While the world has been witness to some path-breaking technologies in the telecom domain, the concept of internet of things (IoT) is emerging as a true game changer at various levels. The story is no different in India, where smart solutions will soon transform the lives of citizens given the rapid pace of digitalisation and increased internet proliferation in the country. The government’s Digital India vision is encouraging organisations to undergo a digital transformation by leveraging cloud and IoT technologies. This in turn has opened up several opportunities for stakeholders in the IoT value chain. Further, the Smart Cities Mission will be a key growth driver in the IoT space as the government focuses on creating smart and connected infrastructure in cities.
A look at the evolving IoT market in India and the emerging trends and opportunities in this space…
Growth and adoption trends
Currently, significant market research is under way for charting the IoT roadmap in the country. While these growth forecasts differ from one another on most grounds, they unanimously suggest that the Indian IoT ecosystem is set to evolve in a big way in the coming years. For instance, as per Recogn, the IoT market in India is currently growing at a compound annual growth rate (CAGR) of 41 per cent and will continue to grow at the same rate till 2020. Further, it states that with increased adoption, the segment will record a CAGR of 54 per cent between 2020 and 2025. Meanwhile, a market study by Genesys has ranked India second highest in terms of IoT customer maturity, only behind China, in the Asia-Pacific region. Deloitte, in its TMT Predictions 2017, has stated that the country’s IoT market size is expected to increase around seven times from $1.3 billion in 2016 to $9 billion by 2020. It estimates that around 60 million devices in the country (other than computers and smartphones connected to the internet) are IoT enabled and this number will increase to 1.9 billion by 2020. Further, according to NASSCOM, the IoT market in India is expected to reach $15 billion by 2020, accounting for 5 per cent of the global market.
As for the current adoption trends, the IoT market is being driven by deployments in the manufacturing, retail and logistics sectors for inventory tracking, point-of-sale solutions and vehicle tracking respectively. Industrial IoT is emerging in a big way as factories, cities and vehicles are being automated. Further, IoT will form the backbone of India’s smart city projects, the success of which is dependent on the active use of sensors and smart devices. Digital utilities will use IoT solutions for energy, traffic and waste management. Going forward, IoT solutions are expected to assume bigger roles and will become critical for all enterprise verticals. Sectors such as healthcare, telematics and agriculture are most likely to adopt IoT as it can have a far-reaching impact on the country’s huge rural population.
Besides industrial IoT, the growing uptake of wearables and smart home solutions will strengthen the consumer IoT market in India. In fact, the Indian home automation space is set to evolve significantly as consumers increasingly deploy voice-assisted home solutions, and smart lighting and surveillance systems.
Exploring the IoT potential
As Indian operators struggle to keep their bottom lines in order, the need to explore new revenue streams has become more urgent than ever. Most of the operators have expanded their data play in the past few years, and leveraging this data growth to explore new opportunities is a logical step going forward. To this end, the evolving IoT landscape presents significant scope for operators. The market holds tremendous potential for telecom operators as connectivity forms the backbone of IoT deployment.
Operators’ role in the IoT ecosystem will mature over time. In the initial phase, telecom operators will focus on providing SIM cards for IoT devices and solutions, and will eventually move up the value chain to provide overall end-to-end IoT solutions. For instance, Vodafone India currently offers a range of IoT solutions such as location trackers, automotive telematics, remote asset management, a managed IoT connectivity platform, wireless payment solutions, security and surveillance solutions, smart metering solutions, and specially designed SIM cards that operate under higher temperature and pressure. Bharti Airtel also has a similar portfolio of solutions. It has partnered with Luminous to help it develop IoT-enabled smart inverters with analytics and tracking capabilities, which enables users to monitor the performance in real time. Further, Airtel is providing an e-challan solution to several state governments. It is also involved in offering smart metering solutions to several electricity boards, and managing traffic lights in Telangana. In addition, the operator is foraying into the home automation or smart home segment with its IoT and machine-to-machine (M2M) solutions, which will allow users to control their lighting, heating, air conditioning, music and security systems through their smartphones. Airtel’s presence across millions of homes through its broadband, fixed line, wireless and DTH offerings makes it easy to leverage opportunities in the home automation space.
Reliance Jio Infocomm Limited is also planning to enter this space, offering solutions powered through its fibre-to-the-home networks. These solutions will allow users to convert basic electronic products into smart products through smart plugs, and control several activities in their homes through smartphones. As per Deloitte’s TMT predictions, operator focus on providing IoT-enabled SIM cards will take off in a big way in 2017, leading to over a billion additional SIM sales over the next three years.
In the long term, operators will emerge as end-to-end providers of IoT solutions rather than focusing only on connectivity needs. In fact, Deloitte expects leading operators to make significant investments in enhancing their IoT capabilities by providing data analytics and storage. Operators are already exploring partnerships with specialised companies in the areas of device, analytics, equipment and data management to facilitate the delivery of IoT solutions. This trend will further gain ground in the future. Airtel and Bharat Sanchar Nigam Limited have recently partnered with Nokia to create a strategic roadmap for network evolution to the 5G technology standard and IoT-enabled devices. Meanwhile, Tata Communications is partnering with Hewlett-Packard Enterprise for the roll-out of its IoT platform based on LoRa technology.
LoRa is a long range wireless technology, which offers a low-power, secure, bidirectional network dedicated to IoT/ M2M. This network can be leveraged by enterprises to connect objects. The LoRa network is currently available in Mumbai, Delhi and Bengaluru, and Tata Communications plans to expand it to 60 cities in India by end-2017.
Operators are also expected to spin off their M2M/IoT business into separate entities to better leverage opportunities in the IoT space. For instance, in November 2015, Reliance Communications hived off its M2M/IoT business into a new entity called Unlimit. The company has partnered with Cisco Jasper, Cisco’s IoT business division, to launch its first set of IoT products in India. Cisco Jasper is offering its IoT platform and other IoT products to Unlimit under a revenue sharing agreement. However, Unlimit is open to adding more IoT platforms and partners. In February 2017, it entered into a strategic partnership with Cumulocity, an IoT software platform provider, to deliver IoT solutions in India. Recently, in July 2017, Unlimit announced a strategic alliance with China-based Fibocom for the design and manufacturing of modules for wireless communications and development of IoT solutions.
According to Omkar Malage, senior consulting analyst, Digital Transformation Practice, Frost & Sullivan, “Forming strong partnerships, developing platforms, providing innovative services and adopting a consultative approach towards enterprises adopting IoT should be the main focus areas for communication service providers to cash in effectively on the IoT opportunity.” As per various industry estimates, IoT offerings can contribute 15-20 per cent to the overall revenue of Indian operators.
Further, operators can find a profitable business case in monetising the enormous amounts of data being generated through IoT devices. This data can help them personalise and customise their offerings effectively. In addition, IoT data can be traded with other businesses. Recently, Samsung Electronics has launched a complete brokering, metering and payments solution that allows device manufacturers and service providers to monetise the data shared by IoT devices.
Outlook
Going forward, India’s IoT growth story will revolve around factors such as the deployment of core IT networks, evolution of the device ecosystem, data monetisation and investments in IoT start-ups. While progress on these fronts is already under way, the implementation of the government’s Digital India and Smart Cities programmes will provide a further push to the IoT segment.
