As organisations in the region cope with and strive to rebound from the not-so-great economic conditions, needless to say, innovation is the best recourse. And given the increasing trends to stay connected in various means all the while, Internet of Things and Machine to Machine communications top the innovation agenda for service providers. In 2016, IDC predicted that most organisations in the Middle East would begin to focus on IoT as a means of reducing costs and improving operational efficiencies. There also was a rising interest in the rollout of dedicated IoT networks. Looking ahead, it’s being expected that operators will focus on enhancing IoT platforms to shorten the time to market of new solutions and offer a quicker route to market.

The key challenges to IoT growth in the Middle East and Africa centre around data privacy and security concerns and the complex nature of IoT ecosystem, with its numerous standards and alliances, according to IDC. Connectivity is an important part of the entire IoT/M2M value chain. For operators to remain relevant and be a part of the ecosystem, they must invest in platforms that allow them faster time-to-market and differential charging mechanisms on M2M/IoT services. However, this is easier said than done. The first step is to restructure the operator’s business model to create a separate business unit to handle M2M/IoT business. Operators must also change the DNA of their sales force to discuss solutions around M2M/IoT with their enterprise/business customer base.

Pedro Aleixo, group enterprise director, Zain group believes that from a pure connectivity perspective, taking IoT offers to the market is quite similar to launching any other mobile value proposition; it is a simple tariff and doesn’t pose any challenge to mobile operators. However, he says: “Challenges arise when operators ladder up the value chain, and aim at targeting end-to-end solutions, being able to design, implement and support new business models for their customers”.

To be successful in the broader IoT space, Aleixo recommends that operators need to go beyond connectivity and develop consultancy and integration skills. “Consultancy skills to understand the customers’ business and value chain and to be able to design, not only cost optimisation solutions to run their existing business, but above all, systems to support radically different business models for their customers. Integration skills to support the new business models, developing capabilities in integrating sensors, location devices, automation equipment, software platforms and more complex after sales models.”

Sherry Zameer, SVP, IoT solutions for CISMEA region at Gemalto recommends that mobile network operators take a 360-degree approach by providing the essential building blocks that are required to create a robust IoT ecosystem. He says: “By bolstering IoT with the needed security measures, we help operators to focus on three main pillars: trusted connectivity, solid security and valuable monetisation platforms, all prerequisites of a productive and rewarding IoT roadmap.”

Operators will have to diversify their connectivity services and extend subscriptions from mobile to ‘things’. Solid security must also be implemented by protecting the device, the cloud infrastructure or network and the lifecycle management of the device, using embedded secure software solutions, data encryption, cloud based licensing, identity and access management and tokenisation management. Last but not the least, mobile operators must put in place a proper monetisation platform and be suitably agile to deploy new applications quickly to guarantee better ROI.

Alexo says that once an operator decides to ladder up and target higher value chain tiers it needs to acquire new competences in product development and delivery, marketing, sales and operations, and, on top, a new approach to partnerships – operators can’t do it all by themselves, they benefit from building an ecosystem of partners that complement us technologically and in the go to market.

The prime purpose of any service offering boils down to the ROI it generates at the end of the day. The potential return from an M2M/IoT programme is largely dependent on the involvement and relevance of the operator in the value chain. “If operators get involved in device distribution, service provision and data analytics, they can create a competitive advantage in the market,” says Zameer. He further draws attention to the fact that M2M/IoT subscriptions are typically postpaid giving far greater ‘Average Revenue Per User’ (ARPU) than standard prepaid consumer subscriptions in some markets if operators can charge differentially for the service in addition to the connectivity. Opportunities will exist in market sectors with large scale potential such as utilities, automotive, transport and construction. Healthcare is another growth area.

Andy MacDonald, vice president - global service provider, Middle East, Africa & Russia, Cisco believes that IoT and M2M communications will deliver significant competitive advantages for service providers who can grasp both the platform challenges and the services opportunities. Moreover, telecom operators themselves can use IoT to drive efficiencies such as pre-emptive maintenance and smart energy management.

MacDonald stresses that it is as agile service providers that. “By transforming their networks into highly secure and automated platforms, capable of delivering a full range of services from provisioning and managing billions of ‘things’ to delivering ultra HD video communications and entertainment, operators will ensure they are at the heart of IoT growth, not at the margins, disenfranchised by over-the-top players grabbing the bulk of the profits.”