The IoT and the new type of MVNO

Written by on February 8, 2016 in Guest Blog with 0 Comments

IoT IMWe’ve heard a lot about the potential of IoT and how it will fill the telecoms industry’s coffers with much-needed new revenue. But, like many promising ideas, it is taking far longer for IoT revenues to get off the ground than the hype would suggest.

Part of the reason for the slow rise in revenues lies in the practicalities of implementing IoT for large enterprises – the very organisations that will generate significant sums for telcos. A key message seems to be that by trying to keep tight control of the market, the telcos are smothering the very potential they so desperately need to nurture.

The Dutch government began to recognise that lack of competition was slowing innovation and adoption in the IoT market. It discovered that at the heart of the problem was one of the great telecoms assets – the SIM. The reason for this is that the cost of a SIM swap is so high, and difficult, for large IoT deployments that it effectively creates operator lock-in.  

To address this issue the Dutch government mandated a new model which enabled any enterprise to own its own sub-number range, allowing them to gain control of the SIM and avoid the requirement for SIM swap if they wanted to change network. The enterprises that adopt this model become PVNOs (private virtual network operators).

Making the model work requires the creation of an intermediary platform – a PVNE (private virtual network enabler) – which was built by systems integrator CGI. To the networks the PVNE looks like a full MVNO. The PVNE has a unique number range and each PVNO has a sub-code which enables the PVNE to route the traffic correctly. This requires sophisticated routing capabilities, which are being provided by Dutch vendor BroadForward.

While it is still early days to assess the viability of this model the touted benefits of it are that the Connected Enterprise is free to change networks, choose the most appropriate network for their application and even ‘best-route’ their traffic. This should boost innovation because it enables them to launch new services far more easily.

The first enterprise – a large Dutch energy company – has already rolled out as a PVNO and will be presenting its experiences at Mobile World Congress. Other countries are now said to be looking at the model with interest.

For more details and further analysis see Telesperience: Dutch Create New Telco Business Model to Boost IoT. This article was written by Morgan ap Darran, the research analyst for this report.

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Tracy Monday

About the Author

About the Author: Tracy is an Analyst with UK-based analyst firm Telesperience. She has 20 years’ experience working with communications service providers, infrastructure providers and systems integrators. ( See www.telesperience.com for more details.) .

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