For years we’ve been predicting that pressure on costs would drive a requirement for greater scale in the provision of cellular-based IoT connectivity. But if anything the pace of consolidation has slowed. Why?
As part of our recent IoT MVNO market landscape 2026 report we assessed the number of IoT MVNOs involved in strategic consolidation and found that between December 2023 and June 2026 just nine were acquired by other MVNOs. That compares to 16 in the two years prior to the publication of the previous report. Note: we’re not including acquisitions by VC/PE or other types of companies here, that wouldn’t be consolidation, but more on that below).
As usual, Wireless Logic led the charge with three acquisitions over the most recent period (Arqia, Comms365 and Zipit Wireless). Others included 1oT (Cheer IoT), M2M Data Connect (M2M France), Melita.io (Crout/Conekkt and Digital SIM), and OptConnect (Comgate, M2MDataGlobal) involved. It’s possible we’ve missed a few, but the prevailing trend in consolidation is downwards. Wireless Logic is trying its hardest but most of the rest of the market isn’t following suit.
At the same time we note a bunch of new additions to the market. The previous report featured 188 companies, whereas the 2026 version has 234. Quite a lot of that growth was due to identifying additional players (particularly some basic resellers) that we might have missed last time around, so we wouldn’t say there’s been a dramatic expansion in the number of MVNOs, but here have been quite a number of new launches. Certainly comparable with the amount of acquisitions. Which means basically net zero consolidation.
Why?
The simple answer is, of course, either a lack of capacity or a lack of appetite, although those two factors are closely linked. Is consolidation unappealing? Clearly not. The cellular-based IoT connectivity business is characterised by recurring revenue from an established customer base. So, with a few exceptions, all such players have some intrinsic appeal as acquisition targets, given that they bring with them a stream of revenue often over many years.
And, specifically for inter-MVNO acquisitions, there are other strong drivers. For one IoT MVNO, acquiring another broadly makes sense just from the stand-point of expanding scale. That leads to lower average cost to serve and can lead to improved negotiation capacity with MNOs. Plus, in some cases, the ability to expand into different (usually geographical) markets. And, in a few cases, it brings additional functionality, for instance in platforms, core networks, or eSIM management. It might also – although in such a fragmented market this isn’t such a strong argument – provide an additional benefit in terms of reducing competition.
So there’s little doubt that IoT MVNOs broadly – other than perhaps simple resellers – have an intrinsic value. So the problem must be with the price tag. I think it’s reasonable to assume that most IoT MVNOs would pursue quite aggressive acquisition strategies if the price was right.
The conclusion must be, therefore, that price-tags are too high for IoT MVNOs – who don’t have particularly deep pockets – to successfully bid for their peers. This points to a combination of high (perhaps over-inflated) expectations on pricing by potential sellers, or that IoT MVNOs are being out-muscled for the acquisition opportunities that do exist. Or a combination of the two, since VC/PE investment in IoT companies is likely to be responsible for pushing up the expectations of multiples on revenue/EBITDA across the board.
Quite a few IoT MVNOs have been picked up by private equity, venture capital or other external investors in the last few years, including 1Global, KORE, Pelion, Sensorise, Velos, and Wireless Logic.
The case of KORE is an interesting one. At the point at which it was acquired by Searchlight and Abry earlier this year it claimed the deal valued KORE at USD726 million. The headline figure is important because it represented a valuation of 2.5x revenue and 11.5x EBITDA, for a company whose shares had been trading well below that. Similarly the announcement that based on investment from General Atlantic, Wireless Logic was valued at GBP3.5 billion, which is somewhere just shy of 10x revenue. Other juicy headline multiples included Cubic3 at 16x revenue and 152x EBITDA, as discussed in a blog post: Thoughts on SoftBank's acquisition of Cubic Telecom. In another recent announcement, Telenor Connexion announced an investment from Verdane. (NB: It’s debatable if Telenor Connexion is an ‘MVNO’, in its purest sense, since its parent runs mobile networks, but the vast majority of its connections are out of footprint and it has always been rather arms-length from the parent). That put the valuation based on the transaction at SEK7.5 billion (USD770 million), a 6-7x multiple on revenue and around 20x EBITDA.
Irrespective of how well those valuation figures should stand up to scrutiny (and I’m not a financial analyst), that kind of thing sets expectations for any seller of an IoT MVNO.
