Operators unprepared for high gains from low-power IoT roaming

As the 5G market rapidly evolves, one key market has come to life over the past few months is low-power internet of things (IoT). A study from specialist telecommunications analyst Juniper Research is predicting that there will be more than 490 million low-power IoT roaming connections by 2028, growing from 90 million in 2023.

The report, Global IoT roaming market: 2023-2028, said that this substantial growth of 560% over the next five years will be driven by increased bilateral roaming agreements that cater specifically to these low-power devices. However, the report warns that operators are still underprepared to capitalise on this market shift and the significant roaming revenue arising.

Over the past 12 months, low-power wide-area (LPWA) cellular technologies that specifically developed for IoT applications have gained maturity and scale with networks, such as NB-IoT (Narrowband-IoT) and LTE-M (Long-term Evolution for Machines), and are increasingly used to connect devices and sensors over cellular networks to remotely monitor environments in industries including smart cities, agriculture and manufacturing.

A key feature supported by the latest technology is passive or ambient IoT, which aims to connect sensors and devices to cellular networks without a power source and that could dramatically increase the number of cellular IoT devices. This facet is increasingly becoming appealing to several enterprise verticals.

NB-IoT and LTE-M are backed by major mobile operators, offering standardised connectivity with global reach. Yet Juniper warned that a key technical challenge faced by operators is their inefficiency in detecting low-power devices roaming on their networks, meaning that operators lose potential revenue from these undetected devices. Due to their low data usage and intermittent connectivity, these devices require constant network monitoring to fully maximise roaming revenue.

The report recommends that operators partner with vendors that can provide AI-based roaming detection services. These services, said the analyst, will likely automate the continuous assessment of all roaming connections on their network, identifying low-power devices that sporadically roam onto networks.

“Operators must fully leverage the insights gained from AI-based detection tools to introduce premium billing of roaming connections to further maximise roaming revenue,” said research author Alex Webb. “This must be done by implementing roaming agreements that price roaming connectivity on network resources used and time connected to the network.”

The Juniper study comes just as other research from IoT analyst firm Berg Insight calculated that the installed base of fleet management systems in the Americas will reach 37 million units by 2027. In its Fleet management in the Americas report, Berg observed the number of active fleet management systems deployed in commercial vehicle fleets in North America was 15.3 million in Q4 2022 and growing at a compound annual growth rate (CAGR) of 12.6 %. This number is expected to reach 27.6 million by 2027.

In Latin America, the number of active fleet management systems is expected to grow at a CAGR of 12.6% from 5.3 million in Q4 2022 to reach 9.6 million in 2027.

The study also found that there are now more than 30 players with installed bases of over 100,000 active fleet management units in the Americas. At the end of 2022, the top 30 vendors together had nearly 15 million vehicles under management in the region, and the top 10 alone represented half of the total installed base in the Americas.

Driven by growth strategies based on M&A activity and high-pace organic growth, Berg Insight anticipated a future scenario where the global fleet management market is dominated by a handful of providers with installed bases measured in the millions. It added that the milestone of one million connected units worldwide has already been surpassed by more than 10 solution providers. Five of the vendors have achieved two million units and two players have surpassed the three million mark.