Uh Oh: Global Mobile Service Revenue from IoT Might Not Move the Needle

Internet of things access revenue might be quite smaller than many expect, in part because many of the connected sensors are going to use existing connections. On the other hand, an incremental $28 billion worth of global Iot-driven access revenue (in 2025) will be helpful. At that point, IoT access revenue might represent about three percent of total service provider revenues globally.

The implied bad news is that even those incremental new IoT revenues will only replace lost revenues from legacy services.

Assume total mobile industry revenue grows about one percent annually between 2016 and 2025. On a base of perhaps $810 billion, that would imply $886 in 2025 service revenues.

That, in turn, assumes that mobile operators, on a global basis, will add $8 billion to $9 billion in annual revenues, every year.

Now consider internet of things revenues. If you assume global IoT connectivity revenue already is about $6 billion, and grows about 18 percent annually to 2025, then we might expect global IoT connections revenue to be about $27 billion by 2025, adding a $1 billion or $2 billion incremental access revenue lift in the the early years, and perhaps as much as $4 billion in incremental new revenues closer to 2025.

One has to assume that the global increase in mobile operator revenues of $8 billion to $9 billion annually already includes the expected contribution from IoT access revenues, all other sources, and includes erosion of existing sources as well.
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