Perhaps it’s just a case that many IoT MVNOs consider inorganic growth (i.e. through acquisition) as painful relative to organic growth. There’s integration challenges and one might argue that the money is better spent beefing up the proposition or hiring more salespeople. Particularly if the relative cost of acquisitions is artificially high as noted in the previous section.
And perhaps there’s a view that with continuing growth in the market, consolidation isn’t quite as necessary. According to Transforma Insights’ IoT Forecast Database, the next 10 years will see a CAGR of 6% in Europe and North America for ‘Value Added Connectivity’ (i.e. our measure of revenue that accrues to MNOs and MVNOs for the provision of cellular-based IoT connectivity). The figure is pretty consistent throughout the forecast period. Is that enough growth to mitigate the need for consolidation. Perhaps. But, we should note the figure shown consists of a lot of connections that have already been deployed, so aren’t ‘up for grabs’ in each year. Net additions of connections grow at a much healthier 9% and 11% in Europe and North America respectively. Although that also comes with continued erosion of revenue per connection.
And perhaps the drivers aren’t as strong as we might think, relative to other sectors. The IoT MVNO market is characterised by high variable costs (i.e. buying data from MNOs) and low fixed costs. The former does not change much, although a little as noted above, as a result of scale. The latter, which is often the driver of market consolidation, is just not that big a driver for IoT MVNOs.
Another driver of consolidation in other sectors is the opportunity from cross-selling, but again this isn’t the case here, since the portfolios will be largely similar.
Maybe there’s also uncertainty in the IoT MVNO community about what the future brings, which leads to a certain amount of hesitation about M&A. Without doubt this is a time of great change. The arrival of SGP.32 remote SIM provisioning in particular presents a shift in how connectivity is deployed (see SGP.32 looms large over the cellular IoT landscape for more discussion on the point). We tend to think of it as an opportunity for MVNOs rather than a threat but it has only just arrived and there’s a certain amount of wait-and-see going on with regard to how it will be implemented. There’s a few other trends such as the increasing need for distributed global infrastructure (see What does greater ‘localisation’ mean for IoT delivery?), the complexity of supporting 5G functionality, ebbing and flowing of MNO attitudes to MVNOs, and various other things.
On balance we don’t think this is that much of a factor really. IoT MVNOs have proved to be a dynamic and resilient part of the supply ecosystem and we’d expect that to continue, albeit perhaps with some changes.
All of the above pre-supposes that the natural form of ‘consolidation’ is with other IoT MVNO peers. Perhaps that’s too narrow a view of both IoT connectivity and IoT more broadly. There have been quite a number of examples of acquisitions by players in other parts of the value chain. This represents another example of others having deeper pockets, and identifying that there’s greater value in expanding along the value chain than IoT MVNOs might get from simply consolidating a bigger customer base.
Most closely adjacent would be the telecoms industry, most prominently mobile network operators. There are some prominent examples: KDDI of Soracom and IIJ, SoftBank of Cubic3, and NTT of Transatel and IoT Connect Mobile. We might also include in here 1NCE having major telco shareholders in the form of Deutsche Telekom and SoftBank This hasn’t exactly been an overwhelming tide though, running at about one such deal per year.
Hardware is another obvious place to look. The most prominent example was Semtech’s acquisition of Sierra Wireless (mostly hardware but with an MVNO business), although that can hardly be considered an overwhelming success, and rumours are that it’s trying to offload the IoT MVNO business. Other notables were G+D’s acquisition of Pod Group (several years ago now) and more recently Digi’s acquisition of Particle. Again, not exactly a wave of acquisition.
As noted above, it’s hard to argue that there are big benefits to consolidation, with additional scale, reach and functionality bringing benefits. But it seems like the inflated price tags of many IoT MVNOs and a conspicuous lack of deep pockets is inhibiting that market consolidation. If the price is so high as to render the benefits marginal, it’s hardly surprising that many will focus instead on organic growth.
The state of the IoT connectivity market is one of the key coverage areas for Transforma Insights. We have published numerous reports on it. Some of that is discussed in blog posts such as the following: The shifting sands of the IoT MVNO market landscape, How can MNOs and MVNOs differentiate their IoT propositions?, 24 key themes in cellular-based IoT connectivity in 2025, and Rating IoT connectivity providers: ‘horizontal’ and ‘vertical’, all of which link to relevant reports published as part of our Advisory Service.
