This is a post by one of our exhibitors, Bright Box. Bright Box will be participating in the 11th edition of the Asia IoT Business Platform in Hanoi, Vietnam on 29 and 30 November 2016. http://www.bright-box.eu/
As I work for an IT company within the automotive industry I can tell that cars are the best customers for mobile operators today. Do you know why?
In most countries, last year’s Mobile Network Operators (MNOs) critically lost their consumer base growth. And usually they also lose business revenue every year.
People have already purchased as many SIM cards as they can. Every person (in modern countries) usually have 1–2 SIM cards for smartphones (one for personal and second for business use) and sometimes tablets equipped with SIM card. No more if we are referring to the mass market.
Data analysed by technology research firm Ovum
At the same time a competition between mobile network operators has dropped its traffic margin per SIM card to a very low level. Data bundles offered from operators are large enough for most people and same time these bundles are very cheap.
Of course regular services like voice and SMS are already in the past. People call and text using WhatsApp or Skype using Internet from their data plans with operators.
Data consumption grows fast. Most of all because video service usage has grown. And the second driver for this has been a growth in cloud music services.
Data consumption is growing at the same time operator revenue is not. Data plans become cheaper and cheaper. So operators try to sell more SIM cards with new services subscriptions or launch new services for all SIM cards to generate new revenue channels for its business.
Source: Wireless Operator Strategies Service
IoT as a chance
IoT a hot topic these days the telecom sector. Operators trust IoT will bring them new growth points and they try to find out what are the best business models for it.
People already bought too many SIM cards? Sell more SIM cards to other things! Things — are new customers for operators. And a new chance to sell more.
Internet Of Things (IoT) — the connected devices market is growing very fast.
IoT looks like what M2M business operators had years before. M2M itself is about B2B projects: ATMs, payment terminals, electricity meters, fleet tracking and so on. But IoT gives M2M a new breathe — a chance to launch B2C high margin services and new business models, an empty market niche of unconnected consumer things and yet small competition.
IoT sounds good but not the whole segment can help operator business. IoT has different directions: Smart Home devices, Wearables, Connected Cars and others.
Wearables. Most new IoT devices developed are wearables. But most wearables use Bluetooth to connect to the owner’s smartphone. They don’t need a special SIM card but use the owner’s smartphone to connect to the internet and other services. At the same time wearables do not generate too much data because they don’t have services with heavy content. So they are not present for operator business.
Smart Home. If your home equipped with smart devices — it is 99%+ chance it has good Wi-Fi internet which is provided by wired connection. Again MNO are out of business here (we are not referring to MNO wired network providers).
Connected Cars. This is something really special and MNOs like it very much.
Cars are really our second home where we spend a lot of time each day, we listen to music, our passengers watch the videos, we use navigation software with traffic data updating in real time from the cloud. Our cars are something we care about very much. We want to know what happens to them when they are far from us. Cars get connected in order to provide their owners with data on their position, their health status and other things sent to the owner’s smartphone, in real time. Also, cars can become remotely controllable. So we can prepare a car to the trip in advance. Or send an address to a car navigation system before we get into the car or start the climate control system to precool or preheat the interior.
The most important thing for operators — cars are 100% movable things in the IoT world. So Wi-Fi or wired connections cannot help them stay connected to the internet and the cloud services. And our second home — we use all our gadgets in it like tablets, smartphones, laptops which always needs the internet.
So cars are the MNOs best friends. Because they can’t become smart and connected without SIM cards.
New competition for MNO s— a car as a customer
Wi-Fi inside the car has become a popular option for the US market.
Wi-Fi in OEM embedded car infotainment systems to reach almost 60% in N. America by 2019
Wi-Fi in the car also means people will download more cellular data per month. For example when you have childrens using gadgets like tablets, game PSPs and so on — you’ll plug a SIM card into every such and pay for its data subscriptions separately. But when your car has Wi-Fi — that means each child will continue to use all their devices inside the car as they do at home. When cars have Wi-Fi — car owners buy more data from operators. Because he (or his passengers) are able to use more devices inside the car they usually use only at home/office with wired internet.
