As we are set to reach 20 billion devices connected to the Internet of Things by 2020, we are nearing a point where the IoT era will be our new normal. However, as in the case of a recent online story, there could be some unintended – and expensive – consequences.
A team of scientists were tracking the migration path of several eagles, who were each tagged with tiny, trackable wireless SIM cards. The eagles unexpectedly drew huge data roaming charges when they flew from Russia to Iran, and then on to Pakistan. It is a timely reminder that there are still some revenue assurance questions that need to be addressed in a world where ‘everything’ is connected.
Do you have the revenue assurance capabilities to manage IoT roaming?
While the story of the migrating birds is a fun example that demonstrates the complexities of IoT and wireless roaming, it should not be viewed as an isolated case. The rise of the connected car can easily emulate the complexity of revenue assurance in an IoT world, because cars are inherently roaming devices. 5G will bring vehicle-to-everything (V2X) services, which involve vehicles exchanging data with each other, for optimizing self-driving cars and improving safety and comfort on the road. Machina Research predicts that by 2020, 90% of cars will be connected with IoT sensors. McKinsey & Company estimates that connected cars create up to 25GB of data per hour, which is equal to dozens of movies being downloaded in HD. With millions of cars on the road ‘talking’ to each other, the potential for mounting roaming costs could be massive. With flat fee rates and the tight margins that come with them, carriers need to be alerted to hidden costs (like roaming) that could quickly eliminate profitability.
IoT assurance is still relevant for flat-fee business models
Many IoT services are being introduced into the market; most with fixed fee/flat rates in order provide a level of certainty to the customer. But the majority of these new services are not being closely monitored regarding their cost impact. This should be deeply concerning to any service provider.
Historically, most telecom operators have been primarily concerned with providing ‘best effort’ connectivity from A to B. They have had limited ability to tailor the characteristics of their network to meet the specific needs of different digital services and MVNOs. 5G network slicing is set to change this paradigm by unlocking new types of utilization models. In the near future, IoT MVNOs will be able to request access to an operator’s network resources for running their proprietary applications. For instance, we could see the rise of Automotive MVNOs offering customized V2X service bundles, leveraging the benefits of specialized 5G slices that guarantee certain levels of connectivity - and even specialized services like mobile broadband, GPS and video content custom designed for optimal performance within the vehicles. With network slicing, business customers will request access to these highly customized networks tailored to their specific requirements, which will all be governed by service level agreements.
One of the key benefits of 5g slice resources is that they are dynamic in nature, even for resources beyond simple data consumption. While this ability may benefit different use cases, from a cost management perspective - it’s a challenge. This added complexity creates the potential for service provider costs to quickly escalate and becomes especially dangerous for fixed-rate services offered by carriers that don’t have the ability to analyze margins. Managing these dynamic costs and revenue-share structures with different partners requires carriers to take a new look at their revenue assurance capabilities. Profit margins will be slim for most IoT services, and revenue assurance tools need to have flexible policies that will allow carriers to assure and maintain profitability in real time.
Cars, like birds, cross borders and roam - but no bird species will become an MVNO.
While the researchers weren’t held liable for the wireless roaming debt incurred by the migrating eagles – the revenue assurance risks associated with IoT roaming on 5G networks should not be underestimated. Many 5G use cases are based on the expectation of universal access to network services without the need for complex business arrangements between communication service providers. As the roaming eagles’ scenario highlights, with IoT this might not be as simple as it sounds. For example- when vehicles cross international boundaries, roaming from one operator to another. In such a scenario, the same or similar features of the 5G slice supporting the roaming car should be available in the visited operator’s domain. Continuity of service when moving between different communication service providers (e.g. international roaming) is an important feature that needs to be provided and assured within 5G slice characteristics.
The Network Connection Service comprises a set of technical attributes that determine the behavior of the slice, as well as the topology and geographical spread of a slice. All of these characteristics will have an impact on dynamic pricing that are directly related to real-time provisioning and usage. In a 5G world, the ability to collect accurate network performance data will be of critical importance for revenue assurance. Especially when carriers need to meet the challenges of a business environment with SLA-based contracts and complex billing arrangements. Having the right tools in place to analyze data from multiple sources and drive the right risk-management decisions will be a key asset in assuring the 5G and IoT value chain.