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IoT’s Race to Zero (cost) is on!

24 Feb 2017
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In technology, things move fast. But to be successful in IoT, you must move even faster.

Sigfox network operator UnaBiz today (24 Feb 2017) announced the commercial launch of Singapore’s first IoT-dedicated network. It is quite impressive that just 3 months after getting their operator license – and 7 months since they formed the company – UnaBiz launched with 95% population and land coverage, a robust partner ecosystem, AND solutions. It is fair to say UnaBiz has joined SK Telecom as the early leaders in the Low Power WAN (LPWAN) battle in Asia.

While their speed to market was impressive, the biggest shock was their pricing. It is widely known that European Sigfox operators will sell IoT network connectivity for as low as USD 1 per device per year. UnaBiz bettered that pricing by announcing price points as low as SGD 1 (USD 0.71) per device per year, with the highest tariff coming in at SGD 12 (USD 8.52) per device per year. I often talk about LPWANs being a “Race to Zero”, meaning in the near future LPWAN connectivity will be free, but even I was surprised to see just how fast this is coming to fruition.

So where will UnaBiz make its money? The IoT market opportunity equation is Connectivity + Hardware + Software + Services, meaning UnaBiz has built its business around the non-Connectivity components. We were given some insight into this with UnaBiz announcing the UnaBell (USD 10 per device), which is their version of an Amazon Dash. When you press the UnaBell, and “action” is initiated. These actions can range from calling a taxi, ordering a product/service, requesting a pickup or sending an emergency notification. UnaBiz has 1 million UnaBell devices in production, meaning they must be quite confident of the market opportunity (although, despite my pestering them, they would not give me further insight into any customers they have signed up).

UnaBiz has also developed a robust list of partners across the IoT ecosystem, including My Republic, Dimension Data, Advantech, Kyocera, Engie and Fujitsu. This partner ecosystem will be relied upon to engage with enterprise and government customers as well as design, develop, deploy and support the IoT solutions that run on the UnaBiz network. One potential insight into UnaBiz’s longer-term strategy is that Dimension Data is listed as their “strategic partner for GLOBAL solutions”, which I can only assume to mean that they have ambition outside their current markets of Singapore and Taiwan.

Ok, down to business, here’s what I liked about the UnaBiz launch – and what questions I have for them and the wider IoT industry as a result of today’s announcement.

The Positives

SGD 1 – 12 per device per year

For governments and enterprise customers, this is great news. Lower connectivity costs mean lower OpEx costs and a lower total cost of ownership for IoT initiatives. In short, the IoT business case has just improved so we can now connect more things for less.

The Ecosystem

Not all vendors understand that IoT customers buy IoT solutions, not IoT products or IoT technologies. And multiple products, technologies and vendors are required to create a single IoT solution. UnaBiz obviously understands this and has enlisted a broad group of partners across the IoT ecosystem to work together to create, sell, and deploy IoT solutions.

A Solution-focused network operator

Let’s face it, many operators will struggle to move beyond selling connectivity, which limits their potential to tap into the IoT market opportunity. Through its pricing, UnaBiz basically has announced that while they will operate the network, but their future success will NOT be defined by connectivity revenues. Rather, their success will rely on their ability to branch out to the hardware, software and services components of the IoT market opportunity.

The Questions

Where’s the Money?

UnaBiz gave some insights into their plans around driving non-connectivity revenues, but I am curious to see how this evolves. The UnaBell sees them move into the hardware space, while their tracking solutions expand into software and services. This is an encouraging start, but they will need to continually expand their hardware, software and services offerings to ensure their future revenue streams.

What’s Next? Or Where’s Next?

A couple comments and slides left me with more questions than answers. It is hard to imagine 1 million UnaBell devices being for the Singapore market alone – so which market and/or customers are they for? This, combined with listing Dimension Data as a “global” or at least “regional” partner makes me believe UnaBiz has much wider ambitions. There are 32 countries with Sigfox network operators – will UnaBiz be able sell-to or sell-through Sigfox operators in those countries? In theory, it sounds like they can, but the practical application of that level of collaboration will be challenging.

What does this mean for the Mobile Operators?

What must the Asian mobile operators be thinking now? Earlier this week, Sigfox announced a global partnership with Telefonica to deliver low cost, low bandwidth IoT solutions globally (more likely Europe and Latin America). Most mobile operators plan to deploy NB-IoT, an alternative low cost, low bandwidth network technology, and the vast majority (excluding SK Telekom, KPN, SoftBank, etc) are very much against alternatives like LoRa and Sigfox. Does this mean they will change their strategy and approach?

On top of that announcement, UnaBiz now comes out with an IoT connectivity price point that should seriously scare them. The prospective price points for NB-IoT start at around USD 2 per device per month (USD 24 per year), making it 3 times as expensive as UnaBiz. Does the cost of deploying NB-IoT stack up if they have to lower their connectivity price points to those announced by UnaBiz? Sure, there are reasons why certain solutions are likely to select NB-IoT, but for many, if not the majority, of low power IoT solution use cases, Sigfox can become a viable option at a much lower price.

Whether UnaBiz can turn this “buzz” into a success, only time will tell. What is for sure is they have accomplished a lot in a short period of time and have a solid ecosystem to take to market. Now it is time to see if the government and enterprise customers are ready to take advantage of it.