But for operator business competition is not only to sell more SIM cards to new segment like cars. When in several years all cars will be equipped with a SIM card — what is next? Next again — fall of the competition margin for the full market segment.
Operators try not to be only the only connectivity provider.
VAS services like SMS dating or weather forecast, music and video content services. But operators don’t run projects fast enough and feel the market changes in time and loose VAS challenges with external services providers. Today music services are lead by Apple, Google and Spotify. Video — Netflix. SMS itself was gone after WhatsApp and others new players have arrived.
Do you remember when Nokia smartphones were run by Symbian OS? It was a basic mobile OS on the market. And operators were in the business of mobile app sales. All Symbian application stores were controlled by operators. And they thought they were smart enough to hold this market segment. But there came Apple with the first iPhone. Operators thought it was too small and a new niche product and let iPhone have their own AppStore with their own billing. So money streams for mobile applications started to flow without the operators. That was the operator’s huge mistake. After the Apple expansion next came Google with the Android with the same business model. So operators worldwide lost billions of US dollars letting Apple charge customers for applications directly without mobile operator.
Services are always more profitable than just traffic and bring competition advantages to the operator’s basic traffic business. Connected Car services are a new chance for operators to win the game. They have to learn from the past and not make these mistakes again.
Today Verizon, AT&T, TeliaSonera and others develop Connected Car products and services.
Big operators are investing in own Connected Car services and technologies. Smaller — use white label solutions presented on the market. Finally they understand — Connected Cars are their chance for a good future. There will be no other connectivity channel in cars other than the cellular network in the near future. And it is the best chance to take new market segment not only with a basic connectivity service but also with high-margin value added services.
How can operator reach the car as a customer?
At Bright Box we have successfully developed and launched Connected Cars services and products for many years.
Of course in every connected car project we have a partner — the mobile operator. Because every car we make connected in every country worldwide we need a SIM card from the operator to put it in the car. So maybe I have the first seat position to see the what happens with an operator’s expansion into the Connected Car segment today.
Operators basically have 2 ways to deliver its SIM cards to a car:
- Close a deal with a car maker or local car distributor (like Hyundai, Nissan, etc.) or Tier1/2 supplier (like Harman, Continental, etc.) to deliver SIM cards to new cars.
- Launch your own solution to the aftersales market and deliver it to all cars on the road.
The first option looks like an easier way from an operator point of view. It is a regular way for operators to sell M2M SIM cards in different market segments where GSM based M2M connectivity is needed.
As I can see that operators pay most of their attention to the first option and this might be a mistake. Let’s compare them:
So from this comparison I can tell that 2nd way is much more effective for the operator. It does require more resources to bring your own solution to the market. But at the same time it gives better perspectives for SIM cards sales and revenue from every SIM card sold to a car.
The second way is realized today by only few operators, some of them being:
- HUM by Verizon: https://www.hum.com
- TeliaSense by TeliaSoneira: http://iot.teliacompany.com/en/teliasense/this-is-telia-sense/
As a Bright Box company — we provide Connected Cars services and we have crazy good numbers from these services, as there is strong demand from end customers as car owners. We deliver our products as the value end customers are ready to pay for.
For example our try&buy retention is at 97% and this is huge! Not many services in the world have an even similar retention when customer vote for your service with their money.
Connected Cars are not the future. Today’s products that are the future. And most important — people need them and we know it.
These days, we see communication service providers (CSPs) getting increasingly actively involved in the IoT space. Being at the core of IoT value chain, telecommunications and IT service providers can bring together the large ecosystem of partners and speed up the time to market for IoT.
We interviewed some of our partners in Southeast Asia and summed up the main initiatives and efforts of telcos in the IoT sector.
What are the current focuses of CSPs in Southeast Asia?
