With IoT connections now composed of various different technologies from non-terrestrial networks to low power wide area networks, cellular connectivity offers a sweetspot for devices that move between different countries or that are designed as part of global deployments. For communications service providers (CSPs), supporting IoT roaming can be an appealing generator of revenue but assuring connectivity is available in multiple countries is complex and involves navigating a complex web of commercial and regulatory conditions.
The growth of IoT is resulting in increased connectivity revenue. IoT market research firm Berg Insight has reported that global IoT connectivity revenues increased 16% to reach US$13.82 billion in 2023. As IoT has matured, the f irm says there is greater focus on reliability, security and support for international deployments, contributing to new types of market dynamics for cellular IoT connectivity providers. By 2028, the firm projects that there will be six billion IoT devices connected to cellular networks worldwide, generating annual connectivity revenues of US$23.41bn.
The top ten mobile operators reported a combined active base of 2.9 billion cellular IoT connections at the end of 2023, accounting for 88% of the total 3.3 billion connections. China Mobile is the world’s largest provider of cellular IoT connectivity services with 1.32 billion cellular IoT connections. China Telecom and China Unicom ranked second and third with 527 million and 494 million connections respectively. Vodafone ranked first among the Western operators and fourth overall with 184 million connections, followed by AT&T with 128 million in fifth place. Deutsche Telekom and Verizon had in the range of 50–57 million cellular IoT connections each. Telefónica, KDDI and Orange were the last players in the top ten with about 41 million, 40 million and 37 million connections respectively. The growth in the installed bases of the largest mobile operators varied, reports Berg Insight, with changes ranging from a 1% decrease to a 31% increase year-on-year. International connectivity constitutes one of the largest and fastest growing segments of the cellular IoT market. Mobile operators with regional and multi-regional operations are naturally well-positioned to offer IoT connectivity services for international deployments at competitive rates, utilising their network footprints and ability to negotiate favourable roaming agreements.
The priorities of many mobile operators and their IoT businesses are becoming increasingly misaligned as the telecoms industry focuses on consolidation of operations to their main markets but IoT demands global connectivity. This has led to a greater separation between mobile operators’ IoT businesses and network operations, resulting in more open approaches to global network access in line with the strategies of IoT managed service providers, says Berg Insight.
Established IoT managed service providers however typically have more advanced localisation capabilities through international mobile subscriber identity (IMSI) and embedded SIM (eSIM) profile donor agreements. Berg Insight believes that the separation of IoT connectivity businesses and networks will continue, driven by changing industry dynamics and a shift to new eSIM technologies. This implies a strong case for global consolidation of cellular IoT connectivity platforms.
There is significant growth in the number of connections and Juniper Research has uncovered that the number of roaming IoT connections will grow 300% over the next five years; from 145 million in 2023, to more than 600 million by 2028. Figure 1 details the average cost per megabit of data generated by roaming IoT connections in 2028.
A study by the firm has found the global number of 5G IoT roaming connections will rise from 15 million in 2023 to 142 million by 2027, representing over 27% of all 5G roaming connections in four years. It predicted that this growth will be driven by the acceleration of 5G standalone (SA) deployments, with intensifying roll outs in home markets providing increased momentum and a strong value proposition for 5G SA-specific roaming agreements.
The research forecast that 21% of global 5G IoT roaming connections in 2027 will be found in West Europe, despite that region only accounting for 5% of the global important for to incentivising IoT users to implement a roaming business model, thus driving growth of IoT roaming connections.
Report author Elisha Sudlow-Poole commented: “To further capitalise on the growth of 5G IoT roaming in West Europe, operators must form roaming agreements that utilise standalone 5G networks to improve network performance for roaming connections, and provide the same level of service when roaming as they do on home networks.”
Operators look to add value
In addition to 5G standalone-specific roaming agreements, the report urged operators to implement roaming analytics tools that use AI to maximise roaming revenue, as they enable operators to efficiently assess the significant amount of roaming data generated by 5G roaming connections in real-time. The report anticipates key verticals, such as autonomous vehicles, will necessitate advanced roaming solutions, owing to their data-centric nature. The research emphasised that roaming analytics must be integrated directly into platforms to maximise their value proposition to network operators, and enable swifter reconciliation of clearing for stakeholders.
IoT roaming will remain a key driver of revenue with Kaleido Intelligence finding in a recent operator survey that 64% of respondents see IoT roaming use cases as the main driver of roaming revenues over the next three years. Research from the firms has forecast that combined wholesale and retail roaming revenues generated by consumer and IoT mobile connections will reach US$45 billion in 2024. That represents a 47% increase compared to pre-pandemic levels.
The firm says the increase will be driven by rising data roaming activity, primarily fuelled by consumers transitioning to 5G roaming services. This anticipated expansion in both consumer and IoT roaming data usage is expected to soar by 36% annually, reaching close to 5,000 petabytes in 2024.
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