Last week, Los Angeles hosted a U.S. version of the Mobile World Congress techstravaganza held every February in Barcelona. Over the last decade, MWC has gone from a show for mobile operators to a CES-level, must-attend event for everyone is tech. But the carriers are still there, and it’s time for the show to evolve (or perhaps for another show to take its place) as the mobile-centric world becomes a data-centric world enabled by connectivity, cheap computing, and cheap sensors.
Yes, I’m talking about the internet of things. To figure out what that future means for the original constituents of the MWC event I spoke with Phil Skipper, head of IoT business development at Vodafone Business, about the role of the carrier in the IoT. His answer surprised me. In short, it boiled down to: “It’s not about what the telco wants to sell, but what the customer wants to buy.”
Such a statement is an about-face for an operator, which have historically lacked both the tools and the will to become customer-centric unless the customer was trying to connect a million or more devices. Even when potential customers had the numbers, carriers still dictated most of the terms, leaving customers frustrated and locked into inflexible contracts and pricing that might not make sense for their planned business models. Remember all those pet-tracking devices that required a monthly subscription fee?
But Vodafone is at least changing that model — because it has to. Skipper says that the speed of business is changing, requiring Vodafone’s customers and Vodafone itself to adapt. He says that a business today has to not only constantly deliver new and compelling products, but respond to information from customers and those products themselves, and in a rapid fashion. Put another way, companies have more to do and less time to do it. This is the heart of the challenge brought forth by digitization.
Vodafone recognizes that challenges associated with digitization will affect its business before it affects its customers, which means it has to act now to help its own customers figure this shift out, says Skipper. The goal is to focus on delivering high-quality service and to make products that are flexible and easy to use. Again, telcos talk about this all the time, but dig beneath the surface and you often find that these sentiments are just words. Vodafone is actually creating products that are different.
To help customers solve the challenges of communicating with devices, releasing products quickly, and managing a global customer base Vodafone this week made three announcements. The first is that it has signed a network-sharing deal with AT&T, which means customers of both carriers can roam on both carriers’ NB-IoT networks. The roaming arrangement creates what Vodafone says is the largest NB-IoT footprint in the world. It will include the country-wide NB-IoT network for AT&T in the U.S. and the Vodafone networks in Spain, Germany, Italy, the UK, and the Netherlands. It will be available to customers by the end of 2019.
Vodafone has also created a platform called Vodafone Business App Invent (or “Invent,” for short) that bundles all of the connectivity and billing infrastructure into a single service pre-primed for popular use cases such as asset tracking. The platform is built around specific use cases, wrapping hardware, connectivity, and basic app infrastructure together so someone can build their own service on top of it. Skipper stresses that Vodafone’s local operators will choose the supported use cases based on regional demand.
Pricing for this platform is unusually flexible for an operator effort. Skipper says customers can first get access to the platform via an online sales channel, then tailor a pricing plan based on the type of business model they plan to develop. So, a government buyer could pay for a 5-year plan up front, whereas a small developer might pay a device fee tied to the number of users. As a customer grows, they can transition to a more traditional sales relationship with the sales office of their particular country. It’s a far cry from how most telcos have handled IoT connectivity sales, and more in line with newer offerings such as Comcast’s MachineQ or Sprint’s connected products shop.
Vodafone Business also opened an IoT Open Lab in Redwood City, Calif., to help inexperienced customers test out their products and see how they might work as the business scales. All of which is pretty basic stuff; telcos have had variations on innovation labs for more than two decades.
As a final surprise in our conversation, when discussing how to give customers what they want, Skipper said Vodafone will not limit the services offered to products based on licensed spectrum. Cellular networks use licensed spectrum, while Wi-Fi, Bluetooth, and LoRa used unlicensed airwaves. Skipper said that most customers will want high-quality service, which tends to equate with licensed spectrum. But as to the role of a carrier in the IoT world, he said: “They need to be able to connect anyone, anywhere, with anything.”
To emphasize how important he believes having high-quality service will be to future customers, Skipper said Vodafone has already worked with a few manufacturing customers to build private 5G networks for their factory floors. He expects Vodafone will be called on to do more as connectivity becomes an essential element of everyone’s business. I’m sure carriers aren’t going away, but I’m also not optimistic that all connectivity will go through them. So far, Vodafone has only 88 million IoT connections globally.