they are to compete in other aspects of the value chain (for example, data management and application enablement).
  • The market is relatively mature – a few vendors are dominating each section of the market. For example, Cisco Jasper, Ericsson and Vodafone have won around two-thirds of the publicly announced contracts for connectivity management. Cumulocity and PTC/ThingWorx have won around half the contracts for application enablement.
  • Established telecoms vendors are offering solutions that are close to connectivity, but new vendors have opportunities in this area – for example, Actility has taken a strong position in the low-power, wide-area (LPWA) network space.

Our analysis reveals that AT&T, Deutsche Telekom, SoftBank and Vodafone are well advanced with their IoT solutions

The IoT software stack has components that can be grouped into three basic layers:

  • connectivity management
  • device and data management
  • application enablement.

Figure 1 : Operators’ IoT deals and selected examples, 2Q 2017

Anaysys Mason : IoT platform contracts tracker table

The number of publicly announced contracts tells us how advanced each operator is in developing its IoT solution. The operators with the lowest number of deals (categories 3 and 4) are generally at early stages of their IoT roadmaps and are looking to enable connectivity and device management capabilities. These are mainly operators in regions where IoT markets are relatively underdeveloped and the drivers to invest in IoT platform features beyond those of basic management are few. On the other hand, operators with multiple platform deployments (categories 1 and 2), such as AT&T, Deutsche Telekom and Vodafone, are more advanced with respect to their IoT roadmaps and operations are competing in more demanding markets. These operators continue to tighten their control over the IoT network with multiple connectivity and device management platforms while exploring different monetisation approaches and use cases through application enablement platforms.

Actility is one of a small number of start-ups to win a significant number of contracts

The tracker also tells us which vendors are most successful. Vendors with the highest number of deals are Cisco Jasper (60 contracts), Ericsson (21), Gemalto (26) and Vodafone (31, of which 7 are for third parties). All these vendors provide connectivity management tools primarily. Actility is one of the few start-ups that has managed to capture a new opportunity in the connectivity market by enabling LPWA networks, while established vendors continue to deliver cellular management solutions.

Cumulocity and PTC have the highest number of application enablement platform deals. However, telecoms vendors are absent from this market despite having launched similar solutions. For example, Nokia introduced its IMPACT platform but is yet to announce any public deployments. Huawei, NEC and ZTE have a limited number of public deals, which are mainly for connectivity and device management solutions. Cloud and business solution providers such as AWS, IBM and Microsoft Azure are also not high on the operators’ supplier list for IoT but they offer cloud-hosting solutions.

As operators gain strength in the IoT market, their IoT goals shift from providing basic coverage to improving the quality and range of services. Tracking these goals and how they change will help platform vendors understand and optimise their solutions to meet the operators’ varying requirements.

*Analysys Mason’s new IoT platform contracts tracker focuses on operators’ deployments and lists the public contracts that they have with platform and middleware providers. It includes more than 70 operator groups and 50 IoT vendors, and covers deals in 95 countries across 8 regions. It also highlights the main features of the deployed solutions. In total, it covers 280 deals. We have analysed the contracts between operators and vendors to assess where most of the activity is happening (see Figure 1). Vendors are categorised based on their main features, and operators are categorised based on the number of IoT platforms that they have implemented.

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IoT Business News

The Board’s Role in Share Repurchases

Capital allocation is a significant function for company directors. How much of the company’s profits gets reinvested in the business rather than distributed to shareholders through cash dividends or share repurchases is a critical decision companies must make. Boards of directors typically approve a dividend policy and precise amounts for each quarter: Everyone knows that cutting the dividend will result in a sharp decline in the share price.

Yet in many companies, decisions about the level and timing of share repurchases are left to management. That stems partly from differences in legal requirements: The board must formally approve the amount of the company’s quarterly dividend but not its repurchases. Moreover, the implementation of the repurchase program is heavily influenced by the company’s actual cash flows.

Nevertheless, share repurchases are something to which directors should pay more attention. Specifically, directors should carefully consider the capital allocated to repurchases relative to the company’s realistic opportunities for value creation through internal development or external acquisitions. They should be highly skeptical of large repurchase programs that are financed by selling debt rather than paid for out of company profits.

From 2014 through 2016, distributions to shareholders — dividends and repurchases together — consistently exceeded 100% of the net income of the companies in the S&P 500. During the same period, share repurchases for the Russell 1000 companies (excluding financial and real estate companies) ranged from 62% to 71% of the free cash flow (net income minus capital expenditures). These trends seem to reflect a slowly growing global economy, together with the availability of very cheap debt. According to ASR Research, roughly half of all share buybacks were financed by debt rather than profits.

Share repurchases are sometimes justified as a way to maintain and increase a company’s share price. However, this view is not supported by the data. The 100 companies with the highest buybacks in the S&P 1500 underperformed that index from 2005-2016.

Why have these companies underperformed? First, sophisticated shareholders know that share buybacks increase earnings per share (EPS) by spreading the same amount of revenue over a reduced number of shares. To these shareholders, buybacks are seen as a form of financial engineering for companies with weak growth prospects.

Second, executives are notoriously bad at timing their share repurchases — they do a lot of buying when the company’s stock price is high and relatively little when the price is low. That’s why, between 2004 and 2016, companies reduced their share count by roughly 25% but increased their EPS by only 12%.

Third, share repurchases reduce the relative market cap of companies in market-weighted indexes such as the S&P 500. As a result, the giant index funds based on the S&P 500 are effectively forced to rebalance by selling the stock of companies with large repurchase programs.

So how should directors evaluate various uses for a company’s cash flow? To begin with, some buybacks are quite sensible. For example, directors should endorse share buybacks sufficient to fund the company’s plans for stock options and restricted shares for employees. Buybacks at this level would minimize the dilution effects of such plans on the company’s public shareholders. Similarly, directors should support capital expenditures necessary to maintain the company’s asset base. In addition, companies should have enough cash on hand to cope with the vagaries of the business, especially if share repurchases are financed from new debt rather than current profits.

Once these priorities are taken care of, directors must address the issue of capital allocation. Does the company have internal products or research projects that are likely to deliver a return that’s higher than its cost of capital? Alternatively, if the company makes a significant acquisition, will the additional revenues and earnings over time justify the deployment of cash debt capacity? These are the questions that we hear more and more from the large institutional investors such as BlackRock and Vanguard, which hold a majority of the shares in most large, public U.S. companies. Given the difficulties these large investors have trading in and out of big blocks of stocks, they tend to be more interested in long-term value creation than brief run-ups in a stock price.

Nevertheless, some boards capitulate to activist investors on share repurchases without polling their long-term shareholders. For example, having bought less than 1% of the stock of General Motors in 2015, investor Harry J. Wilson persuaded GM’s board to invest $ 5 billion in cash to repurchase shares. Although the share buybacks didn’t seem consistent with long-term value creation (particularly for a company that had recently emerged from bankruptcy), shareholders never got an opportunity to vote on this proposal.

Share repurchases are too important to be left to the discretion of company management.

Boards should set the level of annual repurchases after carefully considering the internal and external opportunities available for the company’s capital as well as the objectives of its long-term investor base. To the extent feasible, directors should support corporate strategies to increase the company’s revenues and profits over several years, and they should look askance at share repurchases that are financed by debt to maintain EPS in the next quarter.


MIT Sloan Management Review