IoT Network Consolidation: How is it Happening?

How is the consolidation of IoT networks, key for cities and utilities, happening? The consolidation is all about scale. Scale can ensure project growth and reliability, preventing latency to give way to correct transmission. But more importantly, scale will bring the necessary profitability to keep the network up and running with a good service level for long-term contracts. Small pilot networks with 2 gateways for just a few sensors, or even city-wide IoT networks operated by local players make it hard to find the break-even point. A scaled network means possibilities for a flow of projects, so that hundreds, thousands or millions of sensors can be connected and managed by a single team, reducing the cost per connected device and increasing profitability. IoT networks started out with many local LPWAN networks and operators. So, each location had its own player and infrastructure. This model makes it hard to scale beyond a certain geographical point, especially for companies that work across different municipalities, regions or even countries, like utilities. If a water utility wants to digitalize their network, they’ll have to work up contracts with different players for each location. This brings extra steps and costs to already complex and expensive projects. To make the process easier, there needs to be a consolidation. So, how is it being achieved? There’s organic growth, so companies deploying and expanding their networks. However, this is a slow process, because it means one actor deploying each gateway, learning about each area’s rules… Scale is slow and difficult here. Then there’s telcos. Telcos have extended into IoT services, using mostly NB-IoT or cellular. But they are struggling due to the business model. They’re used to high Average Revenue Per User or Unit, whereas IoT requires low costs for a dense network. Platforms are also a route to consolidating, as they aggregate different networks. It’s mostly about management and coordination here though. And then there’s the acquisition strategy. It is proving to be the fastest way to scale. In this strategy a company buys local operators and then integrates their system into their platform. This strategy is capital intensive but allows for fast expansion into markets with clients and an already deployed infrastructure. The biggest example of how this consolidation is happening is Swedish IoT network provider Netmore. It’s been buying networks for some time. They’ve bought Actility, Arson Metering, Everynet, Senet, Redexia, Techtenna, Talkpool… Securing expansion, in terms of infrastructure, clients and knowledge, across the world. The Actility acquisition added to Netmore’s network 14 million connected devices and coverage in over 100 countries. Netmore’s moves suggest the consolidation of IoT networks could happen through acquisitions, leading to fewer players owning the infrastructure. If consolidation succeeds, large, international deployments will be able to take place, profits will be unlocked, and major projects like meter deployments will happen faster.