Tracking trends
Rushika Bhatia
Industry Watch

Tracking trends

Paul Black, Director of Telecoms and IoT, IDC Middle East, Turkey, and Africa, takes a hardened look at the data and shares a compilation of his top trends…

Looking ahead, innovations will take centre stage in the IoT space, particularly as the Middle East market begins to rebound. Telecom operators will experiment with new technologies (such as blockchain) to improve security, privacy, and authentication mechanisms. In places such as Africa, major operators will seek to drive innovations in localised IoT solutions by tapping into the growing developer communities. In fact, larger service providers are expected to acquire smaller, niche IoT companies to increase their vertical expertise in the IoT ecosystem and improve their existing IoT offerings. Operators will also focus on enhancing IoT platforms to shorten the time to market of new solutions and offer a quicker route to market for specialised niche vertical players. IoT platforms may also be released to third parties and developer communities to increase the pace of innovation and accelerate the development of IoT solutions. This move will strongly position telecom operators in the IoT ecosystem over the long term. However, 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.


Industrial Internet of Things (IIoT) will start revolutionising manufacturing in Turkey

Several innovative companies in Turkey will soon start implementing IIoT by leveraging the intelligent connected devices in their factories. In fact, most multinational manufacturers in Turkey are looking to import smart manufacturing use cases that were previously tested in sites outside the country. In line with this goal, a few multinational manufacturers recently initiated pilot projects that include IIoT and other smart manufacturing enabler technologies (such as predictive maintenance, analytics, robotics, and cloud technologies). These pilot projects are expected to provide multinational organisations with greater efficiency, scalability, and cost savings in 2017. In the past, Turkish geothermal power plants — in partnership with GE — have also used IIoT to eliminate human error, reduce water wastage, and lower carbon dioxide emissions (and thereby improve their operations). This tactic has enabled these plants to save over US$0.5 million annually. IDC expects similar use cases to be adopted in the future. With the wider adoption of IIoT, manufacturers in Turkey will break open data silos and connect all of their people, data, and processes from the factory floor to the corporate IT environment in order to enable faster decision making at the executive level. In 2017 and 2018, manufacturers will also focus on the integration of production-line components with internal IT systems. Combined with analytics, manufacturers will be able to optimise operations, diagnose problems and track inventory flows more effectively. Since IIoT will enable the faster and more efficient acquisition of greater amounts of data in the long run, business leaders will be able to get a fuller and more accurate view of their enterprises, which will allow them to make better decisions.

Operators in Turkey will unlock the value of IoT in 2017 by implementing IoT platforms

In 2016, IoT started to become an enabler of digital transformation across all verticals in Turkey, particularly across the manufacturing, transportation, and government verticals. For example, manufacturing giants reviewed their internal and external processes to optimise their supply chain operations through the use of IoT. Fleet management services and other IoT systems that monitor both vehicle conditions and driver behaviour also presented significant opportunities. However, despite these promising developments in the Turkish market, the local IoT landscape remained fragmented in 2016, with the disparate solutions, devices, and platforms offered by a range of vendors preventing the full value of IoT from being unlocked.

Nevertheless, in 2017 and beyond, operators in Turkey will heavily invest in IoT platforms that enable centralised device monitoring, application development, and data management. These investments will allow them to build application services for various verticals such as banking, healthcare, and utilities on top of existing IoT systems and decrease the time to market for such services. In the past, telecom operators also developed Smart City IoT platforms to provide various solutions such as smart home solutions, security systems, intelligent parking solutions, smart lighting solutions, and smart metering solutions.

Even though IoT exists in a complex ecosystem and an end-to-end IoT application involves several technologies and entities, adopting a platform approach will transform operators into collaborative partners for different types of organisations (such as vendors, platform providers, system integrators, app developers, and industry alliances, as well as niche technology companies and start-ups). This adoption trend will shape operator strategies in coming years and change the competitive dynamics in the whole Turkish IoT ecosystem.

Heightened interest in cellular-based IoT networks expected in 2017

The Middle East region is home to a number of progressive telecom operators who have launched advanced communication networks as well as a number of ICT services. Some of these operators have made a mark for themselves by launching IoT-specific networks based on LoRa and Sigfox standards to capitalise on growing industrial and consumer IoT demand. LPWA technologies such as LoRa and Sigfox have seen some early adoption in the region due to their greater ease of deployment and fewer regulatory requirements. However, this adoption trend is expected to change as the IoT landscape becomes crowded and more complex, with diverse technology vendors, device manufacturers, and application vendors each vying for a share of the market. With the availability Third Generation Partnership Project (3GPP)-approved overlay technologies such as NB-IoT, IDC believes that the interest of telecom operators will shift to cellular IoT networks to align their future network investments in technologies such as 5G.

With the explosion of IoT connections, the relevance of IoT platforms will be realised sooner rather than later

Despite the fact that telecom operators in the Middle East clearly understand the business potential that IoT has to offer in a larger context of smart cities, smart industries, and home automation, most providers are yet to deploy full IoT platform suites. While deployments may have been put off due to regulatory challenges or the current economic uncertainties, rollouts will eventually take place soon to handle the rapidly growing number of IoT connections. The success of such IoT platform deployments will be measured in terms of the level of security and flexibility offered using cloud-based delivery models and the ability to assure data sovereignty.

Different industry alliances have different models for IoT device management — for example, SigFox uses a centralised model while LoRa favours a federated model. A number of vendor IoT platform offerings also include centralised device management modules as part of the overall package. Flexible, transparent, efficient, and secure management of devices will be key in the success of any operator IoT solution.

The awareness of blockchain in the context of IoT to grow significantly in 2017

A number of centrally managed IoT solutions that have been launched required heavy investments in cellular and dedicated IoT networks such as LPWAN. However, as IoT is recognised for its potential to automate city administration, industrial, and even smart home solutions, operators are in need of technologies that reduce their reliance on the traditional broker-based networking paradigm. In this model, IoT networks rely on a central cloud server to identify and authenticate individual devices. Operators, however, want to shift to mesh networks in which devices can authenticate each other without the need for central brokers or certification authorities. Consequently, blockchain is emerging as a plausible solution that enables the creation of secure mesh networks while avoiding threats such as device spoofing and impersonation. While most early pilots and experiments have largely been in the financial sector, similar use cases are expected to be replicated in the telecoms sector going forward. The UAE government is also backing blockchain research and has pledged to ensure all public sector documents are on a shared and open blockchain platform by 2020. Regional operators will thus closely follow the developments in this technology space and evaluate ways of leveraging them going forward. In Africa, LPWN IoT Network Implementations to slowly start pushing IoT into the limelight and lowering interest in traditional M2M applications

Most IoT applications have hitherto been based on cellular networks and have mostly remained the domain of traditional mobile operators. In 2017, however, a number of smaller non-mobile operators will start to deploy LPWAN IoT networks in order to provide low cost IoT applications. South Africa will lead this trend, as a few providers in the country are already testing LPWAN IoT networks. While Sigfox has announced plans to deploy its IoT network in South Africa, IDC expects most of the future implementations to be based on the LoRa standard, especially given the fewer stringent and exclusivity conditions associated with the LoRa Alliance standard compared to Sigfox.

The growing developer community and smaller niche solution providers to start bringing localised, specialised solutions to market

The developer community will begin to take a greater interest in developing localised IoT solutions, finding simple IoT routes to market, and driving IoT adoption. In South Africa, for example, parking management and mobile point of sale (mPoS) solutions have been developed and are mainly being driven by small solution providers. Within the country, an M2M solution has also been developed that allows utilities and large organisations to manage their water resources more effectively by detecting leaks and anticipating demand (this solution was developed by WRP Engineers, a specialised company).

In Kenya, start-up organisations are using the success of mobile money platforms as well as IoT to solve fundamental problems. For example, M-Kopa, a start-up company, provides a solar powered lighting system to rural households that combines Big Data analytics, IoT, and mobile money capabilities. The company has so far connected over 400,000 homes in East Africa and launched a smart television device.