GSM operators turn to hi-tech remote control for growth

Major GSM operators that find their traditional roaming, text messaging and voice businesses under threat are currently turning to machines, appliances and objects for growth, BusinessDay can report.

Industry observers are of the view that the proliferation of over-the-top (OTT) content services such as Skype and Whatsapp could trigger a whopping 30-50 percent revenue hit on telecommunications companies’ voice services in the coming months.

In view of this, MTN, the nation’s largest operator by subscriber base, is optimistic it can profit from the ‘Internet of Things’ (IoT) phenomenon. Mobile operators are hoping that every ‘tweeting’ fridge or internet-enabled washing machine would need its own SIM card to ensure alway-on broadband connectivity.

IoT is a scenario in which machines, objects, animals or people are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.

Speaking with BusinessDay, Mteto Nyati, group chief enterprise officer at MTN, said, “We have already launched IoTin South Africa. By September, we will launch this innovative platform in Nigeria”. Nyati said MTN is likely to make incursions into the agricultural and power sectors in search of fresh business opportunities through the deployment of IoT. According to industry observers, this move would help the company offset declining revenues from voice services driven essentially by regulatory and competitive pressures.

Mobile Network Operators (MNOs) have been working aggressively to build up alternative sources of revenue, as industry analysts say voice average revenue per user (ARPU) is expected to decline to around $5 per month in the next five years, down from $6-$7 in April 2013 and $10 in 2008.

Data services are considered a critical driver of growth in Nigeria’s highly competitive telecoms sector, but as of mid-2013, the data internet market still remained relatively small, industry insiders say.

“In the agriculture sector, for instance, mobile operators are seeing increasing demand for wireless sensors and control networks to automate many farm tasks such as irrigation, grain drying, collection of information from rain gauges, soil moisture sensors, amongst others,” said Kamar Abass, managing director, Ericsson Nigeria, in a recent interview with BusinessDay.

Technology experts however say IoT platform enables mobile operators to deliver such sophisticated services. The agricultural and power sectors were accorded priority status by the Goodluck Jonathan administration, in light of their importance to the nation’s economic development.

The Agricultural Transformation Action Plan (ATAP), a state-backed market-oriented reform effort, however, is still being implementated, but industry analysts are of the view that this move would pave the way for the sector’s development in the future.

After the unbundling of the state-owned monopoly, the Power Holding Company of Nigeria (PHCN), into 18 successor companies (six power generation companies, 11 distribution companies and a transmission company), little is yet to be seen with respect to stable power supply. But interestingly, operators are looking at providing smart metering solutions.

Technology experts are of the view that smart metering completely solves the problems that result from power theft, inadequate planning and measurement of units of distribution that are transmitted to consumers.

“The biggest challenge we face in Africa is energy constraints. Smart metres, managing the metres in such a way that you switch them on and off remotely is another application that the IoT brings. Many of the municipalities in our countries have the opportunity to use this application to manage electricity”, said Nyati. Machine-to-Machine (M2M) communications, a subset of IoTis slowly gaining traction in Nigeria.  IDC’s Annual Enterprise Communication Survey, shows that only 30 percent of enterprises in Nigeria have implemented M2M technology in some form or other.

Even at that, just machines like security monitoring, fleet management, and point-of-sale machines currently account for the majority of M2M connections in Nigeria.

Advanced M2M applications such as smart metering, pay-as-you-drive-insurance, and intelligence building are said not to be widely used in Nigeria. Reasons adduced to this lag are connectivity issues and the complexities involved in implementing and managing such technologies.

M2M and IoT are similar but slightly different. While Machine to Machine refers to automated exchange of information between machines, vehicles and a central control centre, Internet of things is used to denote advanced connectivity of devices, systems and services beyond machine-to-machine communications, due to the fact that it covers a variety of protocols, domains and applications.

Ben Uzor