According to JD Montelibano, the Head of Business Applications from the Globe Telecom IT Enabled Services Group, CSPs are in a good position to provide end-to-end and seamless IoT solutions for the Philippine market.
“We have been driving awareness on benefits of IoT primarily to businesses. Focus today is to drill into deeper and more specific use cases per industry that will solve specific pain points and problems,” said JD.
Meanwhile in Thailand, there are initiatives such as the collaboration between CAT Telecom, NIA, and TESA to promote IoT and smart city development by supporting tech companies and startups that have IoT/smart city innovation.
Yuttasart Nitipaichit, PhD, Assistant Vice President of CAT Telecom Data Center Department pointed out that CAT aims to provide IoT and smart city solutions as one of their main businesses.
“CAT’s main focus is to provide support on Telecom and IT infrastructure that would be the building block for developing smart city applications. We aim to provide support on mobile and Internet connectivity, IT infrastructure including Cloud platform and data center, and IT security solutions,” he added.
With a mobile penetration rate of 120% in Indonesia, Mirela Juravle, the head of M2M Projects in Indosat Ooredoo, believes that CSPs are trusted partners to help IoT adoption. Being in the driver seat, they want to lead the IoT development through an extensive portfolio of solutions and services ranging from connectivity, infrastructure, cloud services, data analytics to end-to-end IoT solutions and services; promoting innovation simple and open environments for local developers to build innovative IoT services; and Big Data.
One of Indosat success stories in 2015 is the launch of vehicle telematics solution which had greatly increased productivity for operational car fleets and logistic companies.
“We have done a lot of market educations in the last 2 years and this year we will continue to accelerate growth in banking, transportation and security, plus develop new markets in eHealth, user based insurance, business applications, industrial IoT, oil gas, Smart Cities,” said Mirela.
On the contrary, Malaysian CSPs have falled behind in taking the leap with IoT. Telcos in Malaysia have been criticized for being too conservative; and they are making big plans to grow their presence in the IoT sector and catalyze Malaysia’s Smart Digital Nation vision.
Digi has identified some key industry players that are at more matured stage such as the public services and logistic area leveraging on IoT adoption to drive customer experience and enhance business growth.
Lee Shin Mei, the Head of Enterprise Business in Digi, shared with us that Digi is exploring and always open for IoT as this is one of their main drivers moving forward.
“The current focus is really about creating the customer awareness, looking out for opportunities to collaborate and getting the right partners in place to support the initiative. Once we build the business value and can show to our customers the benefits of IoT, this would eventually build a sensible commercial value for all parties. In terms of segment or industry, there is really no hard rule about this part,” she added.
What are the advice for solution providers targeting Southeast Asia?
What do you have to identify and prepare beforehand? How to access the market and justify the right local contacts?
Southeast Asia countries are generally quite similar in the focus area and highlighted verticals for IoT, but slight different approach or key points have to be taken care of for each country.
Let’s have a look at the views of local CSPs from specific countries in the region.
JD Montelibano, Globe, Philippines:
IoT has huge opportunities and unlimited use case that are relevant to the Philippine market. What solution providers must do is to understand pain points and problems in a local micro level. They also need to have platforms that are inter-operable with other systems to drive seamless integration through readily available APIs.
Yuttasart Nitipaichit, CAT, Thailand:
Solution providers should study and truly understand problems of cities in Thailand in order to provide real solutions that could really solve the problems. In addition, they should consider partnering with infrastructure providers and end user device manufacturers as well to provide complete solutions. They should make sure that the value of their proposed solutions is higher and worth the proposed cost of investment.
Mirela Juravle, Indosat Ooredoo, Indonesia:
Indonesia market offers huge opportunities, and this is the top 3 advice I can give for solutions providers to be successful:
- Know the market, know the regulations
- Partner with a local company or establish local office
- Be flexible
Lee Shin Mei, Digi, Malaysia
Have creative ideas or products but also remember to be practical so as the end goal is to simplify and enhance customer experiences. Solution providers can also leverage on partnerships with telcos to create a more viable solution that offers end-to-end approach.
