How Much Connection Revenue Will IoT Drive?

By 2020, nearly two billion devices with mobile connections capability, 2.7 billion devices that can connect to one or another low-power communications network and 3.3 billion devices with Wi-Fi capability will be shipped, or more than eight billion total devices in one year, according to IHS Markit.

If correct, and if all those devices are connected to networks, then perhaps 4.7 billion devices will likely represent new “public” potential network connections. The 3.3 billion Wi-Fi connected devices will mostly use existing public network connections.

Public network revenue will feature lower average revenue per device than public telecom network services providers have been used to when serving “humans,” however. If a mobile phone account might represent roughly $40 per device in monthly revenue, an IoT device might represent about $1 or $2 a month or less, depending on the amount of data any particular sensor has to transmit, over a month’s time.

That is one important reason why larger tier-one telcos will be focusing on IoT systems, services and platforms, not simply connectivity. Most of the revenue will be in devices, software and applications, not connectivity.  

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