Transforming IoT Connectivity from Variable Cost to Predictable Commodity
Executive insights from 1NCE COO Kim Juchem
The business case for the Internet of Things (IoT) typically revolves around reducing costs, increasing sales or making processes more efficient. When assessing the feasibility of deploying IoT technology, companies make predictions about where they can achieve these results. To substantiate those predictions, they want to gather data from a plethora of devices and use that information to clarify actionable conditions.
Consider a company that operates parking facilities in a major city. Suppose the company wants to deploy an IoT sensor in each parking space of every garage and lot it operates, enabling it to identify which slots are full. When those spaces communicate their status to an associated smartphone app, motorists can locate a place to park without wasting time and fuel driving around in circles. The company increases the rate of use of its facilities and therefore its profits.
Before this IoT deployment scenario occurs, however, the company must make fundamental decisions about how – and whether – to proceed, based on its answers to equally fundamental questions:
- Should it deploy a small-scale proof-of-concept program before investing in full-scale connectivity?
- What will the program cost, either as a test or at full scale?
- How much can this IoT effort increase parking usage and revenue?
- Will that revenue increase justify the cost of the IoT deployment, or would a marketing campaign achieve the same results?
- Will the IoT deployment cover enough parking spaces to prompt motorists to download and use the company’s app?
- If no other parking-lot operator in the city has connected its properties, should this company become the first to do so?
These questions highlight a set of unknowns that determine the value of the IoT deployment, including the costs and lifespans of sensors and the investment in software development, both for end-user applications and for the backend database that collects IoT data. All of these prices require research, but the biggest unknown remains the cost of connectivity, which can represent anywhere from 10 to 20 percent of the total cost of IoT deployment for narrowband applications. As a result, IoT device manufacturers and adopters have been forced to go beyond their areas of expertise and try to project the data requirements of devices they haven’t used before.
Until now. 1NCE is a native IoT carrier that not only understands the pain points of IoT deployments but offers straightforward answers to their most important underlying uncertainties. For €10, 1NCE offers a 10-year connectivity contract with a 500MB data allowance and a SIM card capable of switching seamlessly among virtually all current network protocols, including 2G, 3G, and NB-IoT, as well as future technologies that have not been deployed yet. On an IoT module with a modem that supports future connectivity technologies, the 1NCE SIM card remains viable throughout a 10-year deployment.
Traditional connectivity contracts force customers to allocate usage on a month-by-month basis, charging overage fees for any period in which usage exceeds allowances and basic “keep-alive fees” when no usage occurs. Therefore, those pricing penalties prompt significant annual cost increases for the owner of the IoT solution. 1NCE provides an overall data allowance across the 10-year length of its contract, with no monthly allocations, basic fee requirements or overage charges. Customers can use and segment that pool of data however they wish, without fear of unexpected monthly or annual cost increases.
Manufacturers who create and program IoT devices correctly set them up to transmit only a predictable amount of information to avoid any expensive surprises with respect to long-term data usage. With a prepaid plan from 1NCE, the IoT connectivity price tag itself becomes predictable. Instead of an unknown add-on, connectivity becomes part of the product itself, making full IoT deployments just as easy to budget and plan as small-scale rollouts. With connectivity reduced to a commodity, the remaining costs constitute nothing more than one-time line items, and all aspects of the project scale together.
1NCE believes that IoT devices offer a transformative opportunity to enhance profitability, simplify everyday life and make new capabilities possible. With long-term connectivity from 1NCE, the unknown – connectivity cost – becomes a known, making IoT devices prepaid, flexible and deployable at any desired scale.