IoT appliances

There’s only one project in the telecoms arena these days and it seems like everyone on the planet is aware of its potential and how it might evolve.

We have all seen the big numbers associated with the Internet of things. According to a recent European Commission study the market value of the IoT in the EU is expected to exceed one trillion euros in 2020.

However, as many industry players in this space know well, pricing for IoT traffic is one of the most distinctive and dynamic elements in the delivery of the solution. A situation even more amplified by that traffic being International and subject to roaming scenarios.

Let’s consider that SIM cards are contained in devices from the day they are manufactured be it man-made or more typically factory made, depending on the application. The manufacturer of these ‘connected’ objects will most likely sell them internationally and cannot forecast in which country a specific item might be vended and in which it will be used. While the potential options for the solution may be predicted, the pricing is rarely assured. With Internet of Things we are not talking about a different mechanism for these SIMs to roam in than humans do, so the traditional mechanisms for Roaming are also applicable here.

IoT saying things about you

As the EC recently said in its study: “Value Proposition and Pricing: while in a product economy, price setting is quite simple [TCO + Mark-up], in a service economy it is quite difficult to set the right price, [and] able to guarantee [its] sustainability. What is the right monthly rate of an IoT-based maintenance service of my aircraft engines?”

So, when we consider that IoT as a solution is fundamentally enabled by mobile connectivity we can see that MNOs are at the centre of a multifaceted set of challenges and prospects in how to be able to deliver these services and you can see how fundamental it is to pin down the cost of Roaming Things.

In the Roaming space for the last 7 years MNOs have been defining, understanding and have been occupied with writing Internet of Things objects into their Roaming agreements. ‘Permanent Roaming’ and the different traffic models we see with Roaming things might be two reasons why IoT communications might be subject to specific roaming agreements, distinct from those covering traditional person-to-person communications.

For example, the traffic many of these devices make, with a lot of signalling and less data or SMS, are different from those of traditional communications generated by humans where normally the use of data and the revenues generated from that typically outweigh the cost of signalling costs.

While many MNOs do not apply specific prices or conditions for IoT traffic, many have specific agreements for their IoT traffic which means that the Roaming partners network that the IoT device arrives to might be subject to different pricing depending on what services it uses at what time of the day and in what quantity, with an aim to protect the inbound MNO from any network impacts.

For Permanent Roaming the situation is even more unclear; some MNOs have agreements that aim to diminish the risk of having many foreign IoT devices in their network on a permanent basis. These agreements provide limitations which once met may risk the service being blocked, with limited service, a sub level of service or charged differently. Sounds familiar? We are back to the kind transparency measures that we see in Roaming regulations.

Clearly, some operators are very concerned about covering the production costs of traffic generated by some IoT communications because of the small amount of data they generate. Several MNOs call for transparency regarding the type of traffic generated by visiting SIM cards with their Roaming Partners and so specific IoT Roaming contracts may be needed. Some MNOs intend to more and more closely monitor SIM cards that visit their network for longer periods. Such monitoring is foreseen to become a necessity in the EU with the new Roaming Regulations or RLAH (Roam Like at Home) starting next June 2017.

Some see a risk that foreign SIM cards will be located permanently on their networks creating problems of capacity management and network congestion

As the EC Study informs us “National networks are dimensioned and built to host domestic SIM cards and if RLAH is introduced without proper safeguards, some see a risk that foreign SIM cards will be located on a permanent basis on their networks – creating problems of capacity management and possible network congestion.

What makes things more complex is that some IoT SIMs have been available in the market for as much as 20 years. Before there was IoT, there was simply the request for an Enterprise to purchase let say 1000’s of SIMs, which historically wouldn’t be treated differently from human SIMs. MNOs would not treat the application of those SIMs differently. So, in short IoT SIMs are already in Roaming traffic today and may only be distinguishable if an MNO is smart enough to be able to detect the traffic patterns. But understanding the traffic patterns of a car, fridge or heart monitor is already hard to do and to differentiate that in an environment where human roamers may be also “Silent Roamers” (switching off data roaming) is even more complex.

The Digital Single Market (DSM) Strategy, adopted in May 2015, includes elements that advance Europe a step further in accelerating developments on Internet of Things. In particular, the strategy highlights the need to avoid fragmentation and to nurture interoperability for IoT so that it can reach its potential. “A potential obstacle for the achievement of a single market for the IoT has to do with issues linked to the capacity to handle a large diversity and very large volumes of connected devices, and the need to securely identify them and be able to discover them so that they can be plugged into IoT systems”.

In this context, it is important to understand that there is no way to understand exactly what costs will be incurred by Roaming Things. More work is underway to understand it and to imagine by 2020 what costs might be incurred. Since it is from one perspective amazing to imagine connected devices, in contrast it will be important to sustain the solutions and make every player in the IoT ecosystem responsive and invested in the solution for it to be truly effective.

UROS as a leading innovator in International Roaming helps MNOs by enabling Roaming and Domestic SIMs, monitoring, maintaining and monetizing them for the IoT. With active inventory management, the UROS platform allows for deep transparency on all SIMs as they are provisioned. UROS equips MNOs with a unique platform for handling IoT and ‘ready-for-IoT’ processes which allow for an Enterprise or MNO to take advantage of the challenges of IoT while being aware of the impacts.