By Duncan Gardiner
October 2020, London
The GSM industry after many years of talking about M2M/IoT and pricing and executing such deals in low volume is with the increased number of use cases coming to the fore) now moving at pace to deploy IoT mobile solutions in the market. In many cases the industrial application of IoT, where factories are located in one country and products are shipped globally, it makes sense to service these devices/ products using roaming as an access method, particularly where the device may be coverage sensitive – think static meter in a basement that might only be covered by one MNO in that country. Roaming provides access to all possible coverage options.
IoT – the future growth engine for the Mobile industry
Why has IoT access supported through roaming been slow – wholesale pricing is one key reason. In many cases wholesale pricing performs two functions (1) provide revenue stream from roamers – people. (2) not be low enough that a roaming partner can compete domestically by reselling access to domestic consumers in the access providers network. When wholesale roaming rates start reaching levels low enough to do this, many MNO’s started putting “no permanent roaming” clauses into Discount agreements. A reasonable reaction when one considers networks cost hundreds of millions to many billions of Euro of CAPEX and OPEX to build-out and maintain. A general industry attitude set in of “no permanent roaming” without much flexibility as a result.
Thinking has significantly evolved on this. International roaming as an access technology is robust well understood and scalable. It makes sense to use technology underpinned with a standardised commercial approach to address this market properly. It is a different market to the consumer market. The use cases and IoT devices are very different from device to device. Some are sensors with very low data usage profiles. It makes little sense to host these on a network based on the standard approach to charging a data volume related fee, instead it makes better sense to charge an access fee (daily/monthly/ yearly fee) which can be combined with a data usage fee. This is better way to monetise the impact of the device on the visited network and receive a fee more appropriate to the revenue generated from the end user. Other device/use cases are extremely data volume intensive and standard wholesale pricing would be uneconomical if applied.
In both cases, the low volume and high-volume use cases, are best dealt with through wholesale pricing segmentation. Pricing each appropriately to better share the revenue opportunity for all in the value chain. This segmentation of the verticals approach allows for NB-IoT, M-IoT, LTE-M and the various other shades of IoT to be properly monetised.
But what about 5G?
From a technical perspective this is also coming more to the fore in our industry’s thought evolution with the arrival of 5G. 5G slices have different quality and service metrics as part of the slice configuration. Slices can be spun up and shut down at short notice. The Slices are easier to identify and commercialise than “old world” traffic behavioural analysis. They are effectively a technical segmentation of the network. Each sale and use of these slices will have a different impact on the MNO’s network capacity and therefore RoI investment in 5G. To monetise these properly a wholesale access pricing solution that is quick; scalable; manageable; transparent and robust is necessary. A one size fits all approach to wholesale roaming pricing is no longer fit for purpose in our evolving industry.
What does this mean for commercial wholesale teams responsible for negotiating and trading access? Simply – this means commercial wholesale roaming business units will need to increase the number of deals they do, and price according to use cases, to capture the revenue opportunity or if negotiating outbound deals, to get the right cost profile in place to support their IoT customers globally.
But doing more deals means commercial managers working longer hours or expanding the team size. In many cases demands for increased headcount will not be met with understanding in the C-Suite, who are under continual pressure to constrain head-count growth.
Which leaves digitisation – Tritex Solutions has developed digital Trading and Contracting solutions to address these opportunities efficiently and transparently. Allowing commercial teams to better understand where they are with each deal across their entire deal portfolio and progress these to execution at a far more rapid pace than is the case today. Tritex also integrates with back-office systems, shifting the digital boundary beyond the Operator into counterparties and third-party suppliers.
Do more deals more frequently with no additional resourcing constraints!