Summary Bullets:

• China already dominates the world in numbers of cellular IoT connections; Chinese operators are set to plumb the LPWAN opportunity as well.
• Recent announcements highlight the importance of U.S. and European IoT alliances to Chinese operators, with opportunities on both sides of the globe.

Over the last several weeks (which included the MWC Shanghai trade show), there have been a sizeable number of announcements relating to IoT initiatives and alliances by the three main telecom operators in China: China Mobile, China Telecom, and China Unicom. The announcements were focused on LPWAN rollouts, alliances with other operators for reciprocal footprint expansion, and technology enhancements/vendor alliances for connectivity and subscription management. China is already a powerhouse in IoT, at least in terms of the number of connections already in use. For example, China Mobile has about 120 million connections, while China Unicom had about 20 million a year ago (and China Telecom hasn’t disclosed numbers). In comparison, Vodafone has about 50 million, while AT&T and Verizon have about 65 million connections jointly. All three Chinese operators are also actively deploying LPWAN networks, focusing on the standardized 3GPP technology, NB-IoT.

Clearly, the three Chinese operators have plans to go beyond their current installed bases by aligning themselves with operators whose enterprise IoT customers have operations or customers in China or vice versa. This is in the interest of the U.S. and European operators as well. What is less clear is whether the Chinese operators are also providing services beyond connectivity such as advisory and professional services, end-to-end vertical applications and APIs for app enablement, custom solutions, security services, data visualization, and analytics. There may be some swapping of best practices to go along with footprint expansion or even more ‘monetizable’ opportunities for U.S. and European operators to leverage existing solutions. These value-added services are important capabilities appreciated by enterprises that need help in defining, testing, deploying, managing, and getting value out of IoT. The following public announcements illustrate the Chinese operators’ key initiatives:

• China Telecom and Ericsson have launched the China Telecom IoT Open Platform; the operator will be using Ericsson’s DCP connectivity management platform (already in use by China Mobile).
• China Mobile is allying with Cubic Telecom (an MVNO for automotive solutions) and Valid (an eSIM solution provider) to deliver LTE connectivity enablement and subscription management via eSIMs to global IoT customers in China.
• China Telecom and Orange Business Services are extending their strategic partnership into the IoT space through a combined footprint across Asia, Europe, and Africa. They will both be able to use the same Ericsson DCP platform for connectivity management.
• China Telecom announced an expanded partnership with Hong Kong Telecom to cover the combined geographical footprints of mainland China and Hong Kong. The multi-domestic service is supported by the Ericsson Device Connection Platform (DCP).
• China Telecom announced a similar strategic partnership with Norway-based Telenor Group. China Telecom’s MNC enterprise customers will gain access to Telenor Connexion’s IoT networks in Europe and Asia and will serve as Telenor Connexion’s preferred partner for connectivity in China.
• AT&T forged partnerships with both China Mobile and the Bridge Alliance to extend its business customers’ IoT footprint to China and to allow its 22 automotive OEM customers to extend their reach to Asia and Africa. China Mobile and AT&T are also developing a platform to seamlessly move a business customer’s AT&T IoT subscription over to China Mobile’s local service.

So, who is winning here? Clearly, Ericsson is leading the pack when it comes to connectivity management to support these alliances. And as long as the rules are clear, European and U.S. operators should be able to parcel out a fair distribution of revenues from the customers in their respective regions with operations in the Chinese operators’ footprint and vice versa. In addition, the operators may be able to license or gain incremental revenues from sharing their applications, capabilities, and platforms for app development, security, and analytics.

What is really important is whether the businesses in all the regions involved are better able to deploy, manage, and monetize IoT projects. This depends on whether their access to other countries and the related access and roaming pricing is affordable, whether common platforms are used for subscription and connectivity management, and whether best practices and value-added services are added to the mix across regions to make their IoT ride as smooth as possible.