Receiving international IoT stakeholders with open arms
Over the comments and feedback I have received for my previous posts, there is one question that popped up frequently: Is partnership essential?
Southeast Asia is a dynamic market, with vibrant culture and varying work approach. Much work has to be done to be familiar with the ways businesses work in each country.
While telecommunication operators and governments are positively encouraging IoT solution providers from both local and abroad to help tackle local problems via technology, I believe having a contact point who has been around and understands the local market would be the most direct, fastest and safest way to access the pool of demand.
What do you think?
Asia IoT Business Platform partners with major telcos in Philippines, Thailand, Indonesia and Malaysia to educate enterprise on IoT adoption and raise awareness of the key business model transformation opportunities that can be tapped on.
If you are looking to connect to the local telcos in Southeast Asia, feel free to get in touch. Comments and feedback are greatly appreciated.
[:en]World Population Review clocked Jakarta at 10.2 million residents at the end of last year. If the surrounding metro area is also included, the population exceeds 28 million. Each day, Jakarta residents cope with a variety of infrastructure challenges, including sluggish traffic, shaky power grids, slow internet speeds, and floods brought on by inadequate drainage systems.
Indonesian Smart Cities
Indonesian government launched the Smart City vision Indonesia 2015 -2045, with ICT at the heart by enabling the 3 stages of the cities of the future: Decent Cities (comfortable, liveable and safe), Greener Cities (resilient to climate change and disasters), and Smarter Cities that are competitive and technology based.
Various stakeholders are working together towards developing smart cities, as seen by the smart city index that was initiated to answer challenges around how to wisely manage a city and increase residents’ welfare and quality of life. Depok, Tangerang, Pontianak, Surakarta, Madiun and Bontang are among the 15 winners announced for the 2015 Indonesian smart cities awards based on surveys conducted by Kompas daily newspaper and the Bandung Institute of Technology (ITB) with the support of state-owned gas firm PT Perusahaan Gas Negara (PGN). The awards were given to the cities to highlight their achievements as well as to encourage others to follow their leads and applied smart city concepts.
Major local operators working towards growing Internet of Things (IoT) network
Beyond providing connectivity, telcos in Indonesia are actively exploring ways to grow the IoT ecosystem. This can be seen through the heated discussions in the Indonesia IoT Leaders Panel in the 5th edition of Asia IoT Business Platform: IoT Indonesia. The panel was formed by Telkomsel, Indosat, XL Axiata and the Ministry of Communication and Information Technology, with Oracle as moderator.
Based on our interviews* with Indosat, partnership is important to drive the development in various verticals.
Actions were taken; earlier this October Indosat signed an agreement with Google to test Project Loon in Indonesia, supporting the Indonesian government’s efforts to provide last mile digital connectivity in remote and rural areas across the country. Indosat plans to continue to actively participate in the government’s Smart City programs by supplying end-to-end products and solutions specifically designed to fit the need. M2M services embedded within Smart City services include E-Tax, Smart Street Lighting and surveillance.
IoT Indonesia: Automotive sector is booming
At the 5th edition of Asia IoT Business Platform: IoT Indonesia this August, a new breakthrough in automotive sector was showcased by Telkomsel: T-drive, which is designed to monitor driving behaviour performance for safety. This new technology is on top of the current car tracking and fleet managemnet solutions they had developed, and Alan Manullang mentioned that they are working at the 2016 roadmap for connected car (Watch Telkomsel to push M2M Indonesia – Asia IoT Business Platform 5th edition).
IoT Indonesia is advancing rapidly. There are hopes to transform the chaotic mega-city of Jakarta into a “smart city,” in near future, one which uses ICT solutions to address mobile, transport, energy sustainability, infrastructure, governance, and security issues.
