One of the defining characteristics of the market for cellular IoT extending back over the last 15 years, at least, has been consistently declining prices, both per MB of traffic and per connection. However, as connections and traffic become ever cheaper so the importance of related capabilities increases. As connectivity prices fall, the potential cost savings that can be made by negotiating with different potential Communications Service Providers (CSPs) reduce and so the opportunity for those CSPs to differentiate on value-added services and technical capabilities increases.
The advent of the SGP.32 standard to support remote management of eSIMs has the potential to stimulate further per-MB pricing falls and also sharpen the focus of buyers on value-added services and technical capabilities. With SGP.32 it is possible for end-users to migrate cellular connections between different CSPs in pursuit of better technical capabilities, better QoS or better pricing. Even if very few such wholesale migrations actually happen (as we suspect will be the case), the threat of such a migration will motivate cellular IoT CSPs to maintain competitive propositions, including in terms of price and technical capabilities.
Consistent with this, Transforma Insights has increasingly frequently had conversations with IoT CSPs who are seeking specifically to highlight technical supporting capabilities as a way to differentiate their services. This is not a sweeping change in market dynamics, rather a change in emphasis away from selling ‘low-cost connectivity’ and towards offering ‘leading edge technical capabilities and low total cost of ownership’. Companies seeking to differentiate services in this way include (but are not limited to) Aeris, Cisco, Cubic3, Emnify, Eseye, floLIVE, KORE, Semtech, Simetric, Soracom, Stacuity, Tata Communications MOVE, Thales and Wireless Logic.
This report explores some of the technical factors that can differentiate between IoT CSPs. In this context, Connectivity Management Platform (CMP) functionality, eSIM capabilities, dedicated core networks and security emerge as high priorities. Connectivity abstraction and CMP abstraction improve interoperability and simplify management across fragmented environments. Voice, local data traffic breakout and resilience provide important operational flexibility, particularly for automotive and multinational deployments. Software ownership and AI can differentiate providers commercially and operationally, while network monitoring, traffic control and routing capabilities increasingly support efficient, secure and regulatory-compliant IoT deployments.
