If 2020 has taught us anything, other than the importance of regularly washing our hands, it is the indispensable value of internet connectivity. But while most of us have come to appreciate fast, reliable internet on a completely new level, enterprises that keep the wheels of a globalized world turning have been relying on an area of telecoms that is by no means prioritized by Mobile Network Operators (MNOs) - the IoT.
Part one of this article focused on a new breed of decentralized networking that puts connectivity in the hands of the consumer. Part two will argue that the same kind of transformative power can be given to enterprises, and that MNOs’ focus on consumers at the expense of IoT enterprises could well be their undoing.
Value over volume
As described in part one, the infrastructure of telecoms has catered to the needs of consumers long before GPS technology and machine-to-machine communications were conceived. These days, however, the trillions of tiny data packets that comprise IoT communications have become an essential utility for the globalized world, opening up international operations that would be impossible without real-time, large-scale connectivity. “MNOs have the resources needed to meet the connectivity requirements of the business sector, particularly large enterprises,” says Bob Emmerson, Technology Editor for Beecham Research. "However," he continues, “they are less well-equipped with the support resources needed for small and medium-sized companies, and continue to focus on consumers [because of the high value of consumer traffic] and voice services.”
While the capacity is there for MNOs to cater to enterprises using IoT, the data requirements for the majority of IoT devices is much, much lower than the average smartphone, and so the revenue for each unit is significantly lower - but the volume of IoT devices is much, much greater with estimates ranging between seven billion and twenty two billion devices. Telcos’ focus on consumers has led to lower capacity bands such as 2G and 3G being shut down (or ‘sunset’) in some regions to make way for faster 4G and 5G bands - which can leave a multinational organisation having to replace millions of devices that cannot function on a higher frequency band.
Roaming around the world
Many IoT applications roam across multiple countries and networks (as in telematics, for example, itself a multi-billion dollar industry) and so “MNOs need to work with roaming partners [in areas] where they may not have visibility or the requisite network performance,” says Emmerson. Because of the relative stability of the licensed cellular bands and the need to roam unimpeded between networks, “embedded SIMs, or eSIMs [based on the eUICC standard], which enable international and global connectivity are set to play a pivotal role,” Emmerson continues, because of their ability to connect to multiple networks on one SIM card. Enterprises that operate globally and outside the bounds of a single carrier may therefore have to pay a premium to connect to multiple different MNOs around the world (and negotiate with each operator for IoT-appropriate packages) without a guarantee that operators will keep that particular low-bandwidth spectrum open, or opt for newer IoT-specific technology such as LPWANs (low power, wide area networks) without the assurance that these technologies will stand the test of time or be suitable for their needs (roaming is near-impossible on an LPWAN, for example).
The virtual middle men
This is where virtual MNOs (or MVNOs) come in. MVNOs lease spectrum from hundreds of different networks around the world and offer businesses a connectivity package that could cover the whole world, rather than offering one network that might restrict a businesses operations to one particular region. “MVNOs provide the services needed for many IoT deployments, and they focus on the business sector where the numbers are lower but the margins much higher.” says Emmerson. “In addition,” he continues, “they have recognised that connectivity has become a mission-critical resource on which innovative use cases and new business models [such as subscription service models] will succeed or fail.” Looking past the sheer volume of consumer traffic that MNOs cater to, MVNOs have instead looked to provide more flexible connectivity services - often adopting new technologies like LPWANs and making agreements with a multitude of smaller operators and the largest carriers so that they can give the largest possible range of options to a global enterprise. This was about as close as enterprises could get to managing their own network until recently, and still might have required some compromise on their connectivity - Emmerson points out that “in many countries, MVNO availability is patchy or non-existent” - but the latest developments in telecoms are putting even more network control into the hands of those who need it.
With new capabilities of private cellular networking such as more network control, plus additional technologies such as eSIM and advanced security solutions, enterprises have access to the full stack of network technologies. This technology stack has given rise to a new breed of enterprise network operator (ENO) (such as Pod Group, the company for whom I am chairman), which gives an enterprise further network control by providing managed services for them to run their own networks. Private LTE networks function within the 4G LTE band, taking advantage of increased access to the network core (the fundamental basis of a network) enabled by the MVNO model, and utilising unlicensed spectrum that has been auctioned off in some areas for enterprise use (the CBRS spectrum in the US for example).
Without diving into too much detail on the finer points of how networks are structured and arranged (you can find an explanation of private LTE networks compared to 5G here), Emmerson explains the key functions of private cellular networks in terms that the informed layperson can understand:
“Private Cellular Networks (PCNs) replicate the functionality of public 4G/5G networks, but are owned and managed by the user, which enables precise control of networking functionality. Moreover they perform as if they were an extension of corporate LANs [local area networks]: data is intrinsically secure because it stays on site, and doesn’t need to be transmitted to the MNO [via a public network channel]. PCNs are ideal for edge computing and network slicing [portioning up network spectrum for different uses], a combination that allows companies to run and manage applications locally for optimized performance and minimal latency.”
The network control afforded by private networks, far greater than traditional MNO or MVNO models allow, means that enterprises can manage their own network, and escape the confines of public cellular infrastructure that may not suit the full range of their requirements. Using embedded SIMs (as mentioned previously) in combination with a private network, enterprises operating their own network can also chop and change the public networks they connect to based on coverage or price, and even use unlicensed spectrum that has been made available to them without having to make separate agreements.
The future is flexible
The telecoms landscape is getting increasingly nuanced and complicated, but for enterprises looking outside traditional operator models for the optimal networking offering for their needs, it is certainly worth the effort to understand exactly what their options are. As Emmerson notes, IoT connections are growing “faster than the mobile handset business… at a rate of around 20% per annum for the next 5 years,” and so IoT is becoming increasingly important to the telecoms business. As the IoT rises to prominence, MNOs and the more inflexible MVNOs may miss out on this surge of IoT connectivity as enterprises take their network control in-house.
Looking back to part one of this article, there could well be a situation in the near future where a Helium-style decentralized network serves the consumer base, and the IoT telecoms space comes under the control of the enterprises themselves. And so, considering the entire range of the telecoms landscape, the question facing network operators should be: Can we afford to overlook self-managed, decentralized networking?