How to create growth in the IoT market?

MWC Barcelona 2019 kicked off on February 25 - 28. We were invited to a closed strategy session to talk to the world’s telecom operators. Our CEO, Tom Scharning’s topic for the presentation was how the operators should create growth in the IoT market in the future.

IoT is the most important driver for growth

GSMA Mobile World Congress is the world’s largest exhibition for the mobile industry. Each year, MWC is setting up a conference with good discussions and prominent leaders representing global mobile operators.

There were many interesting key notes and sessions during this year’s conference – here you can see the key notes live. An extra inspirational key note was from Chua Sock Koong, CEO of Signtel Group. One of her main messages was that 25 billion “gadgets” will be connected in 2025. This provides enormous opportunities for developing new services. At the same time, the assessment is that only 5% of the value creation from this comes from the network, while 95% of the value creation comes from the services built on top of the network.

Telecom operators must work with companies like us

Datek was invited this year as one of two IoT companies for a strategy seminar for the telecom operators on how they can capture a larger part of the value creation from IoT. Datek’s starting point is the Nordic market, advanced technologically but with small markets. This means that cooperation and standardization are necessary to create competitive solutions. At the same time, Datek believes that the Nordic social model – with a culture based on trust and cooperation and relatively small differences stimulates creativity and innovative solutions that can be at the expense of established structures.

Datek’s advice to the telecom operators summarized:

Perhaps the most important value the telecom operators have today is the brand and trust to their customers, through decades of secure delivery of services and monthly invoices.

2 possible ways to take part in value growth are:

- Creating vertical solutions that use their own brand and invoicing, but connects 3rd party deliveries in the total delivery.
- Create what we call a “Connectivity agnostic managed service stack” ie a solution that utilize all available network technologies – not just GSM services at the top. This can be offered to special companies with individual solutions.

Regardless of the solution – the telecom operators should think about their organization. The operators are super-optimized to deliver today’s solutions. In order to get new delivery models with new business models, Datek believes that this should be organized outside of the normal operating organization – to ensure enough capability to execute.

Datek is well positioned

The interesting thing is that a small company like Datek is very well positioned to offer elements in such solutions. Datek develops technology, but would like to have customers with great confidence in the retail market as our partners.