The 9th edition of Asia IoT Business Platform: IoT Indonesia will return to Jakarta on 15-16 August 2016 to gather the government, telcos and rest of the ICT industry for discussions on M2M/IoT sector developments, educate enterprises on IoT implementations and foster strategic business partnerships. Request for a brochure here.
Also view our take on The Role of Government and Partnerships in Driving IoT[:]
[:en]With Industry 4.0. becoming a widely known term, conversions about IoT in manufacturing are taking place in more and more companies.
Developments in IoT manufacturing
The manufacturing segment of the IoT market is forecasted to increase to USD 13.49 Billion globally by 2020 with a compound annual growth rate of 26.9%. The expectations for IoT in manufacturing are mainly centered around the IoT’s impact on lowering operational costs of companies. Other reasons for IoT investments include advantages in retaining customers, attracting new customers, improving service and support.
Current IoT investments that are unique to the manufacturing environment are taking place in three major initiatives:
- Smart manufacturing to increase production output, product quality, or operations and workforce safety as well as lower resource consumption
- Connected products to impact product performance, including collecting detailed information on products in the field, remote diagnostics and remote maintenance
- Connected supply chains to increase visibility and coordination in the supply chain, tracking assets or inventory for more efficient supply chain execution
IoT in Southeast Asia
In the APAC countries the IoT adoption is in the early stages of growth, but this adoption is forecasted to mature rapidly between 2014 and 2020. The total spending on IoT in APAC countries is forecasted to grow from more than USD 10 Billion in 2014 up to USD 79 Billion in 2020. Not only will the amount of money spend on IoT solutions change, but also its distribution. Within the next years Singapore’s market share of IoT expenditure is supposed to shrink by half until 2020, while Thailand, Philippines, Malaysia and especially Indonesia’s market share will increase.
IoT manufacturing in Southeast Asia
When looking at IoT spending in APAC countries, manufacturing is and will be the dominant Industrial sector with 30% of total spending. According to the Frost & Sullivan IoT report, the investment in IoT solutions for manufacturing in the Philippines, Thailand, Indonesia and Malaysia is and will be as follows:
As we worked with local telcos & government agencies to invite enterprises to attend our current Asia IoT Business Platform edition, we found the interest from the local manufacturing firms to be overwhelming. Manufacturing & Industrial Automation will be a big theme in 2016, especially in Thailand and Indonesia. Macroeconomic conditions (weaker local currencies, young workforces etc.) have also made these locales more attractive to international companies looking to set up manufacturing facilities – and technology, when used properly, can overcome (some) productivity inefficiencies usually associated with emerging countries.
Happy New Year!
We’re excited: with Internet of Things (IoT) advancements and education being one of the most heavily invested and focused areas in most Southeast Asian countries, we foresee more developments and adoptions of IoT taking off in 2016.
We are working with key advisors from governments and public sectors, local telcos, industry associations to formulate the most relevant topics for 2016. At the initial stage of discussions, we have identified the sectors that will benefit most from IoT and incorporated it in Asia IoT 2016 series which will take place in Philippines, Thailand, Indonesia and Malaysia.
- IoT as the solution to grow Healthcare and Manufacturing in Philippines
- “Smart City” pilot projects to be rolled out in Thailand
- Smart City vision Indonesia 2015 -2045; breakthrough in Automotive
- Malaysian IoT market to register $10.5 billion by 2025; IoT & Big Data to transform Healthcare
Lets have a look at the latest updates on the conference agenda.
IIOT and manufacturing
Manufacturing & Industrial Automation will see many opportunities in 2016, with macroeconomic conditions in emerging countries attracting international companies to set up manufacturing facilities.
As the Platinum Sponsor of the 7th edition of Asia IoT Business Platform: IoT Philippines, Globe Telecom will be speaking on transforming business process management in manufacturing from warehousing to shipping to installation.
Case studies on advanced manufacturing and smart factory applications in Korea by Korea Evaluation Institute of Industrial Technology and Germany’s experience with Smart Factory by Fraunhofer IAO will also be shared at the 8th edition of Asia IoT Business Platform: IoT Thailand.
