TeliaSonera & IoT: Already ahead but only just beginning

By Julia Yao

The number of connected things in the Nordic countries has already surpassed the region’s total population. And according to regional incumbent TeliaSonera, connected things per person will rise to 2.6 by 2017. TeliaSonera has been actively pushing IoT applications in numerous verticals in the region and delivered remarkable business gains and social benefits. But according to Sverker Hannervall, Senior Advisor to CEO and GEM (former Group CTO ), “Although we often get overwhelmed by the changes IoT has brought us, we are just at the beginning.”

A promising market: 2.6 connected things per person

The Nordic countries are hotspots for M2M growth. The number of connected things has already surpassed the region’s total population. TeliaSonera and Arthur D. Little estimate that by 2017 there will be 2.6 connected things per person. By 2017, an estimated 23 million things will be connected in Sweden alone. In the same vein, Huawei predicts that towards 2025, there will be 100 billion connections, among which 55% will be business-facing categories, triggering endless possibilities for vertical businesses.

In the Nordics alone, TeliaSonera projects market growth of around 23% annually until 2018, reaching EUR9.1 billion. While the operator sees growth at its core businesses stalling and flat group sales this year, its M2M business has grown by 20-to-30% annually in the past five years – clearly a new growth engine.

Open up for IoT opportunities

TeliaSonera is an advocate and a pioneer in M2M businesses. The telco was ranked the best regional M2M operator in the world in a 2013 M2M Operator Scorecard conducted by analyst firm Analysys Mason. According to Hannervall, “Our main contribution in M2M is providing connectivity. But another thing is to inspire companies and industries to explore this M2M capability. We have built up vendor programs, partner programs, collaboration programs, and work with international communities in Europe between M2M players so we can discuss the regulation, how we cooperate in different markets. There are many dimensions for how we can inspire companies and industries to use M2M more.” Currently, TeliaSonera’s M2M Partner Program involves the entire value chain of suppliers and actors in a partnership to offer end-to-end solutions to customers. From radio modules to business processes, 57 partners are participating (including Huawei) in the TeliaSonera M2M partnership program today. The verticals are very diverse, encompassing everything waste management to wild-boar fodder timers, from connected cars (Tesla) to the power grid.

Among the many verticals TeliaSonera is engaged in, healthcare, especially connected medical devices, is an area where they see a lot of potential for M2M and where there are clear benefits to both providers and patients in terms of more cost-effective and better quality services. Hannervall quoted one healthcare example where medical professionals can access data regardless of where they are, and elderly people can receive remote checkup and treatment at home using connected medical devices. Going beyond mere connectivity, TeliaSonera acts as a solution integrator.

During the process, Hannervall sees a major shift in the telco’s position in a broader value chain. “Previously operators have one subscription, one customer; now we have many stakeholders around one device.” For this medical case, TeliaSonera’s customers are the municipalities, whose responsibility it is to take care of the elderly before they go to the hospital. But at the same time, the operator also has partners who provide the cameras, alarm systems and connected devices on the patient’s wrist. Connecting medical devices also means new business models are being explored. For example, pay-per-use schemes where healthcare providers only pay when they use the device. In addition, there is potential for more flexibility in payment entities. The one device can have many beneficiaries. One sensor on a patient can send information to the user, the doctor, the insurance company, as well as family members – each entity can opt to pay for this service. The service is now being provisioned in Sweden, but will be introduced into other countries in the region where aging population care can be a major cost and burden for government.

Connectivity is the foundation

To fully tap the huge opportunities of a Better Connected World, operators must be more agile, flexible, and quick. TeliaSonera is actively building up its IT and strengthening its CT capabilities. Like its peers, TeliaSonera sees NFV/SDN as key to network agility. “Traditional telco vendors have been a bit old-fashioned while software development companies are moving in very fast. For us, it’s not a question of whether we will go virtualized or not, it’s how fast we change. We are already running tests and trials with different virtualized network elements. We will just embrace this, and use it as much as we can. It opens up enormous flexibility for us.” He elaborated on their Telco Cloud project, “It’s about standardizing around our environment in which we will run and virtualizing different functions in our network. This will allow us to introduce functions faster with vendors and partners, and even resell functionalities.”

However, Hannervall reminded us that connectivity is the foundation that makes all this possible. Looking to the future, 5G will greatly be used in limitless verticals for IoT. As the world’s first commercial LTE adopter, TeliaSonera is now actively researching 5G. In a 5G whitepaper published this past January, the telco defines use cases and scenarios based on a number of trends, and looks at how they might impact the mobile network, such as rapidly-increasing video traffic, the need to always be online, and M2M communication. Going beyond the technical features of 5G, Hannervall said, “We need to understand how we will take 5G into different industry verticals. Also when we do this kind of big technology steps, there are things we can’t imagine. But when we give this capacity to people and companies, they will exploit it. We will see things we haven’t dreamt about. Then TeliaSonera’s task is to provide that connectivity and service with good quality. Sometimes, we get overwhelmed at the change Internet has brought, but we are only at the beginning.”