At Transforma Insights were are currently working out our Communications Service Provider IoT Peer Benchmarking report, due for release in September. As part of the research we dig in to the connections and revenue of the various operators. It's not a critical component of our ranking of them, but it's certainly interesting. And it's particularly interesting reading in the unusual times in which we currently find ourselves. Frankly we couldn't wait to see some Q2 2020 financial results to get an idea of how COVID-19 might have had an impact.
Three operators had Q2 2020 data available at time of publication: AT&T, Orange and Telefonica. The chart below shows the quarterly connections increase (or decrease) of each of them.
Telefonica has seen the most pronounced immediate impact. At the end of June 2020 it had 24.3 million IoT connections, up 14% year-on-year, but down 1.7% over the quarter. This decline was entirely driven by Brazil. Germany recorded a healthy 6% growth in the quarter, while Spain and the UK growth rates were 0.8% and 0.3% respectively. Until Q2 Telefonica had grown at a fairly healthy 22% in 2019, with an installed base growing by 4.3 million, compared to 3.3 million in 2018. The UK, in particular, had seen strong growth, largely supporting the national smart meter roll out. During 2019, it increased connections by over 1.5 million, representing a 43% growth. In Q1 2020 alone it added a further 437,000 connections before roll out was halted.
For AT&T, growth in total connections slowed somewhat. Quarterly growth was 2.3 million in Q2, down from 3.5 million in Q1 and 3.7 million in Q4 2019. Compared to 1H 2019, 1H 2020 connection growth was down 18%. Given the market disruption, and AT&T’s exposure to the automotive sector, Transforma Insights sees this as a relatively strong performance. However, we expect that there will be a delayed impact on sales in the second half as new car manufacturing drops to reflect diminished sales.
For Orange, growth in the first quarter of 2020 was 533,000, up 24% compared to Q4 2019, but that fell to 232,000 in the second quarter.
We anticipated this trend. While demand for IoT will have dramatically increased courtesy of COVID-19, the supply side will always be challenged, both in terms of supply chains for delivering hardware and also for the practicalities of deployment.
If you want to know more about Communications Service Provider strategies for IoT, you should check out the Peer Benchmarking report. More details below. If you want to learn more about the report, sign up to our newsletter mailing list on our news page and you will receive details on the report as soon as it is released.
The report, which is scheduled for publication in September provides in-depth assessment of the role of CSPs in IoT, and detailed profiles of Aeris Communications , AT&T , Deutsche Telekom , Kore Wireless, Orange, Telefonica, Telenor , Telia, Verizon and Vodafone.
For each of the profiles we look at six categories: