Growth in “smart everything” is propelling the Internet of Things (IoT) through explosive growth. Amid this acceleration, connectivity becomes essential. It’s anything but simple, though.

Mobile operators that think they can create IoT connectivity services by repackaging existing cellular services need to think again. It’s not just a matter of adding IoT SIM management
capabilities to an existing mobile core. Enterprise IoT customers need so much more in terms of flexibility and security.

It’s a giant step to go from offering consumer services, with a handful of subscriber-types and associated policies, to providing complex IoT connectivity services. In IoT, each customer has
their own unique requirements.

Some IoT customers need all or part of the traffic delivered in private connections such as APN and VPN. IoT device security is crucial, and customers also want to protect the traffic through
firewalls. Many customers want to manage their own connectivity and security policies per device or for device groups from a web interface. Others need local subscriptions in specific
countries, including in which permanent roaming is prohibited. And they want a unified experience across all these international networks. This means that operators are facing challenges to
maintain things such as policies and IP addresses across partner networks. 

The bottom line is that customers need programmable and secure global IoT connectivity. Mobile operators will realize that they cannot deliver this from a mobile core created for consumer
services. They need to chart a different course forward to deliver what their IoT customers actually truly need. Let’s take a closer look.

Figure 1: Business value in IoT connectivity
click to enlarge

Delivering what customers need

The matrix above shows two perspectives that we think operators need to consider when creating IoT connectivity services. On the Y-axis is the business value the service brings to the IoT
customer. On the X-axis is the customer’s ability to adapt the service to their specific needs.

If, as a mobile operator, you simply repackage an existing consumer service for IoT, you end up in the bottom-left corner.

Most operators then add SIM management and offer private connections on top of this. The key word here is most. The problem is that this approach delivers a commodity with very little
added value. You will only compete on price, and the lowest bidder will replace you. You are in what we call the red “churn zone” in the matrix. This is not a secure place to be.

The farther you move toward the upper-right corner with value-added services, the stickier your connectivity service offering will be for your customers. Additional revenues and higher margins
come with value-added services such as analytics, managed security, global connectivity and granular policies. You should also add a web interface for customer self-management, as it enables
greater operational