New MNOs and industrial IoT soften the consolidation blow for vendors

There is more disruptive potential in ComReg’s decision to set aside a 3.5 GHz licence, in its recent 5G-oriented auction, for a new entrant. This was won by Dense Air, a subsidiary of vendor Airspan, whose model is to build neutral host, small cell networks, geared to locations or industries where it is hard to for multiple MNOs to justify the cost of build-out (for instance, railways, roads or large indoor/outdoor industrial complexes).

Dense Air is a good example of a vendor extending its business model, as Nokia is doing with WING (see below), in a way that should drive adoption of its equipment and services, but also add new revenue streams.

The significance lies in the decision to support expansion of mobile deployment into industries and environments whose mobile requirements have been inadequately met by the conventional MNO model. Operators find it hard to justify the cost of deployment in enterprise, indoor or transport scenarios where dense capacity is required, but this may not result in significantly higher ARPUs. The economics get far worse if each operator has to build its own network.

So neutral host models, and cloud-based network-as-a-service platforms, are essential to sweeten the case for MNOs, or failing that, to lower the barriers to entry for new entrants, specialized providers, or direct roll-out by enterprises such as railway operators or manufacturers.

That will help deliver the promise of 5G to a wider variety of industries, and so drive accelerated roll-out of industrial and small cell networks. That is crucial for vendors, which need something to offset the impact of consolidation and network sharing on their core equipment businesses. Being able to sell kit to new operators or direct to enterprises, and into new environments, will help soften the blow, and Nokia will, even more importantly, hope to build new platform and services revenues as it slowly becomes less reliant on equipment.

Some of these efforts are based on the idea of hosting networks on behalf of service providers, using its virtualized core in the cloud, and looking towards network slicing in future. Nokia launched WING (Worldwide IoT Network Grid) in February 2017 as a managed service, offering multi-technology global connectivity and management services, and after various pilots, its first production unit went live in the last quarter of that year. Now it is increasing the appeal to smaller operator or non-telcos by offering preconfigured packages of services, sensors and applications, targeted at specific sectors – initially agriculture and logistics.

WING customers can offload the set-up and operations of enterprise IoT networks and services to Nokia’s platform, which as well as connectivity, provides tailored sensors and applications, and support to develop business cases. WING provides them with a broad set of hosted services for managing IoT connectivity, devices and applications across national boundaries, based on Nokia frameworks. This is agnostic to the access technology – it federates connectivity from multiple networks, including unlicensed ones like LoRa, in order to support multinational clients. The services include provisioning, operations, security, billing and dedicated enterprise customer services. Other types of services which Nokia offers, or has spoken of developing, can then be layered on top of this – security, data management, analytics and so on.

Nokia is careful to portray WING as a service mainly for its core telco customer base, but of course, it has the potential to enable new service providers, or enterprises themselves, to roll out IoT platforms without the cost and risk of managing the whole system themselves. Now the Finnish vendor is trying to make it even easier for operators – new or old – to support IoT services in vertical markets, by offering off-the-shelf packages for particular industries, all built on the WING infrastructure.

The first four packages focus on use cases in agriculture and logistics, and are labelled:

  • Smart Agriculture as-a-Service. This includes sensors to capture environmental, soil and crop data, with analytics to help improve crop and yield management.
  • Livestock Management as-a-Service. This comes with tracking devices and biosensors to monitor animal health and welfare, to predict problems and improve yield.
  • Logistics as-a-Service This will use sensors to track the global movement and condition of goods throughout a supply chain, to optimize delivery and logistics efficiency.
  • Asset Management as-a-Service. This connects different products globally, allowing enterprises to monitor and analyze the status and performance of their goods from a single console.

Nokia said it is conducting trials of the first of these options with an unnamed African operator, and working with a “leading services and consulting firm” (i.e. not an MNO) on the asset management system. Further industry-specific packages will follow in due course.

“The IoT is a growing opportunity for operators to win new enterprise customers and significant additional revenue in a diverse range of vertical markets,” said Ankur Bhan, global head of WING Business at Nokia, in a statement. “With minimal upfront investment, an operator can now quickly get a service to market and generate IoT revenues. We expect these vertical solutions to encourage more operators to connect to Nokia WING, expanding its global footprint and broadening the range of capabilities and services that will become available.”

Like other frameworks, WING aims to reduce IoT fragmentation by providing a unified approach at the access, core and platform levels. The organizations which can control those unified systems will hold the real power in the diversified IoT, and Nokia knows it.

While another new Nokia service, IMPACT, enables enterprises and service providers to manage their own IoT networks and services, WING allows them to outsource that to Nokia itself. Billing it as a “worldwide IoT network grid”, it represents the firm’s most aggressive move to fulfil CEO Rajeev Suri’s promise to move into business ‘adjacencies’, to restart growth and offset tough pressures in its core network equipment business.

Deploying, connecting, managing and securing huge numbers of connected devices, and handling all the data they produce, will be far outside the comfort zone of most enterprises, governments and even operators – even more so than running a mobile network, and even in that market, managed services have been on the rise.

Managed services already account for about one-third of Nokia’s revenues, but are targeted mainly at the traditional telco base, and in that market, the firm has been overshadowed by the might of Ericsson. Nokia now hopes to deploy and manage networks and services for its key verticals too. In IoT managed services, the market is immature and there is everything to play for.

There is also, however, a long line of companies chasing the opportunity, including IT giants like HPE; the network vendors; some of the big operators; and vertically specific bighitters like GE and Bosch.

Like most IoT ‘platforms’ emerging from established giants, much of WING is a tying-together of existing capabilities, including the IMPACT software itself, and managed services offerings. Nokia is pushing the multinational angle in particular, arguing that cross-border IoT networks and operators just don’t exist yet. So it will work with a host of network partners round the world – wired and wireless operators plus specialist vertical networks and potentially unlicensed systems – to offer a global connectivity grid.

Of course, its own technology will enable the ‘command center’ at the heart of the grid, with customers being able to manage devices, billing and customer care on a global basis via IMPACT.

Nokia also offers a white label version of WING for operators, which can then add international support to services they provide in their own markets. The first telco to adopt this was Tele2’s IoT subsidiary, in a five-year deal to use WING to support enterprise customers in sectors including transport, healthcare, smart cities and utilities, to manage their global connectivity needs.

Nokia plans to drive AI services to enterprises with new hubs:

Nokia says it plans to open a network of ‘Cognitive Collaboration Hubs’, whose aim is to drive cooperation between vendors, operators and enterprises to develop artificial intelligence (AI)-based services.

It says it will host development of new AI-based analytics use cases on its own Ava cognitive services platform, to reduce time to market for operators and service providers, in a similar way to WING in IoT.

Nokia’s said the new data science hubs will build on the success of its year-old Cloud Collaboration Hubs, which it said have “attracted substantial interest from operators to help them build new cloud-based capabilities”. In both sets of hubs, agile development processes will be used to create use cases, test them, and launch them in a matter or weeks. Areas of focus include network operations, network performance, customer experience and data monetization.

Nokai said it was “currently working with several US operators on the use of machine learning to improve 5G network planning, for example to help identify the best site locations or Massive MIMO beamforming configurations”. It also cited a project with Turk Telecom, to test AI technologies on mobile and fixed networks, using Ava as well as Nokia’s Mika AI assistant.