Vodafone tops Transforma IoT connectivity chart

  • March 2, 2023
  • Steve Rogerson

Vodafone is the leading IoT connectivity provider, according to Transforma Insights’ annual benchmarking report.

The report is based on detailed analysis of the strategies and capabilities of 23 global providers of cellular-based IoT connectivity. It assesses the key trends in the sector and identifies best practice and innovation from those vendors.

It is a time of great disruption in the provision of IoT connectivity, particularly where it comprises connecting devices in multiple countries. Based on discussions with communications service providers (CSPs), Transforma Insights has identified key trends.

Some of these market dynamics include easier market entry. The shift of connectivity into the software domain continues, allowing for more market entrants and greater innovation in the provision of IoT connectivity services.

The provision of multi-country connectivity is in a period of transition between the old world of sponsored roaming and physically switching SIMs, and a new one based on eSIM and other more refined options for localisation. The current situation is something of a scrum but it will improve, says the report.

NB-IoT and LTE-M will emerge as market leading technologies. For some players and in some geographies, this is already the case. But there are still issues with coverage, optimisation and roaming.

Scalability is increasingly the watchword for IoT connectivity. This is not particularly new and was the focus of the previous report. Harnessing the cloud and virtualising platforms and network elements are critical to that process.

Contextualisation is the order of the day. IoT connectivity providers need to understand the needs of the customer and adapt accordingly, providing a service wrap to the connectivity offering, with some elements of customisation and tailoring. Additionally, they need to adapt to treating customers as long-term partners rather than short-term transactions.

CSPs should seek further revenue opportunities through value added services such as security, compliance and analytics. They must be very wary of moving up the stack and providing end-to-end offerings; there are opportunities but being a me-too provider is destined to fail, says the report.

Being involved in devices is also increasingly a necessity for connectivity providers. There is an increasing overlap between the two markets through factors such as eSIM and the need to cross-optimise elements when using constrained technologies. This also includes device lifecycles.

“As part of our research we keep a constant watch on what is happening in the IoT connectivity space, but it’s good once a year to do a deep dive into the strategies and capabilities of all of the players,” said report author Matt Hatton. “And that deep dive confirmed our view: we are in a period of definite transition triggered by technological change and by evolving commercial models. In the next few years, we expect more innovation, new leaders to emerge, more consolidation and the emergence of a new scalable norm for supporting connectivity based on control, transparency, localisation, compliance and being cloud-native.”

Collectively over the past two to three years the mobile network operator (MNO) portion of the IoT connectivity landscape has been seized with existential angst over its approach to the IoT connectivity space, says the report. Many MNOs have overhauled their structure and approach to the market recently and this is ongoing, with AT&T’s recent restructure, Aeris completely changing tack by taking over Ericsson’s IoT business, and Vodafone looking at options for some form of spin out.

“This should not be seen in a negative light,” said Hatton. “It’s part of a wider introspection within the IoT space, with organisations as diverse as Bosch, Google, IBM and SAP rethinking their approaches to the market to reflect the world as it is, rather than how they anticipated it would be.”

This contrasts with the increasing confidence of IoT MVNOs. Last year’s report profiled just two MVNOs: Aeris Communications and KORE. This year’s includes nine: 1NCE, BICS, Emnify, Eseye, KORE, Sierra Wireless, Soracom, Telit and Wireless Logic. It is impossible to ignore the growing importance of these organisations, not least because they are often the most innovative players. The focus of this report is on innovation and best practice, both of which are better addressed by expanding to cover the leading MVNOs.

Hatton added: “The MVNOs are where much of the innovation is happening, and it’s notable that many MNOs are seeking to harness MVNO energy for their own operations.”

As to who is the best IoT connectivity provider, Hatton said: “This is, at its heart, the most reductive of questions. The answer will always be ‘it depends’. It depends on innumerable factors, including the capabilities that you need, the location of your devices, your preferred commercial models or even which cloud provider you use. We have elected to focus on innovation and best practice: which of these IoT connectivity providers has the most scalable, compliant, transparent and/or future-proof approaches to addressing the various elements of IoT connectivity and adjacent IoT services. That way we can, in some way, provide a useful comparison of capabilities.”

The assessment has two dimensions. The first relates to pure IoT connectivity, including factors such as how multi-country connectivity is addressed, scalability, mechanisms for global traffic management and features. The second looks at those factors that are immediately adjacent as other service domains in IoT, including devices, cloud and edge, security, compliance, and contextualisation.

The highest overall rated vendor in the analysis across both IoT connectivity and IoT services is Vodafone. Other major MNOs also score well, including Deutsche Telekom, NTT, Telefónica, Verizon and Orange. Their success tends to be skewed towards the IoT services, whereas the increasingly assertive IoT MVNOs are more strongly positioned for pure IoT connectivity.

The report highlights 1NCE, Emnify, Eseye and Wireless Logic as having pulled together compelling connectivity offerings which are gaining traction, plus KORE, which has done strong work enhancing its wider IoT services offering, including particularly related to devices. The main exception is Telenor, which has always been more oriented towards connectivity because of its focus on addressing multi-country deals through Telenor Connexion.

The report is based on analysis of the strategies of the leading 23 global providers of cellular connectivity for the IoT. The selection was based on three criteria: scale, ability to deliver global services, and innovation in the service offering.

The CSPs profiled are 1NCE, AT&T, BICS, Deutsche Telekom IoT, Emnify, Eseye, KORE, KPN, NTT, Ooredoo, Orange, Sierra Wireless, Singtel, Soracom, T-Mobile US, Tele2, Telefónica, Telenor, Telia, Telit, Verizon, Vodafone and Wireless Logic.