Crazy Consumer Electronics World: The internet of things and opportunities in the mobile market

The internet of things (IoT) and the advances its brought to machine-to-machine (M2M) communication continues to be a hot topic in tech circles.

Why's that? Well, not only does IoT represent a burgeoning market segment in itself, it is also promising to radically alter a host of existing sectors as technology in the field advances.

Among those is the mobile market, and to hear more about how IoT and M2M growth will impact the sector, we spoke to Three UK's Head of Business Development, Tom Gardner.

TechRadar Pro: Where do you see M2M and the internet of things going in the next five to 10 years?

Tom Gardner: Whether you call it M2M or the internet of things it will continue to grow at a substantial rate. Experience has taught us all to be wary of some of the hype, but a fundamental change that will accelerate growth is the falling cost of the hardware for connectivity and the appetite for data.

In the consumer world, a business case can be made for almost any device to be connected. Whether that business case be based on market differentiation to deliver a richer customer experience or simply for the manufacturer or retailer to learn more about the way the device is used to support R&D and or to reduce customer support costs as faults can be remotely diagnosed, pre-empted and in some cases remotely resolved.

Wearables and in-vehicle infotainment will experience vast growth thanks to the developments in the smartphones. Just as your router is the hub of your home, your smartphone can be the hub for all your connected devices on the move.

Tablet and laptop manufacturers will look to embedded connectivity to differentiate themselves and form a closer, ongoing relationship with the customer post sale.

In M2M, the big legacy markets such as smart metering and Vehicle telematics will continue to thrive on a volume of connections basis but the interesting markets are those emerging due to the greater accessibility of fast mobile data.

Digital Signage, CCTV and Wi-Fi backhaul/backup are just a handful of markets that have experienced a boom thanks to the near ubiquitous access of fast 3G and 4G data and will continue to do so.

M2M isn't about empty vending machines sending a text anymore, and for a business focussed on data like Three Wholesale that's great news.

TRP: In your opinion, what are the most interesting M2M & IoT opportunities that are yet to be explored?

TG: As device manufacturers, specifically those in the laptop and tablet market, strive to find new ways to compete whilst retaining and or increasing margins, embedded connectivity offers a very innovative solution with near endless possibilities.

Customers want a seamless experience, they just want to get online with as few steps in between as possible. The challenge for device manufacturers is the need to have one embedded SIM that can deliver high speed data in multiple countries but at a competitive local cost.

This enables the manufacturer to embed one SIM at point of manufacture, regardless of where that device may eventually end up around the globe. HP is leading a charge on this market opportunity but it won't be long before others launch their own propositions.

In M2M, remote broadcasting is an interesting market that we've seen emerging. During the Olympics, our 3G network was used to stream broadcasts back to TV centres. With mobile networks only becoming faster, they become a credible and cost effective alternative to satellite broadcasting.

TRP: What about the most interesting existing technologies that are in the market?

TG: The use of 3G and 4G in IoT and M2M is by far the most interesting technology. It can be used to deliver a seamless, superfast connectivity experience in almost any location. Other interesting technologies to keep an eye on are e-SIMs and multi IMSI solutions.

These technologies enable the credentials of a device, usually stored on a SIM card, to be remotely updated or changed to ensure that the device is always using the best mobile network for its technical and commercial needs.

TRP: What are the challenges that you face as an operator in terms of delivering wholesale partnerships?

TG: The market is filled with potential or existing MVNOs looking for a host MNO provider. The challenge is identifying the partners who are geared for long term success and aligned with your wholesale strategy in what is a competitive market.

To determine partnership potential, we like to understand the MVNO prospect's business plan, sustainable market differentiators, distribution approach, desired customer experience and ongoing strategy.

In terms of actual delivery, we have separated our delivery roadmap from Three's retail roadmap so the actual technical delivery of MVNOs is generally smooth.

TRP: What are the best practises for launching an MVNO?

TG: Find a partner with a capable network, an agile approach, a genuine interest in growth and the least chance of channel conflict.

TRP: What are the risks of launching an MVNO?

TG: The risk of launching an MVNO is usually after the initial launch excitement. The MVNO needs to be constantly assessing their performance trends, and have alternative plans ready to go - it's not a 'set and forget' market.

MVNOs can be very rewarding for all parties but making it a success needs long term commitment and investment. MVNOs need to be confident that their MNO partner will remain committed to the partnership, opening up services as technology evolves. A recent example of this is enabling 4G services to MVNOs.

TRP: What considerations must an operator make before making an agreement with an MVNO?

TG: What market is the MVNO targeting and how will they be successful in that market vs the established direct and in-direct competition? How will they distribute their service? What is their forecast? What technical enablers do they require from the MNO in order to deliver the end customer experience?

What other complementary services do they currently offer? Is their brand a good mobile fit? What is their mobile/MVNO experience? How are they funded? What is their long term plan post go live? How will the MVNO contribute to the MNO's goals? There's plenty to think of.

TRP: Is there a danger of the market becoming overcrowded by MVNOs?

TG: The UK market already has around 90 brands offering mobile services under the guise of an MVNO. There are some MVNO vertical markets which are over-crowded such as the low cost international calling market.

Markets such as business and mobile data are two markets that would benefit from new MVNOs who perhaps already have a presence in said market for another service. New innovation means new markets are always opening up – we are excited about partnering to tap into these new markets.

Like any other business you need a clear idea of who your customers are, what they need and the means by which you will reach them. If you have that the road is wide open.