Close
Close

Published

Telstra at 3.2mn IoT devices, napkin-math isn’t pretty

Telstra’s IoT head, Gerhard Loots, has said that the Australian MNO has more than 3.2mn devices connected to its IoT network, and that it is connecting 2,000 new devices each day. By this time next year, it says it will have more than 4mn devices nationwide, but if you play around with the numbers, this isn’t exactly promising from an IoT perspective.

Remember, this is the market of billions of devices annually, with some forecasts pointing to a trillion connections in 2035-2050. Yet, one of the largest telco firms in APAC (one of the few globally to have both LTE Cat-M and LTE Cat-NB, and the largest operator in Australia) can’t manage more than 720,000 IoT additions annually, in a developed market with some pretty juicy industrial markets to target.

If you work on the basis that Telstra has around 50% of this IoT market, this would mean that the total Australian market is around 6mn units in 2019. That’s not at all encouraging, as it is less than one device for every person – and actually more like 4 people per device, or a quarter of a device per person.

Now of course, back-of-the-napkin calculations shouldn’t be the basis for global forecasts, but just a bit of doodling really illustrates the problem. This is an executive who seems quite pleased with these numbers, and yet, at this ratio, there would only be a total of 2bn cellular IoT devices by 2025 – well behind most forecasts, and heavily contingent on advanced markets building out at great speed.

This isn’t to deny Telstra’s relative success, but rather to add some context to a number spat out in a corporate blog post. “There’s a huge opportunity for IoT to transform the way that businesses operate in Australia. More than half of all Australian organizations surveyed are confident that an IoT strategy would generate significant revenue increases for their business, while over 70% agree that IoT can increase their employees’ productivity and lead to more positive experiences in the workplace,” said Loots.

Revenues for the IoT business at Telstra are apparently growing 20% annually, which is possibly concerning, given that on the basis of the above numbers, Telstra’s connections should have grown by around 29% in 2019, and around 40% the year before. Going forward, the quoted numbers indicated a 22.5% growth in connections in 2020, before shrinking to 18.4% in 2021, then 15.5% in 2022. This is indicative of the pricing pressures that will play out in the market – that the per-unit price has to fall as rivals strengthen. Should growth surge, then perhaps it’s a different story, but even doubling the rate of new additions doesn’t get up to a 1:1 devices-to-people ratio.

A key customer highlighted was SCT Logistics, an Australian transportation business that is using Telstra’s network to track its rail and road freight operations. Loots said that “not only is SCT Logistics stemming the $4 million cost of losses each year, but it also hopes to get better usage and utilization rates out of its assets instead of letting them sit idle in customers’ warehouses and shipping yards. After this successful trial, SCT Logistics is now rolling out Track and Monitor across its 1,500 non-powered assets like trailers and rail wagons, and integrating that data with its own systems.” While high value, you will note that this is quite a low volume of devices.

As for the types of devices being connected, Loots wrote “connected vehicles are an exciting IoT use case in our portfolio right now, but we’re also seeing a huge range of high-tech devices like solar panels, humidity sensors, traffic cones, buses, whitegoods and even garbage trucks being connected to our network.” New modules that combine LTE Cat-M and Bluetooth, GPS, or WiFi are in development, to this end.

Close