A Berg Insight estimates global IoT connectivity revenues at €12.4 billion in 2023, up 16% from 2022. The analyst attributes the growth to a shift towards greater focus on reliability, security and support for international deployments, contributing to new market dynamics for cellular IoT connectivity providers.
Berg Insight projects that by 2028 there will be 6.0 billion IoT devices connected to cellular networks worldwide, generating annual connectivity revenues of €21.0 billion.
Market leaders
The top ten mobile operators reported a combined active base of 2.9 billion cellular IoT connections at the end of 2023, accounting for 88% of the total 3.3 billion connections.
China Mobile is the world’s largest provider of cellular IoT connectivity services with 1.32 billion cellular IoT connections. China Telecom and China Unicom ranked second and third with 527 million and 494 million connections respectively.
Vodafone ranked first among the Western operators and fourth overall with 184 million connections, followed by AT&T with 128 million in fifth place. Deutsche Telekom and Verizon had in the range of 50–57 million cellular IoT connections each.
Telefónica, KDDI and Orange were the last players in the top ten with about 41 million, 40 million and 37 million connections respectively. The growth in the installed bases of the largest mobile operators varied, with changes ranging from a 1% decrease to a 31% increase year-on-year.
IoT-managed service providers play a key role in the ecosystem. Most players operate as full MVNOs, typically offering IoT connectivity services based on a mix of roaming and local access agreements and sometimes also value-added services targeted at vertical segments. Notable examples include 1GLOBAL, 1NCE, Aeris, BICS, Cubic Telecom, emnify, Eseye, floLIVE, KORE, Soracom, Tata Communications, Telit Cinterion, Velos IoT and Wireless Logic. Altogether, IoT managed service providers had more than 200 million cellular IoT connections under management at the end of 2023 and around €1.7 billion in annual revenues.
Drivers of IoT growth
International connectivity constitutes one of the largest and fastest-growing segments of the cellular IoT market. Mobile operators with regional and multi-regional operations are naturally positioned to offer IoT connectivity services for international deployments at competitive rates, leveraging their network footprints and ability to negotiate favourable roaming agreements.
However, the priorities of many mobile operators and their IoT businesses grow to become increasingly misaligned, as the telecom industry trends towards increased consolidation of operations to key markets and integration of fixed and mobile network operations.
This has led to a greater separation between mobile operators’ IoT businesses and network operations, resulting in more open approaches to global network access in line with the strategies of IoT-managed service providers. However, established IoT managed service providers typically have more advanced localisation capabilities through IMSI and eSIM profile donor agreements.
Going forward, Berg Insight believes that the separation of IoT connectivity businesses and networks will continue, driven by changing industry dynamics and a shift to new eSIM technologies. This implies a strong case for global consolidation of cellular IoT connectivity platforms.
