Profitable IoT MVNO. Possible?
Mobile virtual operators can reach a positive ROI in the IoT business through low CapEx and OpEx investments in self-managing systems. Our IoT network infrastructure solution is fully implemented in software using commodity hardware, to maintain low CapEx investments, and it automates most of its functions leading to low OpEx spending.
Strategy for generating revenue in the IoT industry
The good news is that the IoT market’s potential looks very promising when observing the revenue figures that circulate among business predictions. Bain & Company anticipates an annual revenue opportunity of $470 billion in 2020. Although this is a very appealing estimation, we would like to address the elephant in the room: more than 70% of the companies that are doing business in the IoT industry have not generated positive ROI yet.
IoT market needs
Mobility is one of the key-features for IoT MVNO businesses to generate a growing revenue. Here are some examples of IoT applications, which include location tracking or real-time data collected from a moving device:
Corporations
IoT connectivity provides fleet management solutions for real-time location tracking, fuel consumption monitoring and route management, to lower costs and increase productivity and safety.
Farms manage IoT sensors and devices that gather soil and weather data from the field, allow herd location tracking and remote herd health monitoring. Medical and health care products can get connected globally using IoT platforms. IoT mobility in the health care industry consists of handling secure authentication and authorization of data anywhere in the hospital, collecting data including location tracking information from different devices in real-time and use the consolidated data for diagnosis, treatment and intervention in time for the patients.
Local administration
Smart city solutions, currently some of the main tasks of local administrations, are starting to be implemented by developed societies that make the quality of life one of their top priorities. Smart cities of the world are developing Internet connected traffic lights, synchronized and adapted to traffic load, self-cleaning systems, connected trash cans that alert cars to pick up the trash when almost fully loaded, and the list goes on.
Different public institutions collaborate to automatize cities’ functionality, but they need the infrastructure to collect, connect and manage data that is at the foundation of an autonomous administration.
In this case, mobility can mean interconnecting data from the whole city, buildings, roads, transportation, traffic surveillance etc., to consolidate a solid traffic management based system and connecting it with another city’s systems.
MVNOs as IoT mobile operators
Industrial IoT (IIoT) is the field of Internet of Things that deals with billions of devices that interact and communicate with other machines to generate data, increase productivity and revenue of enterprises. MVNOs are flexible enough to approach and rapidly win the IoT Industrial field:
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The usual customers of an MVNO are vertical markets, which means that MVNOs are more flexible and can reach a particular group of customers easier than MNOs.
MVNOs use their own infrastructure equipment for IoT:
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MVNOs use GGSNs/PGWs, SMSCs and HSS/HLRs to connect devices to the Internet and to allow IoT services;
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The SIM cards are inserted into devices that get authorization and authentication from the HSS/HLR, Internet connectivity through the GGSN/PGW and text messages, if needed, through the SMSC;
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For mobility, MVNOs have agreements with MNOs and roaming hubs that facilitate access inside and beyond borders.
Device manufacturer partnerships are key:
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These partner companies are those that manufacture products such as cars, medical equipment, sensors, parking meters, adaptive lighting systems, temperature sensors;
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A partnership between all device manufacturers, MVNOs, IoT platform developers, pushes the market forward and benefits the society through progress and innovation.
Smart and safe strategy for generating revenue in the IoT industry as an MVNO
Smart and safe strategy means taking care of the OpEx and CapEx from the very start.
This involves the following:
Costs:
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Keeping both CapEx investments and OpEx spending low;
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Network equipment that is based on commodity hardware and generic software are far less expensive and more easy to manage and operate.
Safely manage an IoT network comprising millions of devices:
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Getting highly scalable network components;
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Verifying the level of network redundancy;
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Investing in a self-load-balanced network (small and large).
IoT solutions for Mobile Operators
Price transparency
SS7ware is the only company in the field that publishes prices transparently, allowing mobile operators to speed up the buying process and to bring their business predictions closer to reality. MVNOs need two of the SS7ware products for their IoT network infrastructure: YateHSS/HLR and YateUCNTM (with GGSN and PGW functions), both highly scalable and load-balanced within clusters.
The YateHSS/HLR can support 100k subscribers and it scales linearly so that MVNOs can estimate their CapEx and OpEx spending accurately for their business life cycle.
The YateHSS/HLR solution can sustain multiple types of IoT devices.
As a key advantage, most of its features are automatized: synchronizing a new node in the cluster, redundancy function and load-balancing feature inside the cluster.
If you want to know more about the cluster architecture, we compiled a wiki page with documented insights into how it works.
YateHSS/HLR uses SS7 and Diameter protocols to connect with YateUCN for Internet access and mobility.
YateUCN works as both GGSN and PGW and is implemented in software, using commodity hardware. The YateUCN core network solution can be organized as a self-operating cluster, providing mobility, QoS, IP address allocation and more.
YateHSS/HLR and YateUCN core network components. IoT solution for MVNO
SS7ware transparently shares its prices and gives customers license for each YateHSS/HLR and YateUCN product, it does not charge per subscriber or added feature.
Positive Return on Investment for IoT mobile operators
A positive Return on Investment for IoT mobile operators is directly connected with providing a high number of IoT mobile devices while having a low OpEx spending.
The major advantage of YateUCN and YateHSS/HLR products is that they work within self-operating clusters to deliver Industrial IoT connectivity, keeping network management and scalability investments low.
With a revenue per device of one or two dollars monthly, a mobile virtual IoT network comprising millions of devices can turn into a highly profitable business.