Cellular IoT Data Rates –Customer Demand Outpaces Customer Knowledge
Aug 01, 2019
A typical cellular IoT deployment consists of an IoT device sending and/or receiving data from an IoT application over public mobile networks. Cellular network operators charge IoT asset owners for enabling connectivity to their connected deployments. The important growth verticals for cellular IoT include Transportation and Telematics, Utilities and Industrial, Security and Safety, and Asset Tracking. Research shows that cellular IoT service pricing varies dramatically in the market, even among companies of similar size and business models. Therefore, companies without accurate benchmarking and pricing guidance could find themselves at a cost disadvantage as the cellular IoT universe continues to grow.
IoT Data Pricing Variability Continues to Increase
New Technology and increased competition is increasingly impacting IoT data pricing strategies. Network operators are increasingly offering discounted pricing in order to retain existing accounts and to attract new business opportunities. This trend has led to dramatically varied pricing across the cellular IoT customer base. With the introduction of IoT optimized networks (such as NB-IoT and LTE-M), the range of offerings for smaller data plan IoT deployments will likely increase. However, Frost & Sullivan research indicates that smaller data plans (1MB or less) have greater pricing variability among enterprise customers. And, this difference can be considerable. For example, for a 1MB data plan customers on the “high” end of the pricing spectrum can end up paying 125% more than customers on the low end*.
Furthermore, companies with large volume deployments may end up paying more than a smaller company that is perhaps a newer market entrant and is getting the best pricing available. For instance, research indicates that companies that have required IoT connectivity—and thus have established an IoT relationship with an operator—for at least 5 years could be paying more than companies requiring IoT service for less than 3 years*.
How Can Enterprises Get the Best Pricing for IoT?
It is essential for enterprise IoT customers to know the range of pricing options available and explore how to achieve optimum pricing for their IoT deployments. This, however, can be challenging due to the reasons below.
1) The lack of insight into pricing for similar deployments in the industry (price benchmarking);
2) The impact of variables such as size of deployment, contract duration and data consumption into service pricing;
3) A customer’s limited knowledge of the credits and subsidies available to them; and
4) The lack of knowledge regarding various operator pricing structure options, and which structure is most cost-effective for the customer’s specific IoT business.
Thus, many of today’s businesses continue to be overwhelmed when it comes to determining optimal IoT pricing structures. Here’s where companies such as Beacon Pricing Advisors can help. Beacon Pricing Advisors can help enterprise IoT customers optimize their IoT spend by finding the optimal pricing option according to a business’s unique requirements. Beacon provides specific pricing targets, customized cost-optimization guidance, and negotiation services for IoT businesses—all based on years of direct telecom experience which can be enormously helpful for organizations looking to deploy cellular IoT.
Fourteen years of product marketing, research, and consulting expertise, which includes supporting clients’ needs through more than 140 syndicated market research deliverables and consulting assignments. Particular expertise in Assessing next-generation telecommunications trends, technologies and market dynamics; Helping clients develop and execute their go-to-market strategies; Providing continuous inputs to clients into new market developments and helping them understand the strategic implications.