Transport & Logistics
In countries like Indonesia & Philippines, the Distribution, Transportation, Logistics & Freight segment have employed M2M technology for years.
Also watch: Telkomsel to push M2M Indonesia
We are happy to have Pang Mei Yee, VP, Head of Innovation, Solutions Delivery and Service Management – Asia Pacific of DHL to share on how to leverage Big Data in logistics at our conference in May.
Also watch: Scania case study on a connected Indonesia
It is no longer news that governments in Southeast Asia are upping their push to Smart Nation status, going all out to integrate smart technology into everyday devices for both the benefit of society and the economy.
At the coming Asia IoT Business Platform in Bangkok, introduction to Thailand’s first smart grid electricity project to improve the country’s energy management and performance in areas of 0900 power generation, transmission and distribution by Pongsakorn Yuthagovit, Deputy Director System Planning of Provincial Electricity Authority will be an interesting presentation for companies looking to tap into the Thai market.
We are also bringing in Turkcell’s case study on theft prevention of transformers using GPRS based security system for reference.
Big Data, Cloud, Security
As IoT growth takes place, there will be a need for infrastructure and applications that can leverage cloud architectures and service delivery models. Increased demand for IoT applications will boost demand for cloud computing in Asia, as the use of on-premise systems will be unlikely to provide the same efficiencies that the cloud offers.
With support from partners including Software Park Thailand, the Storage Networking Industry Association (SNIA), the Association of Thai Software Industry (ATSI), the Association of Thai ICT Industry (ACTI), InfoComm Technology Association of the Philippines (iTAP), Semiconductor and Electronics Industries in the Philippines Foundation (SEIPI), Asia IoT Business Platform is looking to bring in relevant solution providers in this area for the benefits of IT divisions among end users invited.
IoT healthcare was the buzzword in 2015 with increasing attention for data protection and treatment efficiency.
Due to overwhelming response at the 6th edition of Asia IoT Business Platform: IoT Malaysia last November, Dr. Dhesi Baha Raja, Exponential Medicine Physician from Singularity University NASA Ames Research Center, GSP15, Phua Kok Soon, Senior Research Engineer, Agency for Science, Technology and Research (A*STAR) and Yau Teng Yan, Chief Medical Officer of Holmusk will be back to speak on artificial intelligence in medicine, importance of tele-health and big data to fight chronic diseases.
Also watch: Healthcare to benefit from IoT by Dr. Dhesi
Banking & Finance
Mobile payments and e-commerce are huge opportunities for Asean countries. Based on our conversations with various IoT statekholders at our 2015 events, mobile payments are expected to offer major opportunities for traditional point of sale players to move into upcoming mobile payment platforms in APAC.
Speakers confirmed for 2016 include Kerem Abuc, Mobile Financial Services Supervisor from Garanti Bank and Lesley-Ann Vaughan, Project Manager of M-PESA. They will be bringing in discussions on “Driving through mobility: Employing more IT and gadgets to attract and retain customers” and “African case study: Creating a reliable mobile banking platform for developing markets”
Moving forward: Asia IoT 2016
Asia IoT Business Platform strives to be the leading educational platform to raise IoT adoption in the region.
With the potential and ability to streamline and provide larger time and cost savings to a broad spectrum of enterprise tasks, opportunities for IoT adoption in Southeast Asia are proliferating. It is encouraging to see governments, telcos, industry-leading manufacturers, service providers, software and systems developers getting actively involved in making the Asia IoT investments pay off.
What’s your take and predictions for 2016? Any suggestions on where we could potentially focus on?
Feel free to get in touch should you have any comment or feedback on Asia IoT Business Platform 2016 series in Philippines (23-24 May), Thailand (26-27 May), Indonesia (15-16 Aug) and Malaysia (18-19 Aug).
(Request for full agenda here)